Shein doubles profits in Britain before planned float

Shein, the Chinese-founded online fast-fashion retailer, has doubled its profits in Britain and overtaken Boohoo before a planned blockbuster float in London.
Pre-tax profit at Shein UK rose from £12.2 million to £24.4 million in the year to the end of December, on which it paid £5.7 million in income tax, according to new accounts at Companies House.
The Singapore-based retailer, which is considering a float on the London Stock Exchange, reported that revenues rose from £1.12 billion to £1.55 billion during the same period. UK sales at Boohoo Group, its competitor, were £1.09 billion last year.
The rise of Shein, founded in Nanjing in 2012, has put pressure on its fast-fashion rivals in Britain such as Asos and Boohoo. It sells ultra-cheap clothes, some costing as little as 39p, direct from factories in China to shoppers in Britain and the United States. Its prices have attracted younger customers but it has also drawn criticism for its environmental and business ethics.
The online retailer said a “milestone” for the year was setting up a UK base in Manchester, a city that is also home to Boohoo and PrettyLittleThing — as well as Missguided, which Shein owns. It also opened temporary shops in other cities, including Liverpool, to showcase products from its bestselling collections.
The UK business had 33 employees last year, primarily involved in marketing, but the new office could pave the way for recruiting a bigger team and targeting expansion across the country.
Shein was hoping to list in America but the US Securities and Exchange Commission told the company that its application would not be accepted unless it submitted a public filing. Shein did not find the expected glare palatable and it is aiming to list elsewhere, with London a leading candidate.
The retailer is reportedly set to hold informal investor meetings in the coming weeks for the planned float, during which an IPO-bound company fields investors’ questions and tests their investment appetite.
It has been estimated that a potential flotation would value the business at £50.3 billion, which would make it one of the largest deals for the London Stock Exchange in a decade.
However, the plans have provoked concerns about its environmental, social and governance credentials, notably its labour and supply chain policies. Several senior politicians have said that a listing should be subjected to greater scrutiny, while retailers have complained that Shein gets a price advantage by avoiding duty and VAT for British consumers.
Julian Dunkerton, the founder of the struggling fashion retailer Superdry, said Shein and other large online players should be forced to pay more tax “or there will be British bankruptcies and the tax take will be lower”.