Shein buys Everlane at $100M, and the radical-transparency brand becomes a fast-fashion asset

Shein is acquiring Everlane, a San Francisco direct-to-consumer apparel brand, from majority owner L Catterton. The transaction values Everlane at about $100m, far below peak direct-to-consumer valuations. Everlane’s board approved the deal. Common stockholders are expected to receive no payout. The deal is characterized as a debt-driven exit because L Catterton’s majority stake came with about $90m in liabilities. Everlane was founded in 2011 on a “radical transparency” thesis, publishing per-unit material, labor, duty, and transport costs alongside retail prices. The brand later grew to a $250m-plus valuation with projected revenues near $550m by 2025, but the direct-to-consumer cycle later inverted as acquisition costs rose and growth slowed.

"It grew, on independent Business of Fashion accounts, to a $250m-plus valuation and projected revenues approaching $550m by 2025. Then the DTC cycle inverted. Customer-acquisition costs rose. The growth premium that had carried the entire category began to flatten. Preysman stepped down in 2021. Andrea O'Donnell, recruited from Deckers, came in to push Everlane upmarket into 'accessible fashion'; the brand's trajectory under her tenure did not deliver"

Read at TNW | Investors-Funding