China’s Shein has abandoned plans to open a UK warehouse as doubts mount over its planned blockbuster London listing.
The fast fashion company has halted a search for space in the Midlands and confirmed there were now “no plans” to open a warehouse in Britain.
The Telegraph revealed last summer that the company had dispatched a team of representatives to the East Midlands to visit potential warehouses in Derby, Daventry, Coventry and Castle Donington, with the company believed to have been considering sites as large as 600,000 sq ft.
The search was kicked off as Shein laid the groundwork for a blockbuster £50bn float in London.
However, that listing is now in the balance after a threatened crackdown on Shein’s business model in the EU and the US, and amid criticism from MPs about the lack of transparency around Shein’s supply chain.
Insiders stressed that the decision to pause the warehouse search had been made in the middle of last year and said it was part of a broader review into how much warehouse capacity Shein needed in Europe.
A spokesman for Shein said: “To support the growth of the business, Shein constantly explores warehousing locations worldwide. However, as Shein has no immediate need for a warehouse in the UK, there are no plans to have one.”
Shein had been expected to debut on the London stock market in the first half of this year, in what would be one of the UK’s largest listings.
However, it has recently faced a series of setbacks. Donald Trump this month moved to close a tax loophole that has been central to the fast fashion company’s business model. The US president said he would remove the de minimis exemption for small packages worth less than $800 (£645) from China, although later suggested these plans had been delayed until proper systems are in place to process packages.
Shein has built its business model around sending small packages to customers directly from China. Most are below the tax threshold.
The EU is also said to be plotting a tax crackdown on Shein and country mate Temu.
Meanwhile, in the UK, the company has been facing mounting pressure over alleged abuses in its supply chain, casting doubt over whether it will be able to pursue the listing in London.
Last week, The Telegraph revealed that campaigners at Stop Uyghur Genocide had kickstarted a judicial review process to block the planned float.
The group has claimed there is alleged evidence that Shein has benefitted from forced labour. This has been denied by the Chinese company, which has said it “strictly prohibits forced labour in its supply chain globally”.
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