Online fast-fashion retailer Shein has secured approval from Britain’s Financial Conduct Authority (FCA) for its planned initial public offering in London, according to two sources with knowledge of the matter.
The FCA’s approval marks a significant step forward in the China-founded company’s pursuit of a London listing after it confidentially filed papers with the British regulator last June.
But it will also have to contend with market turmoil caused by U.S. President Donald Trump‘s 145% tariffs on Chinese goods and tighter rules on duty-free shipments from China to the U.S.
Shein, which sells $10 dresses and $12 jeans in more than 150 countries and was valued at $66 billion in its last fundraising round in 2023, will also need to secure approvals from Chinese regulators, notably the China Securities Regulatory Commission (CSRC), for the London float, sources have said.
The company in recent weeks informed the CSRC of the FCA’s approval but has yet to receive a green light from the regulator, said one of the sources. They declined to be named as the information remains private.
Shein and the FCA declined to comment, while the CSRC did not respond to a request for comment.
Shein, whose clothes are produced at thousands of factories mostly in China, last year sought Beijing’s approval to go public in London, despite the company having moved its headquarters from Nanjing, China, to Singapore in 2022.
Shein’s filing with the CSRC makes it subject to Beijing’s new listing rules for Chinese firms going public offshore, sources have said.
It does not own or operate any manufacturing facilities, and instead sources its products from around 5,800 third-party contract manufacturers mainly in China, subjecting it to the CSRC’s listing rules, a separate source said previously.
The rules are applied on “a substance over form” basis, giving the CSRC discretion on when and how to implement them, the source added.
Shein ships the majority of its products directly to shoppers by air in individually addressed packages.
Under the CSRC’s rules, a host of authorities such as the National Development and Reform Commission, which supervises foreign holdings in local firms, the cybersecurity regulator and others may get involved in approving offshore IPO applications.
‘De minimis’ issues
Shein, founded by China-born entrepreneur Sky Xu, initially aimed to go public in London in the first half of this year, contingent on securing approvals from regulators in both the UK and China, Reuters reported in January.
But its prospects have come under a cloud in recent months as the Trump administration moved to end the “de minimis” duty exemption, which allows shipments worth less than $800 duty-free entry to the U.S. and has helped Shein keep prices low.
Trump last week signed an executive order ending de minimis for shipments from China and Hong Kong effective on May 2.
The measure’s removal could force it to hike prices in the U.S., its biggest market, though the change has been widely expected and Shein has sought to adapt by adding suppliers in Brazil and Turkey.
The development, along with market turmoil caused by Trump’s tariffs on China, could also delay the fast-fashion group’s original IPO schedule to the second half of the year, said the sources.
In February, Reuters reported that Shein was set to cut its valuation in a potential listing to around $50 billion, nearly a quarter less than the $66 billion valuation it achieved in a $2 billion private fundraising in 2023.
Shein’s eventual IPO valuation will hinge on the impact of the de minimis termination on its business, sources have said. The amount to be raised in the IPO remains unclear.
Trump’s trade war with China has more broadly triggered fears of resurgent inflation and weaker consumer spending in the U.S., muddying the outlook for retailers including Shein and its Chinese discount goods rival Temu.
The stock market volatility of the past week also makes pricing an IPO very challenging, and has caused companies like Swedish fintech Klarna to pause their listing plans.
Shein last year shifted its focus to a London listing, ending an attempt at a U.S. IPO after pushback from U.S. lawmakers concerned about alleged labour practices in its supply chain in China.
Shein has said it has a zero tolerance policy for forced labour and child labour in its supply chain.
Hermès is continuing its momentum into 2025, despite a complex economic backdrop. In the first quarter, the French luxury house reported revenue of €4.1 billion, marking a 9% increase, or 7% at constant exchange rates, compared to the same period last year. Growth was seen across all regions. “We reached a record level, surpassing the very high sales of Q4 2024, which included holiday purchases,” said Chief Financial Officer Eric Halgouët during a conference call with analysts.
According to Hermes.com, leather goods sales rose 10% in Q1. – hermes.com
“Hermès is on track with its objectives in all regions. In this uncertain environment, the loyalty of our customers remains a fundamental strength,” Halgouët added. He announced that Hermès would raise its U.S. prices in May to fully offset the 10% import duties imposed by the U.S. government.
On April 15, Hermès surpassed LVMH to become France’s most valuable listed company. The brand will “fully offset” the duties by implementing a price increase across all product categories in the U.S. starting May 1, Halgouët confirmed. However, he did not specify the percentage of the increase.
“This will be an additional price adjustment we are finalizing, but it will allow us to neutralize the impact,” he said. Hermès had already raised prices globally by 6% to 7% earlier this year and typically only makes one pricing adjustment annually. In late March, Ferrari also announced plans to pass the added tariff costs onto its U.S. prices.
Sales in the Americas rose 13.3% to €695 million in Q1. “It’s double-digit growth across the United States, Canada, Mexico, and even Brazil,” said Halgouët. However, he noted that the start of the quarter was challenging due to extreme weather conditions.
The quarter began with wildfires in Los Angeles, which forced two Hermès stores to close temporarily, followed by unusual snowstorms in other states, including Florida. “We started the year with very low inventory levels in the United States,” he said. “But we ended the quarter with a strong March in every city.”
