British Fashion Council warns Shein’s planned £50 billion stock market flotation is ‘a major concern’ for the industry

The British Fashion Council (BFC) has warned that Shein’s planned £50 billion initial public offering on the London Stock Exchange is a ‘major concern’ for the industry.

In a criticism that could damage the Chinese online fashion giant’s efforts to conquer the city, the influential trade body said “questions remain” about the group’s controversial business practices.

Shein has been criticized for using suppliers who exploit low-paid garment workers in China to sell his clothes at low prices.

The BFC’s intervention comes at a critical time for Shein as plans are reportedly being finalized to list London for what would be this year’s largest IPO.

A response from the American equivalent of the BFC, the National Retail Federation, was one of the reasons Shein had to abandon his original plans to float in New York.

Shein is not part of the BFC, whose members include Mulberry, Burberry and Jimmy Choo, while River Island and Jigsaw are among its patrons.

The BFC did not comment on whether Shein would be allowed to join in the future.

Caroline Rush, CEO of the trade body, said: ‘At a time when global fashion leaders are rightly focused on making our sector more socially, environmentally and economically sustainable, the government’s commitment is for Shein to list on the London Stock Exchange, and Shein’s decision to do this is causing major concern for British fashion designers and retailers.

‘While we appreciate Shein’s commitment to meeting acceptable industry standards, questions remain about the ethics and sustainability of a business model and supply chain that consistently undermines British designers and retailers, and these still need to be addressed answered.’

The BFC wants the government to do more to support an ethical fashion economy and promises to strengthen regulation of the clothing market. Ministers must take action to “ensure a level playing field for all companies in the sector,” Rush said.

High street retailers are also unhappy that Shein can avoid hefty customs taxes because it ships directly to online shoppers from China.

Due to its size, the Chinese group would automatically join the ranks of the FTSE 100, alongside other British fashion retailers such as M&S and Frasers Group.

Many in the city hope this will revive the troubled stock market, which is struggling with an exodus of companies and a shortage of blockbuster listings.

But top investors have warned the LSE that courting Shein smacks of desperation.

Shein has hired top PR agencies and joined the British Retail Consortium in a bid to win over the business community.

Chairman Donald Tang has also met with Chancellor Jeremy Hunt in recent weeks and discussed a list with the Labor Party.

A spokesperson for Shein said: ‘Shein is investing millions of pounds in strengthening governance and compliance across our supply chain.’

The spokesperson said regular audits of suppliers show “consistent improvement in performance and compliance”, and that this includes ensuring employees are paid “fairly”.

Shein is based in Singapore, but its main manufacturing operations are in China.

As a result, the company needs approval from Beijing regulators to list its shares in London.

They blocked Shein’s plans to float in New York, amid deteriorating US-China relations.