Online fashion giant Shein approaches Sajid Javid ahead of blockbuster IPO

The former chancellor is among those being probed by Shein as it progresses plans for a more than £50 billion London stock market listing, Sky News has learned.

By means of Mark Kleinman, city editor @MarkKleinmanSky

Monday May 20, 2024 12:44 PM, UK

Sajid Javid, the former Chancellor of the Exchequer, has been approached for a role at Shein, the online fashion giant that is planning London’s biggest stock exchange in years.

Sky News has learned that Mr Javid is among a number of senior City figures who have held talks with Donald Tang, Shein’s executive chairman, in recent weeks.

City sources said that if Mr Javid’s appointment goes through, he could either join Shein’s board or become an adviser to the Chinese-founded company.

They added that Baroness Fairhead, the former chairman of the BBC Trust, was also on a list of candidates drawn up by headhunters who advised Shein.

One person close to the company said the identities of those approached reflected both the seriousness with which Shein took the corporate governance issue and the degree of focus on a London stock exchange listing.

Since leaving government, Javid has taken on a role at Centricus, an investment firm that unsuccessfully tried to structure a bid for Chelsea Football Club in 2022.

A spokesman for him, who had insisted that Mr Javid should stand for re-election in his seat of Bromsgrove for a week before publicly announcing the opposite, did not respond to a request for comment from Sky News.

In recent weeks, several reports have reiterated Sky News’ revelation that Shein has turned its attention to an initial public offering in London, amid difficulties in gaining approval from US regulators.

An IPO would likely value Shein at around £50 billion or more.

Paris is also being considered by the company as a possible listing location.

Earlier this year, Jeremy Hunt, the chancellor, held talks with Donald Tang, Shein’s executive chairman, to convince the company to commit to what would become one of the largest corporate flotations ever in London.

The meeting between Mr Hunt and Mr Tang underlined the importance that British officials attach to the idea of ​​outpacing the US in a bid to secure Shein’s IPO.

If this goes ahead, Shein could become the London Stock Exchange’s second-largest IPO in history, behind the 2011 stock market debut of Glencore International, the commodities trading and mining group.

Mr Tang has also met executives from the LSE and more junior ministers as part of the IPO preparations.

Shein filed documents for a New York stock exchange last year, but has become concerned that the application may be rejected by the U.S. Securities and Exchange Commission.

Goldman Sachs, JP Morgan and Morgan Stanley are advising on the deal.

Based in Singapore, Shein has become one of the world’s largest online fashion retailers, although its growth has not been unhindered by rising concerns over labor standards.

Last year, Sky News revealed that Shein was in talks to acquire British fashion brand Missguided from Mike Ashley’s Frasers Group.

Although the transaction itself was worth only a modest amount, retail analysts said it could pave the way for Shein to build a more meaningful profile in Britain, possibly through a wider partnership with Frasers.

Founded in 2012 in China, Shein was valued at more than $100 billion last year, which at the time was worth more than H&M and Zara’s parent company Inditex combined.

The company’s valuation was cut to $66 billion last year as part of a stock sale.

Shein operates in more than 150 countries.

It has also signed a deal with SPARC Group, a joint venture between Ted Baker owner ABG and Simon Property Group, a US shopping center operator.

Thanks to this deal, SPARC’s fashion brand Forever 21 received distribution on the Shein platform, which has 150 million users worldwide.

Shein acquired a one-third stake in SPARC Group, while SPARC Group also took an undisclosed minority stake in Shein.

The LSE’s attempts to take Shein to court come at a challenging time for the city as a stock exchange listing for major multinationals, with ARM Holdings, the British-based chip designer, choosing to float in New York rather than in London.

Other companies, such as gambling operator Flutter Entertainment and pharmaceutical company Indivior, plan to move their primary listings to the US, citing higher valuations and more liquid markets.

In recent weeks, however, London has secured the potential IPOs of Raspberry Pi, the personal computer maker, and AOTI, a medical technology supplier.

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Mr Hunt hosted a summit in Dorneywood last week attended by technology companies considering a stock market listing in Britain.

Shein declined to comment.

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