Stable sales in China
In Asia-Pacific (excluding Japan), Hermès posted a 2.7% increase in revenue to €1.97 billion, down from the 14% growth seen in Q1 2024. In Japan, sales surged 17.9% to €421 million, driven by strong local demand.
Halgouët reported that sales in Greater China remained virtually stable, which he described as solid considering the high base from Q1 2024. He observed “no major developments or trend shifts” in mainland China compared to prior quarters.
“Real estate and exports—China’s top two economic pillars—remain weak. However, in terms of consumption, which is the third pillar, the government has introduced several stimulus measures. These are positive, even if they don’t directly impact most of our customers,” he added.
Taiwan continues to post strong growth, supported by a value-driven strategy and a loyal clientele. In Macao, performance has been more volatile due to changing Chinese tourism patterns in the luxury sector. While competition is increasing in Shenzhen, which is drawing more Chinese shoppers, Hong Kong remains “an important financial hub.”
In Europe (excluding France), revenue rose 12.7% to €501 million, while sales in France climbed 14.2% to €357 million. Hermès continues to see steady performance in its historic core markets—France, Europe, and Japan. In Europe, strong results were fueled by both local customers and international tourists from the United States, the Middle East, and parts of Asia, particularly in Germany, Switzerland, and Spain.
High luxury, higher standards
Hermès’ robust results are partly attributed to its “ultra-luxury positioning, with products purchased by ultra-wealthy clients,” said Andréa Tueni, head of market activity at Saxo Bank France, in comments to AFP.
In March, HSBC analysts echoed this sentiment, noting Hermès’ “unique business model,” the rarity of its iconic handbags, the strength of its broader leather goods portfolio, and the resilience of its non-leather categories.
“Another strength of the Hermès model lies in its broad product range, from iconic high-end handbags to more accessible offerings such as silver jewelry and beauty products,” they said.
Sainsbury’s has released its results for the 52 weeks to the beginning of March and while most of the activity in its latest year was about food, it also has a large fashion and general merchandise business that appears to be mainly strong, despite its Argos unit trailing earlier in the year.
Tu Clothing
Total sales for the retailer, excluding fuel, rose 4.2% to £26.6 billion but Argos sales dropped 2.7%. The company said that it saw overall strong sales momentum in the final quarter with sales for the whole business up 4.1% and even Argos sales rising 1.9%, reflecting a continued improvement in the online traffic trend.
Statutory profit after tax rose 77% to £242 million.
Not that the company’s food operations are completely irrelevant to fashion and general merchandise as the more people it can get through its doors and onto its website, the more likely they are to look at its Tu clothing label and to order items from Argos.
And in the results it said that it’s “winning more big basket primary customers” and is in full expansion mode with the company having acquired 14 new supermarket sites in key target locations.
Looking specifically at the clothing and general merchandise operations, the company said that combined Sainsbury’s branded general merchandise and clothing sales were flat year on year for the full 12 months but after weakness in Q1 and Q3, they rose 6.5% during Q4. Clothing specifically rose 2.9% for the year including a 12.3% increase during Q4. Meanwhile Argos, as mentioned was down 2.7% for the full year but it saw that 1.9% increase in Q4 after each of the previous three quarters during the year had seen falls.
And while these businesses are relatively small in terms of overall sales and profits at Sainsbury’s we can’t ignore just how big the company is in the clothing and general merchandise categories. For instance, during the year it sold £1.862 billion worth of clothing and Sainsbury’s branded general merchandise, while Argos sold £4.916 billion worth of goods.
Sainsbury’s general merchandise and clothing also delivered higher profits on sales and margins gained from the mix benefit of stronger clothing sales and lower household electrical and toys sales as it continued to focus ranges and reduce space allocation in some categories.
As for that improving trend in clothing sales, it said higher full-price sales participation delivered a 4% improvement in profitability during the year, alongside market share gains. Its renewed focus on design and range in Womenswear resulted in particularly strong sales growth of nearly 5% and an improvement in customer perception of its ranges.
We all know Reiss as a premium retailer of ‘grown-up’ clothing and accessories, but the company has clearly become broody and has moved into babywear for the very first time.
Reiss
Reiss Baby is said to be a “timeless” new collection that “brings the Reiss modern design aesthetic and premium quality we are known and loved for, to elevated everyday essentials and gifting pieces for newborns and babies”.
Admittedly, it’s not a first outside of adults’ clothing for the brand as it launched kidswear back in 2021. But it clearly saw potential to expand that and now it’s addressing the 0-24 months age range, focusing on a mix of gifting pieces such as cashmere sets and blankets, and everyday essentials such as soft cotton rompers, sleep suits, bibs, mittens and muslins.
The Next-controlled company said the new offer “reflects all the qualities of our childrenswear collection and stays true to the subtle design elements and neutral hues of our men’s and women’s collections”.
The gender-neutral pieces come in premium cotton or super-soft cashmere, in a colour palette of lemons, greys and neutral shades.
Reiss called out standout pieces including the Eder cashmere hoodie and leggings gift set in mint and mink shades and the luxe pointelle knit Lou cashmere blanket in white, as well as the Eleanora seersucker floral print romper and the Amber balloon print set of sleepsuit, hat, bib and blanket.
Available online only, pieces start at £24 for a cotton sleepsuit, rising to £120 for the cashmere blanket.
Entertainment8 years ago