L Catterton has sold Everlane, the US apparel brand it majority-owned, to Chinese e-commerce group Shein at a valuation of approximately $100m, according to reports by Puck and The Information.
The transaction marks a steep discount to the valuations Everlane commanded during the height of the direct-to-consumer e-commerce boom and underscores the brutal reset that has taken place across the once-celebrated cohort of digitally-native consumer brands.
The company’s board approved the deal on Saturday, according to Puck citing a person with knowledge of the matter. A note sent to shareholders on Sunday morning indicated that holders of common stock would not receive a payout, leaving open the question of whether any cash will change hands or whether preferred shareholders will receive cash or Shein equity.
For L Catterton, which counts LVMH and the Arnault family among its anchors, the exit closes one of the more visible direct-to-consumer chapters in its consumer portfolio at a markdown that few sponsors would have anticipated at the position’s peak.
Everlane, founded around a “quiet luxury” minimalist aesthetic and a transparency-led pricing narrative, was for years held up as a model for how a digitally-native brand could build durable consumer equity outside the traditional wholesale channel. The pricing of the Shein transaction makes clear that the exit value bears little relationship to the brand’s earlier marks, and reflects the difficulty of unwinding direct-to-consumer positions in a category where unit economics have deteriorated meaningfully since the post-pandemic peak.
Allbirds, another once high-flying retail startup, unveiled a new business plan only days before it was set to shut down. Companies that thrived during the online shopping boom have struggled to sustain growth as consumer demand cooled and as the cost of customer acquisition climbed materially. Everlane had attempted to stage a turnaround amid mounting debt, according to The Information, but the gap between the operational reality and the equity story embedded in earlier funding rounds proved difficult to close.
The Chinese e-commerce platform has been actively diversifying its commercial footprint as US tariff pressure has intensified on its core ultra-fast-fashion model. Last year, the company began offering other fashion brands access to its apparel manufacturing network in China as a service, Bloomberg reported in September.
Acquiring an established US brand with a recognisable consumer following, a defined aesthetic position, and existing operating infrastructure offers Shein a route into a different segment of the apparel market, and a vehicle through which to test whether its manufacturing and logistics platform can support premium-positioned product as well as its core value offering.
The brand carries a celebrity following that includes figures such as Meghan Markle, giving Shein a marketing surface that its existing brand strategy has not provided.
Originally published here.