Everlane, the San Francisco-based retailer known for marketing ethically sourced and more sustainable clothing at lower prices, is being acquired by Shein, the fast-fashion company founded in China, according to a letter Everlane’s chief executive sent to staff.
The Associated Press obtained the letter on Friday in which Everlane CEO Alfred Chang confirmed the transaction to employees, the company said it did not disclose the purchase price, and Shein declined to comment, the AP reported.
Chang said in the memo that the partnership would allow Everlane to remain independent while giving the business stability and resources, and he tied the move to Everlane’s ability to invest more in product, innovation and staff. He also said Everlane would stay true to its “sustainability” commitments, according to the letter AP reviewed.
Chang wrote that he will continue as CEO and that Everlane’s leadership team will remain in place, the AP reported, adding that the “past week has been a hard one” and that seeing the company in the media “in that light” had been painful as rumors swirled about the deal.
The deal comes as Everlane has struggled, with sales down and debt rising, according to Neil Saunders, managing director of GlobalData Retail, who said the company needs new ownership to survive. Saunders also said Shein could help the brand operate in a market where growth in fast fashion is becoming more difficult, citing trade pressures affecting imports of cheaper clothing.
Analysts said the acquisition also highlights how consumer preferences and brand strategies can shift quickly. Bruce Winder, an independent retail analyst, said offering greater transparency about factories was not enough for customers and that shoppers also increasingly wanted cheaper prices; he cited Allbirds as an example, noting that after sales of its once-popular shoes fell it rebranded as “NewBird AI” and shifted focus to artificial intelligence and cloud computing services.
Everlane has faced broader scrutiny as well, according to media reports cited by the AP about the treatment of its workers and its sustainability claims. The brand was founded in 2011 by Michael Preysman and Jesse Farmer, opened its first physical store in 2017, and later faced pressure from questions about whether its approach met the expectations of eco-minded shoppers.
L Catterton, the AP reported, began acquiring significant stakes in Everlane in September 2020 and became its majority owner. Everlane also has been shaped by L Catterton’s portfolio, which includes stakes in Boll & Branch, Etro and Birkenstock, the AP said.
Shein’s acquisition bid, meanwhile, signals how a fast-fashion leader may seek outside growth by assembling a portfolio of brands positioned as more environmentally focused. Saunders said Shein is unlikely to fully retool Everlane’s supply network, but he added that being associated with the Shein group could be “somewhat jarring” for some of Everlane’s core customers, even if the deal likely improves the retailer’s odds of survival.