Shein bosses will face a grilling from investors over the next few weeks as they seek to drum up support for a controversial £50billion stock market listing.
The Chinese fashion giant will hold a roadshow to convince shareholders to back its initial public offering (IPO) in London, planned for early next year.
But growing questions over its business practices mean that chairman Donald Tang and billionaire founder Chris Xu are likely to face a gruelling round of questions from institutional investors.
Influence: Georgia Toffolo in Shein. The Chinese fashion giant Shein will hold a roadshow to convince shareholders to back its IPO in London, planned for early next year
Regulators still need to give the listing the go-ahead after opposition was raised from both human rights groups and corporate organisations.
Russ Mould, investment director at broker AJ Bell, said: ‘One can only imagine the number of questions from prospective investors, given uncertainties around business practices, supply chains, corporate governance, alleged intellectual property infringement, costs, margins and tariffs.
‘All these need to be answered before Shein has a chance of getting its IPO away.
‘Under normal circumstances, Shein’s position as a fast-growing retailer expanding across multiple geographies and taking market share from established players would have made it a no-brainer for investors.
‘However, there is an element of “it’s too good to be true” with Shein that makes it a harder investment decision.’
Shein is thought to have first filed documents to launch an IPO a year ago, meaning the process is taking longer than usual, Mould added. MPs on the business select committee are also set to scrutinise bosses over forced labour concerns in January.
Shein has insisted it has a ‘zero-tolerance’ approach to forced labour and that it has increased checks on suppliers.
Even though the listing would be a major boon for London, top money managers have been wary over being caught up in the company’s controversies.
The UK Sustainable Investment and Finance Association, whose members include Aviva Investors, Schroders and M&G, has said London should not ‘become a listing place of last resort for companies with poor human rights records’.
The British Fashion Council has also warned that the planned flotation is a ‘significant concern’ to the industry.
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