Shein secures UK regulatory approval for London float

The UK’s financial regulator has been accused of a “race to the bottom” after news emerged last week that it had approved Shein’s application for a London IPO.

A top managers’ trade group, including Aviva Investors, Schroders and M&G, said the float could threaten the UK’s status as a premier listing destination.

UK Sustainable Investment and Finance Association chief executive James Alexander said investors have “raised concerns repeatedly about being exposed to Shein” following allegations of forced and child labour in its supply chain.

“A race to the bottom on governance and standards will not help us in the long term, as it risks undermining the status of the UK as a high quality financial centre,” he said.

The China-founded fast fashion company has been waiting for the Financial Conduct Authority’s (FCA) approval since it first confidentially filed papers last June.

It is now waiting for the green light from Chinese regulators to float in London.

Shein is thought to have been targeting an IPO worth £50bn, but is understood to have cut its valuation to around £23.8bn following increased pressures.

The regulator’s approval comes after MPs and Human rights organisations had expressed concerns about a lack of transparency from the retail giant following allegations of abuse in its supply chains.

Shein’s head of strategic and corporate affairs for North America and Europe Peter Pernot-Day said the business utilised “micro production”, which involved producing “small batches” of garments to remain profitable and efficient.

Pernot-Day insisted that this did not mean “cutting corners on labour practices, and it doesn’t mean cutting corners on material safety or product quality”.

“As a business that’s been around since 2012, as a business that’s been actively selling at scale into the UK, the US and the European Union since 2015, as a business that has hundreds of UK employees, millions of customers in the European Union, this business would not exist at this scale if we had low cost, cheap, dangerous items,” he said.

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