Shein is officially on the path to acquiring Everlane, both companies have just confirmed, after much industry speculation. The ultra-fast fashion giant will buy the majority stake in Everlane from LVMH-backed private equity firm L Catterton for an undisclosed amount, pending regulatory approval.
As Puck reported in March, L Catterton had been on the hunt for an investor, hoping to clear about $90 million of debt Everlane had amassed. This included a $25 million loan from investment firm Gordon Brothers and a $65 million asset-based revolving credit line. With regards to the debt, the companies say they do not comment on market speculation.
The news comes after almost a week of intense speculation, with leaks, unconfirmed reports, and hot takes swirling. Behind the scenes, Shein and Everlane were busy with due diligence.
Everlane employees were officially informed on Friday morning. In a message to staff — obtained by Vogue Business — Everlane CEO Alfred Chang addressed the moral conflict many might have felt about the change in ownership. “This past week has been a hard one. Seeing our company in the media, and in that light, was painful. Needing to stay silent per standard process in these matters has been even harder. I want you to know I’ve felt the weight of that alongside you,” he wrote. “I want to be clear: Everlane remains Everlane. I will continue as CEO, our leadership team will stay in place, and we’ll continue operating independently, with our design standards, brand philosophy, and values intact.. Moving forward, Everlane will unlock key opportunities by increasing our competitive advantage and reaching more customers around the world.”
The Everlane sale marks a pivotal shift for the sustainable fashion movement. For many, Everlane represents the optimistic millennial ideal that consumers could shop their way to sustainability. With its sale comes the overdue acknowledgment that customer behavior alone will not push the fashion system towards better practices; that sustainability cannot rely on the moral argument to justify its price premiums; and that deeper, political action is needed to raise the baseline of the entire industry rather than pinning everything on a well-intentioned but under-resourced minority.
Some experts say that there could be benefits to this unlikely alliance. Shein — whose emissions are skyrocketing — is highly stigmatized in the industry, despite the fact that many brands share similar practices. But the company has always responded to criticisms that its business model drives overproduction by pointing to its data-driven, on-demand supply chain — an ecosystem Everlane could now plug into. This could unlock greater operational efficiency and drive meaningful impact if the companies are able to align their growth expectations with absolute emissions reductions.
“Like many brands, we’ve faced increasing pressure in a rapidly changing retail landscape. This partnership allows us to remain independent, and gives us the stability and resources to make a larger impact, without compromising on the quality and standards that make Everlane, Everlane,” said Chang. “It means we can invest more in our product, innovation, our people, and our craft — ultimately delivering on our founding mission to make everything that Everlane stands for more accessible.”
