Shein confidentially files for London IPO

Shein, the fast fashion giant with links to China, has confidentially filed for a public listing in London as it faces backlash in the U.S., a person familiar with the matter told CNBC.

The person was granted anonymity in order to speak freely about the discussions, which are private.

The company had confidentially filed for a U.S. initial public offering in November but began looking toward London after it failed to win the support of American lawmakers.

Elected officials in the U.S. have repeatedly expressed concerns about the use of forced labor in Shein’s supply chain and its use of a U.S. tax law exemption known as de minimis. Under the provision, packages valued at less than $800 are not charged import duties and aren’t subject to the same levels of oversight from U.S. customs, which is tasked with screening packages to ensure items from banned regions don’t come into the country.

Shein would still prefer to go public in the U.S., people familiar with the matter previously told CNBC, and its filing in London doesn’t mean that an IPO will happen there. Shein had previously sought China’s approval to go public in the U.S. It’s unclear if Beijing has signed off on the London listing.

Shein declined to comment to CNBC.

Reuters first reported that Shein had confidentially filed in London.

Shein, which was founded in China, has gone to great lengths to establish itself as a “global” company, moving its headquarters to Singapore in 2021. Still, the vast majority of its supply chain is still based in China, and the fact that it needed to seek Beijing’s approval to go public in the U.S. means regulators there view it as a Chinese company — and could exert control over its operations and data.

Shein’s London filing marks another twist in the company’s so-far long road to a public markets debut. It crashed onto the U.S. fashion scene during the Covid-19 pandemic and won over consumers with its ability to quickly offer the latest styles at rock-bottom prices. It’s been a thorn in the side of U.S.-based competitors, which have ceded market share to the digital upstart and struggled to match its speed.

As Shein’s prominence in the U.S. grew, so did its ambitions to go public. It began waging a U.S. charm offensive as it sought to win the approval of lawmakers and the retail industry, but those efforts have not yet succeeded. Shein has applied for membership in the National Retail Federation, the industry’s largest trade association, multiple times and has repeatedly been rejected, CNBC reported.

It’s found itself caught in the crossfire of a tense geopolitical rivalry between the U.S. and Beijing. American lawmakers, concerned about the influence companies with Chinese links can have on the U.S. economy, ramped up their scrutiny of Shein after it filed to go public. Some elected officials at the federal and state level have called on the…