Common stockholders will receive nothing from the transaction, which ends a prolonged period of financial strain for the brand
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Shein is acquiring U.S. apparel brand Everlane from majority owner L Catterton in a deal valuing the San Francisco-based company at about $100 million, according to Retail Insight Network. The company's board approved the deal on Saturday, according to Bloomberg.
At roughly $100 million, the price tag is far below what Everlane was worth when online retail was at its peak. A message distributed to shareholders confirmed that those holding common stock are not entitled to any proceeds. What preferred shareholders stand to receive — whether cash, Shein equity, or nothing — has not been disclosed, according to Reuters.
The brand's debt load had grown to roughly $90 million, made up of two instruments: a $25 million loan from Gordon Brothers and a revolving credit facility backed by assets worth $65 million. To manage that financial pressure, CEO Alfred Chang and majority owner L Catterton had been reaching out to potential outside investors. The private equity firm was open to bringing in a partner or exiting entirely, though Shein ultimately came in as the sole buyer, according to Retail Insight Network.
The acquisition presents a contrast in brand identity. Everlane built its following in the early 2010s around what it called "radical transparency" on pricing and supply chain practices, positioning itself as a sustainability-minded, affordable basics brand. Shein operates as a Chinese fast-fashion platform that has drawn scrutiny over its manufacturing and labor practices.
When L Catterton took its minority position in the company around the end of 2020, founder Michael Preysman stepped away from the brand. A push to reposition Everlane in a more premium tier — competing with brands like Theory and Frankie Shop — fell short, leaving it vulnerable as rivals gained ground, according to Retail Insight Network.
The acquisition arrives at a difficult moment for a generation of digitally native brands. Allbirds, for instance, only recently announced a turnaround strategy after nearly folding entirely, according to Bloomberg. Across the sector, brands that built their followings during the surge in e-commerce have found it hard to hold their footing as shoppers pulled back.
Facing headwinds from U.S. tariffs on its primary operations, Shein moved to open its Chinese manufacturing infrastructure to outside fashion labels as a fee-based service, Bloomberg previously reported. Everlane, Shein, and L Catterton did not immediately respond to requests for comment.
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