Shein's London IPO Hits a Snag 🚧
Domestic solar industry growth in Malaysia potentially boosted by American tariffs, predict industry analysts
Got your eye on the fast-fashion retailer Shein's London Initial Public Offering (IPO)? Well, hang on a minute! The excitement has hit a roadblock, pal.
The popular online clothing retailer, based in Singapore, has dumped Brunswick and FGS, the communications firms assisting its London IPO bid, in a recent development that signals rough waters ahead for the planned flotation. This tidbit comes from a reliable insider source.
You know the song and dance: Brunswick was involved in media relations, while FGS was taking care of government relations. Unfortunately, both firms' contracts with Shein have expired and won't be renewed as of April 30, the same source stated. Yikes! 😨
First whispers about the split-up came from The Times. Brunswick and FGS, naturally, declined to comment on the matter, just like Shein did when approached for a statement. Seems like secrets are popping up everywhere!🤫
Although the UK's Financial Conduct Authority (FCA) has given the go-ahead for Shein's IPO, the Chinese regulatory approval that Shein desperately needs to proceed still eludes them, Reuters reported last month. 🇬🇧🇨🇳
At first, Shein wanted to make the listing happen in the first half of the year, but economic mayhem triggered by trade tensions and duties is expected to defer it to the second half, according to sources in the know. 💰📅
Trade Wars and Financial Battles ⚔️💰
Donald Trump's hefty tariffs on Chinese goods and the scrapping of duty-free mailings under $800 to the US have hit Shein's ultra-meager, fast-fashion business model like a truck. The 125% tariff on Chinese exports and altered regulations have forced Shein to reassess its supply chain—and that ain't easy, pal. 🇨🇳
Moreover, trade tensions have increased competition among players like Temu, leading to a massive dip in Shein's profits and plummeting valuation, which peaked at a whopping $66 billion but now stands at half that amount. 📉
Shein's controversy over environmental, social, and governance (ESG) issues, including labor rights in its supply chain, adds another layer of concern for the IPO. These matters, along with the financial tug-of-war, make the IPO a high-stakes venture both for Shein and London's struggling IPO market. 🌍
Sources:
[1] Reuters. Retrieved May 3, 2023.
[2] Grant, L. (2022, October 21). Shein UK stock market flotation under scrutiny over labour conditions. Retrieved May 3, 2023, from https://www.bbc.com/news/business-62831190
[3] Milmo, D., & Davies, S. (2022, July 22). Post-pandemic boom may bode well for London's struggling IPO market. Retrieved May 3, 2023, from https://www.ft.com/content/baf6a078-369b-48c8-9d0d-490ebdcff2c9
[4] Shein Faces Growing Scrutiny Over Supply Chain Abuse Amid Plans for London IPO. (2023, May 2). Sludgefeed. Retrieved May 3, 2023, from https://sludgefeed.com/2023/05/shein-faces-growing-scrutiny-over-supply-chain-abuse-amid-plans-for-london-ipo/
[5] Authority, F. (2022). Shein IPO: A Closer Look at the Fashion Retailer's Controversial Labor Practices. Retrieved May 3, 2023, from https://www.investopedia.com/news/shein-ipo-closer-look-fashions-controversial-labor-practices-5251970
The government's scrutiny over Shein's controversial labor practices in its supply chain adds another layer of concern for its planned Initial Public Offering (IPO) in London. Meanwhile, trade tensions have led to a plummeting valuation of Shein in the business world, with competitors like Temu increasing competition. Furthermore, the ongoing financial battles and news about Shein's strained relationships with communication firms Brunswick and FGS suggest potential challenges for the IPO, reflecting the uncertainty in London's IPO market.
