Shein Acquires Everlane for $100 Million
Shein, the Chinese-founded ultra-fast-fashion giant, is acquiring Everlane, the San Francisco-based direct-to-consumer apparel brand, from majority owner L Catterton, according to reports in Bloomberg. The transaction values Everlane at about $100 million, far below the valuations the DTC brand commanded at the peak of the e-commerce cycle.
Key Takeaways:
- Shein's Purchase: Shein has acquired Everlane for a steep discount to its former valuation, signifying a challenging period for the direct-to-consumer (DTC) fashion industry.
- Financial Details: Common stockholders will not receive a payout from the deal. The transaction involves debt, indicating L Catterton's private equity firm's financial struggles.
- Everlane's History: Founded in 2011 on a principle of "radical transparency," Everlane published detailed cost breakdowns for its garments. It reached a $250 million-plus valuation and projected revenues of nearly $550 million by 2025.
- Recent Challenges: The DTC boom faded, leading to rising customer acquisition costs and flat growth. Andrea O'Donnell attempted to reposition Everlane toward "accessible fashion," but revenue goals weren't met.
- Shein's Profile: Known for algorithmic merchandising, micro-batch production, and ultra-low prices, Shein faces regulatory challenges in Europe. Despite these hurdles, the company has doubled profits to over $2 billion and is aiming for a public listing.
This acquisition brings Everlane under Shein's ownership, offering the latter a US-brand identity lacking on its core platform.