We were willing to relax our listing standards. The Chancellor Rachel Reeves flew out to Beijing to beg for investment in Britain. And perhaps, most importantly of all, we were willing to turn a tactfully blind eye to the multiple allegations of brutal working conditions, poverty wages, and environmental carelessness.
The City of London was planning to go to sometimes embarrassing lengths to secure the IPO of the Chinese fast fashion giant Shein. And yet, it has this week apparently decided on Hong Kong instead.
There is no escaping a simple conclusion: this is a humiliation for London. The sorry saga should be a wake-up call for regulators who now have to take urgent action – or else the London market will soon disappear completely.
It was meant to be the blockbuster new listing that would revive the London stock market. Shein was estimated to be worth upwards of £50bn, and while its dirt cheap T-shirts and dresses may not be to everyone’s taste, it is a hugely successful business.
It pioneered the model of manufacturing up-to-the-moment clothes in factories in China and then shipping them directly in small packages to customers across the United States and Europe.
It faces plenty of competition, but it has still taken a big chunk of the market from both online and high street rivals such as Boohoo and Primark, and built a major company with sales last year of $38bn (£28bn), up by 19pc year-on-year, and profits of more than $1bn. By any standards, it is a formidably successful business.
The Shein IPO would have been a coup for London, and it was one that regulators were desperate to secure. There were plenty of challenges.
New York’s Nasdaq market wouldn’t touch it because of allegations of human rights abuses. The regulators took a lot longer than usual to approve a potential IPO amid questions over its labour standards. There were even questions raised by the UK’s Anti-Slavery Commissioner. But all that was eventually brushed aside. The City decided it needed this listing, and it would do whatever was necessary to secure it.
The market certainly needed a shot in the arm. The number of companies listed in London has fallen from 2,400 a decade ago to just 1,600 now. Businesses have left for the United States, where valuations are more generous, accepted takeover offers, or else simply decided the rules are too cumbersome and opted for private ownership instead.
There are hardly any IPOs to replace them. There were only 18 listings last year, raising a mere £770m, an 18pc fall on a year earlier. There have been virtually none of any significance so far this year, and well-known companies such as Deliveroo are leaving the market. Shein might have been controversial but staging its IPO in London would at least have shown the City was still a contender on the global stage.
