In a $100 million deal, online fast-fashion store Shein is allegedly buying apparel retailer Everlane from majority owner global private equity firm L. Catterton, Puck News reported on May 17, citing an inside source with “direct knowledge.”
The acquisition was reportedly approved by L. Catterton’s board of directors on May 16.
Companies and individuals holding Everlane stock will not receive a payout from the acquisition. It is unclear if shareholders will receive shares or financial compensation.
As of May 19, the buyout has not yet been confirmed by Everlane or Shein themselves, but Bloomberg has said the transaction is likely true.
Per a report from Puck News in March, L. Catterton and Everlane’s Chief Executive Alfred Chang have been seeking an investor to help rectify a $90 million debt the retailer has accrued.
The firm and Chang were also open to injecting extra funds or selling the company to an interested investor.
- Catterton was granted a stake in Everlane in 2020 after the firm ran a funding round worth $85 million, which increased the retailer’s value to $600 million.
In the years that followed, the apparel brand began to lose the popularity it had during and before COVID-19. Sales were declining, and the value of the company went down with it.
During this time, then-CEO Michael Preysman stepped away, and Alfred Chang took his place in 2024. Despite Chang’s attempts to repopularize Everlane, the brand remained on the sidelines.
Everlane became popular in the 2010s and regained its fame during COVID largely due to its commitment to sustainability and “radical transparency” with customers. The brand emphasized its commitment to producing clothes with organic, natural materials. It also disclosed the factory where its clothes were produced and the costs associated with that production.
The brand still proclaims the same commitment. “Natural isn’t our new direction. It’s our origin. But that’s not the whole story. We go further. Organic and regenerative over conventional. Traceable and vague. Designed to last. “Responsible fashion has never looked better,” the front page of Everlane’s website reads.
But following the retailer’s alleged acquisition of Shein, many consumers have started to doubt Everlane’s declared loyalty to ethical clothing.
Shein has become popular across the globe, especially during and post-COVID, for its diverse selection of very cheaply priced fashion wear that ships nearly everywhere. But their fast-fashion approach swiftly became an object of scrutiny, and the company swiftly became known for overconsumption and exploitative labor.
In 2022, a documentary by Channel 4 uncovered several cases of illegal labor practices in factories from which Shein received its clothes. Many workers were laboring for 16-hour days, with none or only one day off per month, while receiving only about £0.03 per item.
An investigation by the BBC uncovered similar findings. Many workers were found to have no days off or to be laboring around 75 hours a week.
In 2023, Shein itself uncovered two cases of child labor in its factories.
Shein has addressed criticisms by promising to improve conditions for workers and to terminate contracts with factories illegally exploiting them.
But according to interviews conducted in 2024 with factory employees, not much changed despite Shein’s promises.
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