Online fast-fashion retailer Shein is said to be acquiring Everlane, the apparel brand known for its sustainability ethos, in a deal valuing the company at $100 million, according to information shared by Reuters.
While the transaction has not been confirmed by either party yet, Bloomberg reported that majority owner L Catterton’s board of directors approved the sale this past Saturday, making it very likely. The consumer-focused private equity fund, backed by LVMH and Bernard Arnault’s family holding company, acquired a stake in 2020, when the fund led a $85 million funding round. The apparel brand was then valued at around $600 million, when it was at peak popularity.
Everlane And Shein, An Ironic Alliance
Since its launch, Everlane has been a mission-driven company, built on an ethos of ethical practices, premium quality and radical transparency. Its website reads: “We’re on a mission to clean up the industry. It’s a movement we’re calling Cleaner Fashion.” The brand openly shared factory locations and production costs, claimed it had no intermediaries allowing fair pricing, and designed wardrobe staples for elevated everyday basics.
The synergies with Shein are therefore not just hard to find, they’re impossible to truly justify. For context, while Everlane became a near cult-brand in the late 2010s, its popularity and prosperity seemed to slowly decline year-on-year post-COVID. It struggled with rising costs, started facing an increasingly competitive landscape, and lost some level of cultural relevance as consumer behavior towards ethical consumption is not as apparent as what shoppers often claim to value.
In 2024, Alfred Chang became CEO and led a repositioning towards clean luxury, but it hasn’t been enough to make the brand popular again. The brand faced restructuring needs resulting in a $25 million loan from Gordon Brothers and a $65 million asset-based revolving credit facility, suddenly making margins and profits much more important than radical transparency. The majority sale to Shein can attest to it.
As a brand built on ethical fashion on a mission to improve the industry, Everlane (and its CEO) has sold its soul to the devil by associating itself with one (if not the) most polluting fast-fashion player in the world. The retailer produces an estimated 1 billion items per day, with around 450,000 available in real time. Over 99% of its emissions come from its supply chain, or Scope 3 emissions which includes fabric production, product dyes, raw material and logistics. Shein’s Scope 3 emissions increased 170% in just two years, showing a tendency that indicates absolutely no interest in changing its model for the environment’s sake.
Acquiring Western IP and Presence
The fact that Shein is acquiring a minority stake in Everlane is very telling. First, market signals have suggested Shein’s determination to invest in distressed fashion brands and retailers. It acquired a stake in Forever 21, Missguided, and shown interest in Topshop, although this hasn’t materialized as of yet. This latest transaction shows a motivation to acquire struggling western fashion IP and absorbing it into its highly efficient supply chain model, while also funneling traffic towards its own ecosystem.
Through these acquisitions, Shein absorbs customer data, product preference data as well as geographic preference and pricing sensitivity data, all extremely valuable to feed the Shein production machine and develop designs for a range of audiences.
Some experts believe Shein is also aiming to grow its European presence and invest in distressed assets to improve its reputation, although the retailer has developed a competitive, strong and profitable model in very little time, and does not seem to care much about its reputation amongst sustainability defensers and overall public opinion. Young audiences are buying and that’s what they care about.
For Everlane however, this change of ownership is disastrous from a PR perspective. Following rumors of the sale, hundreds of social media users shared their shock and disappointment, effectively saying their goodbyes to the brand. While the sale was led by private equity rather than Everlane directly, the perception remains the same publicly, and the impact will likely be felt immediately.
While Shein may be able to improve Everlane’s operational efficiency and margins, its influence will inevitably be felt across the brand’s overall value proposition, making it difficult for Everlane to retain credibility within its core positioning.