Fast-fashion giant Shein is set to acquire sustainable clothing brand Everlane in a surprise deal that brings together two companies with very different business models.
Everlane CEO Alfred Chang confirmed the acquisition in a letter to employees obtained by The Associated Press on Friday.
San Francisco-based Everlane did not disclose the financial details of the deal, while Shein declined to comment publicly.
Everlane was founded in 2011 by Michael Preysman and Jesse Farmer with a focus on affordable, environmentally friendly and ethically sourced clothing. The company became known for promoting transparency about factory conditions, worker pay and environmental impact.
The brand opened its first physical store in 2017 and gained popularity among shoppers looking for sustainable fashion alternatives.
However, the company later faced criticism over worker treatment and struggled to maintain strong sales as consumers increasingly looked for cheaper clothing options.
Retail analyst Bruce Winder said many eco-friendly brands, including Allbirds, found it difficult to keep consumer interest over time as affordability became a bigger concern for shoppers.
Investment firm L Catterton became Everlane’s majority owner in 2020. The firm also has stakes in brands including Birkenstock and Etro.
Meanwhile, Shein has grown rapidly since its founding in 2012 by selling low-cost trendy fashion popular with teenagers and young consumers. Most of its products are manufactured through a large network of factories in China, though the company later moved its headquarters to Singapore.
In his letter to staff, Chang said the partnership would give Everlane greater financial stability and allow it to continue operating independently while investing more in products, innovation and employees.
He stressed that Everlane would continue its commitment to sustainability and ethical standards, adding that the company’s leadership team would remain unchanged.
Industry experts say the deal comes at a difficult time for Everlane, which has reportedly faced falling sales and growing debt.
Retail analyst Neil Saunders said the acquisition could help Everlane survive financially, while also giving Shein an opportunity to expand beyond traditional fast fashion.
Saunders noted that new tariffs and trade restrictions under US President Donald Trump have created challenges for fast-fashion imports in the United States.
Analysts, however, say the partnership may confuse some loyal Everlane customers because of Shein’s reputation for mass-produced low-cost fashion.
“Ultimately, the deal likely saves Everlane, but that salvation comes at a price,” Saunders said.
Chang also acknowledged criticism surrounding the deal, saying recent media attention and social media reactions had been difficult for the company and its employees.