Chinese fast-fashion company Shein is reportedly acquiring US apparel label Everlane from private equity investor L Catterton, as digital-first retail brands continue to grapple with slowing consumer demand.
Media reports said the transaction values Everlane at approximately USD 100 million, significantly below the valuations the company attracted during the peak years of the ecommerce boom. Puck reported that Everlane’s board approved the deal.
The report also stated that holders of common stock are unlikely to receive any payout under the transaction, according to a message sent to shareholders on Sunday. It remains unclear whether the acquisition will involve a direct cash payment or if preferred investors will receive compensation through cash or equity in Shein.
The reported acquisition comes at a time when several online-native retail brands are facing mounting operational and financial pressures after pandemic-era growth slowed sharply. Earlier this month, footwear and apparel company Allbirds introduced a fresh business strategy days before it had been expected to cease operations.
Everlane, known for its minimalist designs and “quiet luxury” branding, had reportedly been attempting to revive growth amid increasing debt obligations, according to The Information. The brand also enjoys visibility through celebrity endorsements, including from Meghan Markle.
Meanwhile, Shein has been expanding its business model beyond direct-to-consumer fashion sales. Media reported last year that the company had begun offering its China-based manufacturing and supply-chain network to external fashion labels as a service, part of efforts to diversify revenues amid growing scrutiny in the US market.
(With input from Bloomberg)
