Three members from the parliamentary committee chairs and senior politicians have called for more scrutiny of Shein, founded in China.
The city of London has geared up with excitement as the prospect of Shein, the Chinese fast fashion giant, potentially listing on the London Stock Exchange emerges hopes that the The UK may recover its position as one of the world’s financial hubs following a string of setbacks.
Fast-fashion retailer, Shein, is allegedly in talks to list on the London Stock Exchange after its attempt to do so in New York hit regulatory obstacles. The fast fashion brand’s idea to float in New York went off road due to the growing tensions between the US and China. With its attention now focused on London, Shein may put a stop to the LSE’s lack of IPOs and bring a stock valued at over $60 billion to the FTSE.
The company has risen from many downfalls to dominate the fast fashion market. They are known for their low rates and trendy women’s apparels.
Three members from the parliamentary committee chairs and senior politicians have called for more scrutiny of Shein, founded in China. The fast fashion retailer sets its sights on a London stock market listing. The UK Prime Minister, Rishi Sunak’s government has appeared keen to bring Shein to London In February, chancellor Jeremy Hunt and Donald Tang, the executive chair of the corporation, met.
Although most of the senior British politicians believe that the parliament is being dissolved for surprise general election, a Shein listing should not be allowed. The initial public offering (IPO) should be subjected to greater scrutiny. Alicia Kearns, the Conservative chair of the Commons foreign affairs committee, said: “With Shein’s prices so low the London Stock Exchange needs to ask itself, whose suffering is subsiding those prices?”
“A company which has failed to make full disclosures about its supply chains as required by UK law, and where there are grave concerns about its factory working conditions has no place in London.”
There have been many controversies around the quality of cotton used by Shein. It comes from the Xinjiang region of China, where the Chinese government is reportedly forcing the Muslim minority Uyghur population to work in labor camps. Alongside this, there was an accusation on Shein of not making full disclosures about its supply chains in 2021.
It would rank among the city’s largest corporate listings to boost its reputation as an international financial center if the London IPO were to come to reality. Globally the fashion brand has made $30 billion in revenue in 2023.
According to the documents filed with Companies House, as of last year Shein’s UK business earned £1.1 billion in sales and a pre-tax of £12.2 million in the past 16 months.
Shien has pledged to invest in improving standards at their supplier factories in late 2022.
A former senior manager of corporate responsibilities at Burberry, Kate Larsen said that there are many concerns relating to Shein’s practices. She was responsible for training inventors on ethical supply chains.
Shein sources garments from many small workshops in China, where labor standards and quality cannot be monitored across thousands of small supply chain partners. The business model is such that they do not ship big loads to containers. Hence, when a garment is ordered from Shein, it is shipped from China directly. This allows customs, import taxes, and inspections to be often bypassed.
A spokesperson from Shein stated that visibility across their supply chain is important to them and forced labor is not tolerated by the brand. They respect human rights and are committed to keep it intact. He also stated that they source cotton from regions with approved quality standards.
Millions of pounds have been invested by Shein in order to strengthen their governance and compliance across their supply chain. Consistent improvement in performance and compliance by their supplier partners has been shown in regular supplier audits. This includes improvements in ensuring fair compensation for workers.