Shein’s ambitions to listing on the London Inventory Trade have been forged into renewed doubt after the fast-fashion behemoth was roundly criticised by MPs for repeatedly failing to handle issues about cotton sourcing and alleged pressured labour in Xinjiang.
The Chinese language-founded retailer, which hopes to safe a UK flotation this yr, appeared earlier than the Enterprise and Commerce Choose Committee on Tuesday, the place Yinan Zhu, Shein’s normal counsel for Europe, the Center East and Africa, was grilled on the corporate’s provide chain practices. Nevertheless, her refusal to offer definitive solutions relating to the origin of Shein’s cotton sparked anger amongst members of the committee.
Liam Byrne, who chairs the panel, expressed shock {that a} agency promoting billions of kilos’ price of merchandise to British shoppers—and searching for to drift in London—might present so little readability. “You’ve given us almost zero confidence in the integrity of your supply chains,” he mentioned. “Your reluctance to answer basic questions has frankly bordered on contempt of the committee.”
Zhu responded with a promise to write down again to MPs on sure factors, including: “We comply with laws and regulations everywhere we do business. We have supplier codes of conduct, robust systems and policies, and strong enforcement measures in place to ensure we adhere to these standards.”
But she additionally refused to touch upon whether or not Shein believes pressured labour exists in Xinjiang, insisting: “I don’t think it’s our place to comment on … to having a geopolitical debate.” Byrne challenged this stance, describing the matter as “a question of fact”. The Liberal Democrat MP Charlie Maynard went additional, accusing Zhu of “wilful ignorance” and highlighting {that a} easy seek for cotton on Shein’s web site yielded round 20 related merchandise.
Shein’s tense look earlier than Parliament comes amid rising unease over its proposed blockbuster itemizing in London. Following fast enlargement throughout the US, Europe and the UK, the retailer has filed papers with Britain’s market regulator, but it awaits regulatory approval in each the UK and China. There are mounting requires higher scrutiny of Shein’s environmental, social and governance credentials—notably after it admitted to discovering situations of kid labour in a few of its third-party producers final yr.
A number of senior politicians have voiced issues about Shein’s potential aggressive benefit in avoiding obligation and VAT for British shoppers, whereas the corporate itself has beforehand insisted it maintains a “zero-tolerance policy” on pressured labour. Initially aspiring to listing in America, Shein withdrew after the US Securities and Trade Fee demanded a public submitting.
The London flotation might be price an estimated £50.3 billion, probably marking one of many largest offers on the London Inventory Trade in a decade. Regardless of repeated makes an attempt, Shein didn’t instantly reply to requests for remark.
