The deal values Everlane at $100 million and was approved Saturday (May 16) by the Everlane board, according to a Sunday (May 17) report by journalist-owned-and-operated news site Puck.
Everlane and its parent, investment management company L Catterton, had been in search of an investor to help settle roughly $90 million in debt, although L Catterron had also been open to an acquisition, the report said.
Neither L Catterton nor Shein responded to PYMNTS’ request for comment.
The Puck report characterized the deal as an “ironic and somewhat ignominious” one for Everlane, as the company was founded on the principles of sustainability and “radical transparency” on everything from factories to pricing.
Everlane made an early bid to become a millennial answer to Gap, but it struggled to find its place following the pandemic, the report said.
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A separate report from the Philadelphia Inquirer Monday (May 18) said Everlane was facing backlash from its fans for selling itself to Shein, which has faced repeated allegations of forced labor, design theft and lackluster environmental practices. A study by Yale called the company “the biggest polluter in fast fashion.”
Still another report from Bloomberg News pointed out that the acquisition came weeks after Allbirds, another high-profile D2C retailer, switched business plans before it was slated to shut down.
The shoe company said it would transition to a “fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider” known as NewBird AI.
The company’s shoe business was sold to American Exchange Group, “which intends to continue to build on Allbirds’ legacy,” the company said in a news release. Earlier in the year, the company said it would close the remainder of its full-price stores in the United States to concentrate on its eCommerce platform, wholesale partnerships and international distributorships.
It’s part of a larger trend among D2C companies reducing their brick-and-mortar footprint amid rising costs, PYMNTS reported in January.
