Chinese fast-fashion juggernaut Shein is set to acquire Everlane, the online retailer known for its ethically sourced and sustainable clothing, in a deal that underscores the shifting dynamics of the fashion industry. The acquisition was confirmed in a letter to Everlane employees from CEO Alfred Chang, obtained by The Associated Press on Friday. Financial terms were not disclosed, and Shein declined to comment.
A Clash of Philosophies
Everlane was founded in 2011 by Michael Preysman and Jesse Farmer with a mission to produce eco-friendly and affordable clothing. The company distinguished itself by publicizing regular audits of its pay and working conditions, as well as its environmental impact. It opened its first physical store in 2017. However, in recent years, the brand has faced controversies regarding worker treatment, according to media reports.
L Catterton began acquiring significant stakes in Everlane in September 2020, becoming its majority owner. The private equity firm also holds stakes in brands like Boll & Branch, Etro, and Birkenstock. Preysman stepped down as CEO in 2022.
Struggles and Survival
Chang, who became CEO in 2024, wrote in the letter that the partnership with Shein will allow Everlane to remain independent while gaining stability and resources to make a larger impact. "Like many brands, we've faced increasing pressure in a rapidly changing retail landscape," he noted. "This partnership gives us the stability and resources to make a larger impact, without compromising on the quality and standards that make Everlane, Everlane."
Chang emphasized that Everlane will stay true to its sustainability commitments and that he will continue as CEO, with the leadership team remaining in place.
The takeover comes as Everlane struggles with declining sales and mounting debt, according to Neil Saunders, managing director of GlobalData Retail. "The company needs new ownership to survive, and Shein can provide that financial stability," he said.
An Unlikely Fit
For Shein, the acquisition offers a way to establish a presence outside of fast fashion, as growth in the sector becomes more challenging. Tariffs and trade restrictions under the Trump administration have disrupted imports of inexpensive clothing that dominate fast fashion.
However, Saunders noted that Everlane and Shein are an "odd couple." While Shein is unlikely to completely overhaul Everlane's supply network, even the association with the Shein group may be "somewhat jarring for core Everlane customers."
"Ultimately, the deal likely saves Everlane," Saunders concluded. "But that salvation comes at a price."
