Anti-Shein sentiment grows as IPO gets closer

By

Sandra Halliday

Published
June 10, 2024

With a mega-share listing for Shein via the London Stock Exchange  seen as very likely to go ahead, calls for its to be stopped are growing.

Workers rights campaigners have called for whichever UK party takes power after the general election on 4 July to stop the IPO. 

Alena Ivanova, campaigns lead at Labour Behind the Label talked of her “dismay” that senior British politicians have been courting Shein to win the £50 billion listing given the firm’s lack of transparency and other ethical issues.

It’s just month since Switzerland-based campaign group Public Eye claimed a number of abuses at Shein including ultra-long working weeks for garment-makers, forced labour, and a “cavalier approach to design appropriation”.

Meanwhile, Mathias Bolton, head of commerce at UNI Global Union, told The Guardian: “Shein shouldn’t be rewarded with the credibility of being listed in the City, or anywhere else, given the lack of transparency in their supply chain and shocking reports of severe labour violations.”

Even right-wing/populist political Nigel Farage has said the London listing is a bad idea.

He told the Telegraph that the listing “won’t change the IPO crisis” in the City. They see an IPO for Shein and say, ‘Oh, isn’t that marvellous because London needs it.’ No, it doesn’t. It doesn’t at all.

“Saying no to Shein is not cutting off our nose to spite our face. It’s saying we think this is a very bad idea.”

And Caroline Rush, BFC chief executive, also said that at a time when “global fashion leaders are rightly focused on making our sector more socially, environmentally and economically sustainable, the government’s courting of Shein to list on the London Stock Exchange, and Shein’s decision to do so, is of significant concern to UK fashion designers and retailers.

“While we appreciate that Shein has committed to meeting acceptable industry standards, questions remain about the ethicality and sustainability of a business model and supply chain that consistently undercuts British designers and retailers, and these still need to be answered.”

The Telegraph also quoted Peter Hugh Smith, chief executive of CCLA Investment Management, warning that London shouldn’t become a listing venue of “last resort” for firms with “dubious human rights records” and that a UK float for Shein was “worrying”.

Shein has always denied labour exploitation allegations and also highlighted its multi-million dollar investments in strengthening governance and compliance of its supply chain.

It has also said that regular audits show it to be improving on this front.

Regardless of those issues, assuming the float does go ahead, Shein won’t win a place in the elite FTSE 100 index, despite its expected high valuation.

There’s a minimum required percentage of shares in free float to qualify for inclusion and for companies incorporated outside of the UK that number is 25%. But The Times reported that the number of shares available will fall short of that. Had the company been eligible for the FTSE 100 it would have meant that tracker funds would be required to buy the shares, which could have boosted the share price.