Shein is slashing the value of its London listing by billions after Donald Trump’s tax clampdown on parcels.
The Chinese online fast fashion giant had been hoping for a blockbuster £50billion flotation this year but is poised to cut its valuation to just over £40billion.
The US this week confirmed it would close a tax loophole that means retailers, including Shein, can dodge tariffs on parcels worth $800 (£645) or less.
Experts reckon this move will hit Shein’s profits and force it to increase prices in the US, its largest market.
This further casts a shadow over its controversial listing plans, which have been criticised by human rights campaigners and fashion industry chiefs.
The latest setback is a ‘big bump in the road’, according to Susannah Streeter, head of money and markets at broker Hargreaves Lansdown.
Star quality: Shein’s products have been advertised by celebrities including Georgia Toffolo
‘This is likely to knock potential investor sentiment and make it that bit harder to achieve a hoped-for blockbuster valuation,’ she added.
Chinese retailers, including Shein and Temu, have exploded in popularity over the last few years due to their ultra-cheap products.
The number of these imports into the US has increased from around 140million to more than a billion in the past decade, White House figures showed last year.
But the influx has made it harder to block illegal or unsafe shipments, officials say.
Shein has been trying to drum up support among investors for what could be one of the largest UK initial public offerings (IPO) on record.
The firm, whose products have been advertised by celebrities including Georgia Toffolo, was valued at £53billion in 2023.
But MPs have expressed concern with City regulators about a lack of transparency from the firm amid allegations of abuse in its supply chain.
There are fears its cut-price T-shirts and dresses are made by Uyghur Muslims in labour camps.
This has also put off potential investors. The UK Sustainable Investment and Finance Association, whose members include M&G and Schroders, said: ‘UK markets and investors should not be exposed to a company that faces serious allegations about human rights abuses in its supply chain.’
Peter Hugh Smith, boss of the UK’s largest charity fund manager, CCLA, did not find Shein’s response to abuse claims ‘remotely reassuring’.
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