Shein to acquire Everlane in $100m deal to resolve debt crisis
The transaction, reported by Puck News, resolves $90m in liabilities for the sustainable fashion brand, though common stockholders will receive no proceeds.
Chinese fashion retailer Shein is set to acquire US direct-to-consumer label Everlane in a transaction valued at approximately $100 million, following board approval. The deal, first reported by Puck News citing unnamed sources, brings to a close a prolonged period of financial strain for the American brand, which had accumulated $90 million in liabilities.
Everlane’s debt burden comprised a $25 million loan from Gordon Brothers and a $65 million asset-based revolving credit facility. Private equity company L Catterton, the brand’s majority shareholder, and Everlane chief executive Alfred Chang had been exploring external investment options to address the financial pressure. L Catterton was reportedly willing to accept either a co-investor or a complete buyout, with Shein ultimately opting for full ownership of the brand.
A note to shareholders cited in the report confirmed that holders of common stock will receive nothing from the transaction. The exact structure of the deal remains undisclosed, with no clarification on whether the purchase involves a cash transfer or how preferred shareholders will be compensated, whether through cash or Shein equity. Retail Insight Network has approached both Everlane and L Catterton for comment.
Everlane was established in the early 2010s with a brand identity rooted in sustainability and “radical transparency” regarding pricing and supply chain practices. The label initially gained an audience as an affordable contemporary basics brand before facing growing competitive pressure. L Catterton acquired a minority stake in late 2020, a move that coincided with the departure of founder Michael Preysman and marketing lead Alexandra Spunt.
Subsequent attempts to move the brand upmarket, targeting competitors such as Theory and Frankie Shop, were unsuccessful. The acquisition presents a stark contrast between Everlane’s founding principles and Shein’s business model. The original report was published by Retail Insight Network, a GlobalData owned brand.
