Shen’s ambitions to list on the London Stock Exchange have come under renewed doubt after the fast-fashion giant came under fire by MPs for repeatedly failing to address concerns about its cotton sourcing and alleged forced labor in Xinjiang.
The China-founded retailer, which hopes to secure a UK flotation this year, appeared before the business and trade select committee on Tuesday, where Yinan Zhou, Shein’s general counsel for EMEA, was questioned about the company’s supply chain. Practices. However, her refusal to give definitive answers about the source of Sheen’s cotton angered committee members.
Liam Byrne, who chairs the committee, expressed shock that a company that sells billions of pounds worth of products to British consumers – and is seeking to float its shares in London – could provide so little clarity. “You have given us almost zero confidence in the integrity of your supply chains,” he said. “Your reluctance to answer basic questions has frankly amounted to contempt of the committee.”
Chu responded by promising to respond to lawmakers on certain points, adding: “We abide by the laws and regulations everywhere we do business.” We have a supplier code of conduct, robust systems and policies, and strong enforcement procedures to ensure we adhere to these standards.
However, she also declined to comment on whether Chen believes forced labor exists in Xinjiang, insisting: “I don’t think it’s our place to comment on… having a geopolitical debate.” Byrne challenged this position and described the matter as a “matter of fact.” Liberal Democrat MP Charlie Maynard went further, accusing Cho of “willful ignorance” and stressing that a simple search for cotton on Sheen’s website yielded about 20 related products.
Sheen’s tense appearance before Parliament comes amid growing concern about her proposed blockbuster listing in London. After rapidly expanding across the US, Europe and the UK, the retailer has filed paperwork with Britain’s market regulator, but is awaiting regulatory approval in both the UK and China. There are growing calls for greater scrutiny of Shein’s environmental, social and governance credentials – especially after it admitted finding cases of child labor at some third-party manufacturers last year.
Several senior politicians have expressed concerns about Shein’s potential competitive advantage in avoiding duties and VAT for British consumers, while the company itself has previously insisted it maintains a “zero tolerance policy” on forced labour. Shein originally intended to list in America, but withdrew after the US Securities and Exchange Commission requested a public filing.
The London float could be worth an estimated £50.3bn, which would represent one of the biggest deals on the London Stock Exchange in a decade. Despite repeated attempts, Sheen did not immediately respond to requests for comment.