Fast fashion behemoth Shein is reportedly considering lowering the target valuation for its anticipated London IPO as it faces new trade barriers in the US and mounting political scrutiny in the º£½ÇÊÓƵ.
The Chinese-founded retailer, which is expected to go public in London later this year, could be impacted by harsh new trade policies from the White House that aim to eliminate a "de minimis" exemption for small packages entering the US, one of Shein's largest markets, as reported by .
This policy change is likely to increase costs and affect the firm's profit margins.
Company executives are now thought to be contemplating a reduction in the company's target valuation to approximately $50bn for the initial public offering, which is about $16bn less than its most recent valuation in a 2023 private funding round, as per Reuters, quoting sources familiar with the matter.
The removal of the de minimis tax break by Donald Trump has added to the pressure on Shein, following months of outrage from advocacy groups over its intention to list on the London Stock Exchange.
Shein has faced persistent accusations of utilising forced labour within its supply chain and procuring cotton from Xinjiang, where the Chinese government is alleged to have oppressed the Uyghur minority.
Legislators in Westminster have raised concerns about whether the City of London should welcome the listing of such a company given its controversial human rights record.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, commented on the recent developments surrounding Shein's planned London listing: "Shein’s planned London listing was already mired in controversy and now it’s hit by fresh tariff turmoil, becoming ensnared in clampdowns on e-commerce giants."
She further added, "This looks set to be a big bump in the road for Shein’s controversial planned listing on the London Stock Exchange. If Shein can’t compete so easily on price in major markets like the US and the EU, it’ll be a much harder sell, particularly given it also faces claims of environmental recklessness and poor working conditions in its supply chains."
Last year, Reuters reported that Shein had confidentially filed papers with Britain’s Financial Conduct Authority (FCA) in early June. However, the regulator has yet to approve the plans, taking longer than typically expected in its deliberations.
The FCA has not made any decision to approve the IPO yet, according to a separate source. Shein has been contacted for comment.
