Online fast-fashion retailer Shein has secured approval from Britain’s Financial Conduct Authority (FCA) for its planned initial public offering in London, according to two sources with knowledge of the matter.
The FCA’s approval marks a significant step forward in the China-founded company’s pursuit of a London listing after it confidentially filed papers with the British regulator last June.
But it will also have to contend with market turmoil caused by U.S. President Donald Trump’s 145% tariffs on Chinese goods and tighter rules on duty-free shipments from China to the U.S.
Shein, which sells $10 dresses and $12 jeans in more than 150 countries and was valued at $66 billion in its last fundraising round in 2023, will also need to secure approvals from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), for the London float, sources have said.
The company in recent weeks informed the CSRC of the FCA’s approval but has yet to receive a green light from the regulator, said one of the sources. They declined to be named as the information remains private.
Shein and the FCA declined to comment, while the CSRC did not respond to a request for comment.
Shein, whose clothes are produced at thousands of factories mostly in China, last year sought Beijing’s approval to go public in London, despite the company having moved its headquarters from Nanjing, China, to Singapore in 2022.
Shein’s filing with the CSRC makes it subject to Beijing’s new listing rules for Chinese firms going public offshore, sources have said.
Shein does not own or operate any manufacturing facilities, and instead sources its products from around 5,800 third-party contract manufacturers mainly in China, subjecting it to the CSRC’s listing rules, a separate source said previously.
The rules are applied on “a substance over form” basis, giving the CSRC discretion on when and how to implement them, the source added.
Shein ships the majority of its products directly to shoppers by air in individually addressed packages.
Under the CSRC’s rules, a host of authorities such as the National Development and Reform Commission, which supervises foreign holdings in local firms, the cybersecurity regulator and others may get involved in approving offshore IPO applications.
‘DE MINIMIS’ ISSUES
Shein, founded by China-born entrepreneur Sky Xu, initially aimed to go public in London in the first half of this year, contingent on securing approvals from regulators in both the UK and China, Reuters reported in January.
But its prospects have come under a cloud in recent months as the Trump administration moved to end the “de minimis” duty exemption, which allows shipments worth less than $800 duty-free entry to the U.S. and has helped Shein keep prices low.
Trump last week signed an executive order ending de minimis for shipments from China and Hong Kong effective on May 2.
The measure’s removal could force it to hike prices in the U.S., its biggest market, though the change has been widely expected and Shein has sought to adapt by adding suppliers in Brazil and Turkey.
The development, along with market turmoil caused by Trump’s tariffs on China, could also delay the fast-fashion group’s original IPO schedule to the second half of the year, said the sources.
In February, Reuters reported that Shein was set to cut its valuation in a potential listing to around $50 billion, nearly a quarter less than the $66 billion valuation it achieved in a $2 billion private fundraising in 2023.