The Tamesis
After much speculation in the industry, the two companies have just confirmed that Shein is officially on the road to acquiring Everlane. The ultra-fast fashion giant will acquire a majority stake in Everlane from LVMH-backed private equity firm L Catterton for an undisclosed amount, pending regulatory approval.
as puck L Catterton has been seeking investors in hopes of paying off about $90 million in debt accumulated by Everlane, it was reported in March. That includes a $25 million loan from investment firm Gordon Brothers and a $65 million asset-based revolving credit line. Regarding debt, the companies said they did not comment on market speculation.
The news comes after nearly a week of intense speculation, including leaks, unconfirmed reports and hot-button claims. Behind the scenes, Shein and Everlane were busy doing their due diligence.
Everlane employees were formally notified Friday morning. In a message to employees – Recipients fashion business — Everlane CEO Alfred Chang addressed the ethical conflict many may feel about the change in ownership. “This past week has been a difficult one. Seeing our company in the media, from this perspective, is painful. It is even harder to remain silent as is standard procedure on these issues. I want you to know that I feel this pressure with you,” he wrote. “I want to be clear: Everlane is still Everlane. I will continue as CEO, our leadership team will remain in place, and we will continue to operate independently, keeping our design standards, brand philosophy and values intact. Going forward, Everlane will unlock key opportunities by improving our competitive advantage and reaching more customers around the world.”
The Everlane sale marks a key shift in the sustainable fashion movement. To many, Everlane represents the optimistic millennial ideal that consumers can shop sustainably. As it sells, it comes with a belated acknowledgment that customer behavior alone cannot drive the fashion system toward better practices; that sustainability cannot rely on ethical arguments to justify its premium; and that deeper political action is needed to raise the baseline for the industry as a whole, rather than pinning everything on a well-intentioned but under-resourced few.
Some experts say there could be benefits to this unlikely alliance. While many brands had similar practices, Shein’s emissions were soaring and it was highly stigmatized in the industry. But the company has always responded to criticism that its business model leads to overproduction through its data-driven on-demand supply chain (an ecosystem that Everlane can now plug into). If companies can align their growth expectations with absolute emissions reductions, this can improve operational efficiency and have a meaningful impact.
“Like many brands, we are facing increasing pressure in a rapidly changing retail environment. This partnership allows us to maintain our independence and provides us with the stability and resources to make a greater impact without compromising Everlane’s quality and standards,” said Chang. “This means we can invest more in our products, innovation, people and processes, ultimately delivering on our founding mission to make everything Everlane stands for more accessible.”
