Chinese online fast fashion retailer Shein saw its UK profits double last year as revenue surged to £1.6 billion ahead of an expected mammoth share listing in London.
Financial results from the UK company Shein Distribution UK show that turnover jumped by 40% in the 12 months to end December compared with the previous 16-month reporting period of September 2021 to December 2022.
On a like for like basis revenue almost doubled while pre-tax profits went up from £12.2 million to £24.4 million, according to the figures filed at Companies House which were first reported by the UKTN tech news website.
The jump means that Shein is already one of the country’s biggest e-commence players despite having only launched in the UK around a decade ago.
It is known for its cut price fashion including sweatshirts from £3.70 and jeans from £14.46.
Shein is set to hold informal investor meetings in the coming weeks for its planned London IPO, as it pushes ahead with preparations although the flotation has yet to have been granted UK regulatory approval. Founder Sky Xu is reported to have flown to London last week to meet potential investors
The fast-fashion business had originally planned a New York IPO but decided to switch to London amid hostility from lawmakers in Washington over issues such as data security and labour practices. Shein is understood to be eyeing a valuation of £50 billion in London, which would comfortably make it the biggest-ever tech IPO in the UK.
But the company is still awaiting approval from Chinese regulators to press ahead with the overseas listing. The approval process has been slowed by China’s new data security laws, which require a thorough examination of the company’s corporate structure, adding complexity to its IPO ambitions.
The company’s business and employment practices have also come under scrutiny in the UK. Labour MP Liam Byrne, who chairs the Commons business and trade select committee, said the UK should introduce new legislation to increase scrutiny of supply chains that may include products made in the Xinjiang region of north-western China.
Alicia Kearns, the Conservative chair of the Commons foreign affairs committee, said: “With Shein’s prices so low the London Stock Exchange needs to ask itself, whose suffering is subsiding those prices?”
“A company which has failed to make full disclosures about its supply chains as required by UK law, and where there are grave concerns about its factory working conditions has no place in London.”
At the weekend Superdry founder Julian Dunkerton said Shein and other e-commerce giants should be forced to pay more tax “or there will be British bankruptcies and the tax take will be lower.”
According to Dunkerton, Shein should be paying import duty and VAT on the low-value goods it imports, as well as an environmental tax linked to the scale of home deliveries and its fast-fashion products.
The results show that Shein paid £5.72 million in UK tax last year compared with £2.35 million in the previous financial reporting period.
