Shein Abandons UK Warehouse Plans Amid IPO Uncertainty

Fast fashion giant Shein has scrapped plans to open a UK warehouse, casting further doubt over its potential £50 billion London Stock Exchange listing.

The online retailer had been scouting locations across the East Midlands, including Derby, Daventry, Coventry, and Castle Donington, but has now confirmed it has “no plans” to proceed with the expansion.

Regulatory Pressure Mounts

The decision comes amid increasing regulatory scrutiny in the UK, US, and EU, particularly concerning Shein’s supply chain transparency and environmental, social, and governance (ESG) credentials.

One of the biggest threats to Shein’s business model is tax reforms in its key markets. The company benefits from the US de minimis exemption, which allows packages valued under $800 (£645) to enter the country duty-free. However, Donald Trump has announced plans to close this loophole if re-elected—a move that could significantly disrupt Shein’s supply chain.

Similarly, the EU is considering similar reforms, which could increase import duties on Shein’s products and force a major operational shift for the company.

IPO Prospects in Jeopardy

Shein’s planned London Stock Exchange flotation—touted as one of the UK’s biggest-ever IPOs—has also been overshadowed by forced labour allegations.

Last week, campaign group Stop Uyghur Genocide launched a judicial review process aimed at blocking Shein’s UK listing, citing concerns over the company’s alleged links to forced labour in China. Shein has denied all allegations, stating it “strictly prohibits forced labour in its supply chain globally.”

Meanwhile, UK MPs have ramped up pressure on Shein, grilling executives in the Business and Trade Committee last month. When Shein officials refused to confirm whether the company sources cotton from China, MPs accused the retailer of “wilful ignorance.”

As concerns grow, reports suggest that Shein is now considering lowering its IPO valuation to £40 billion, down from the initial £50 billion estimate.

Expansion Challenges

Beyond regulatory hurdles, Shein’s reputation in the property industry is reportedly complicating its UK expansion. Insiders suggest that landlords are wary of the company’s ESG track record, making it difficult for Shein to secure warehouse sites.

Despite these setbacks, Shein has played down the warehouse U-turn, with a spokesperson stating:

“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.”

Future in the UK Uncertain

With mounting regulatory, ethical, and operational challenges, Shein’s ambitions for a London stock market debut and broader UK expansion now hang in the balance.