Trump tariffs take the shine of buying Shein Shares in the IPO

Shein is considering an Initial Public Offering (IPO) on the London Stock Exchange. If it goes ahead, it could be the UK’s largest IPO ever. Looking for more information on the Shein IPO? Here’s everything you need to know.

Can you invest in Shein?

Not yet, but you may soon be able to buy shares if Shein lists on the London Stock Exchange.

Shein is a Chinese online fast fashion company. Known for selling trendy clothes at rock-bottom prices, it has become the world’s largest fast fashion retailer.

Across the world, Shein has around 90 million active shoppers today, many of whom are in the US. In 2023, the company generated an estimated $32 billion in revenue, about 40% higher than its revenue in 2022.

Last year, PitchBook valued Shein at $66 billion. That equates to roughly £53 billion at today’s GBP/USD exchange rate.

So, we’re talking about a big company here. If it was to proceed with an IPO on the London Stock Exchange, it would be bigger than nearly 90% of FTSE 100 companies.

How to access the Shein IPO

• Reports are swirling that fast fashion giant Shein will go for a much lower valuation in a potential London listing.
• It is now thought to be targeting a $50 billion, almost a quarter less than that indicated by fundraising rounds in 2023.

Because the IPO is not yet confirmed, investors can’t apply to buy Shein shares yet. However, there are steps you can take to prepare to participate in the IPO.

One smart move is to register for IPO alerts with a few major brokers such as Hargreaves Lansdown, AJ Bell, and Interactive Investor . Another good idea is to open a brokerage account so that you can potentially buy shares in the IPO if it goes ahead.

Will Shein shares be worth buying in the IPO?

This is the million-dollar question.

The IPOs of large, well-known companies tend to generate a lot of excitement. As a result, the share prices of these companies often soar after they go public. Arm Holdings is a good example here. After it listed on the Nasdaq in 2023, its share price shot up 25% in a day.

There’s no guarantee that Shein shares will pop like this, however. In the past, the retailer has often been criticised for its environmental impact and potential use of unethical labour practices. These issues could limit demand for the stock, with those who focus on ESG issues sitting on the sidelines. It’s worth noting that there are reports that institutional investors are wary of the potential IPO due to these ethical issues.

One other issue to be aware of with Shein is that it operates in a very competitive industry. Its rivals include the likes of H&M, Zara, Boohoo, and Asos. A lot of these companies have been poor long-term investments. Boohoo shares, for example, have lost around 80% of their value over the last five years.

Of course, there is a chance that Shein shares could soar in an IPO. After all, this is a fast-growing company that has state-of-the-art technology. However, gains are not guaranteed. So, investors should do their research before making any decisions, and not blindly jump into the IPO.

Susannah Streeter, head of money and markets, Hargreaves Lansdown gave her views about the Shein IPO in light of Trump’s latest round of tarrifs

Shein’s planned London listing was already mired in controversy and now it’s hit by fresh tariff turmoil, becoming ensnared in clampdowns on e-commerce giants. Trump’s tariff order to reverse shipping loopholes has shone the spotlight on other countries exemptions for small, imported packages. It seems it has prompted the European Commision to act as its now urging EU lawmakers to phase out exemption on customs duties for parcels under €150.

These exemptions have helped give the fast fashion giant more muscle. It is highly reliant on keeping prices low and this has been helped by the firm not having to pay import duties on millions of low-value packages. Now that the US administration has closed this loophole, known as “de minimis” in the United States, it looks like other countries will follow suit.