London's IPO Hopes Hang by a Shein: Can Bankers Revive the Market?

The London Stock Exchange (LSE) has long been a beacon for global capital, but its IPO market is in a freefall. With just 18 listings in 2024—its worst year on record—bankers are desperate to reboot activity. Enter Shein, the fast-fashion giant poised to list in April 2025. Yet its troubles—from collapsing valuations to supply chain scandals—threaten to derail the entire effort. Let’s unpack this precarious moment and what it means for investors.

Shein’s IPO: A High-Stakes Gamble

Shein’s journey to London has been anything but smooth. Once valued at a staggering £50 billion, its target has plummeted to £23.8 billion as geopolitical tensions and operational headaches pile up. The 125% tariff on Chinese exports—a direct hit to its ultra-cheap business model—has forced Shein to rethink its supply chain. Meanwhile, rival Temu (backed by PDD) has muscled in, grabbing market share and sending Shein’s profits plunging by over 70% to below $400 million.

But the real drama lies in regulatory limbo. While the UK’s FCA has given a green light, Chinese regulators remain a sticking point. Add in accusations of forced labor in Xinjiang and environmental greenwashing, and you’ve got a recipe for investor skepticism. The UK’s Sustainable Investment groups are already howling, accusing regulators of lowering standards to attract listings.

London’s IPO Market: Ready for a Comeback?

Despite Shein’s struggles, 2025 could be the year London fights back. High-profile floats like Shawbrook Bank (£2 billion valuation) and Starling Bank (with £301 million in profits) are primed to ignite activity. Even Monzo, after years of turmoil, is reportedly preparing a listing.

But there’s a catch: geopolitical risks. The U.S.-China trade war is a double-edged sword. While Shein seeks refuge in London, U.S. tariffs and data security concerns could push it toward Hong Kong instead—a move that would slash its valuation further. Let’s not forget: Hong Kong’s P/E ratios lag London’s by 1.7 points, a gap that could cost Shein billions.

The Bigger Picture: Structural Challenges Ahead

London’s IPO drought isn’t just about Shein. The LSE’s 10% minimum float rule—a relic of old-school governance—has scared off smaller firms. And with global markets volatile, investors are picky. Take Ebury, a fintech aiming for a £2 billion valuation: its delayed 2023 plans show how easily momentum can stall.

Then there’s the ESG elephant in the room. Shein’s labor controversies and environmental lawsuits have exposed London’s vulnerability. If regulators greenlight this IPO without credible reforms, the market risks losing its “high standards” reputation—a selling point that once lured global giants.

Conclusion: Risky, but Not Over Yet

London’s IPO revival hinges on Shein’s success—and that’s a big “if.” If it pulls off the listing, it could unlock £6.6 billion in capital and spark a wave of deals. But with valuations halved and geopolitical storms looming, the odds are stacked against it.

The numbers don’t lie:
- 18 IPOs in 2024 vs. ~100+ in 2019: London’s decline is stark.
- Temu’s app downloads surpassed Shein’s in 2024: A clear sign of shifting consumer loyalty.
- Starling’s 55% profit jump: Proof that fintechs can thrive—if they avoid Shein’s pitfalls.

Investors, take note: London’s comeback is possible, but only if it balances growth with governance. Shein’s IPO is the litmus test. Fail here, and the LSE might slip further down the rankings. Win, and 2025 could be the year it roars back. Either way, buckle up—it’s going to be a wild ride.