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Shein, which has been called the world's biggest fast fashion polluter is reportedly acquiring Everlane, a darling in sustainable circles. (Photo by Julie SEBADELHA / AFP) (Photo by JULIE SEBADELHA/AFP via Getty Images)
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A gut punch, is how Disney Petit described feeling when she heard that fast fashion giant Shein was reportedly acquiring Everlane, known for sustainability and transparency, for $100 million. The CEO of LiquiDonate, which offers liquidation and donation solutions, said, “There’s opportunity on the table. Shein has the infrastructure, the capital and now they have a brand. It’s just difficult to believe that it’s going to materialize sooner rather than later. Their entire supply chain is very destructive.”
The two cultures couldn’t be more different. It’s an extreme case of strange bedfellows, mismatched brands and clashing ethoses.
Shein’s potential acquisition of Everlane was first reported by Puck News, and is said to have been approved by the board of L Catterton, the majority owner of Everlane, whose members include LVMH Moët Hennessy Louis Vuitton chairman and CEO Bernard Arnault and his family.
Shein is considered one of, if not the most, polluting fashion brands in the world. It emitted 16.7 million metric tons of C02 in 2023 and Shein’s emissions went up in 2024. Scope 3 emissions are up 170% over the past two years, according to Earth.org. The Chinese brand has the lowest possible rating on commitments, renewals advocacy and clean shipping, and a D-minus in materials and circularity. Yale University has called Shein “the biggest polluter in fast fashion.”
Nonetheless, last year Shein started offering other fashion brands access to its apparel manufacturing network in China as a service, Bloomberg reported. The fast fashion behemoth had been seeking new revenue streams as U.S. tariffs have increased pressure on its core business. In 2022 Shein was valued at $100 billion and in 2023 that fell to $66 billion.
With the AI boom making it difficult for startups to maintain margins and venture capital funding, consolidation is moving across multiple industries, including fashion. It’s a foregone conclusion to envision Shein, as big as it is, continuing to acquire its competitors. Shein is the biggest fast fashion brand in the U.S. with a 50% market share. Zara is the second biggest with a 13% market share, according to Uniform Market.
“Shein’s prior moves around Forever 21 and Missguided, along with reported interest in Topshop, suggest it is looking to add recognizable Western brands and move beyond being seen purely as an ultra-fast-fashion platform,” said Ishan Majumdar, founder of Baptista Research.
Everlane represents the other side of the sustainability spectrum. As of 2024, nearly every Tier one factory producing apparel for Everlane, holds multiple sustainability certificates, including those for various recycled and organic materials and for the Better Cotton Initiative as well as social compliance audits. Several factories even reported their progress toward achieving a living wage. That level of transparency stands in sharp contrast to many of the criticisms Shein has faced regarding labor practices and supply chain transparency, said Sheng Lu, Ph.D, Professor and Director of Graduate Studies, Department of Fashion and Apparel Studies, University of Delaware.
But Everlane has financial difficulties. The apparent offer by Shein of $100 million is a clear renunciation of its peak valuation from L Catterton of $550 million in 2020. “It’s an 82% valuation drop, which is absurd,” said Petit. “If you look at the revenue for 2023, it was $200 million. In early 2026 it was $170 million.”
There’s a few reasons Everlane started to lose steam. A union-busting episode turned off loyal consumers when it became known that Everlane hired part time remote customer service workers who were trying to organize. Everlane laid off 42 of the 57 members after they asked for voluntary recognition. Even Bernie Sanders publically called the incident union busting.
“For people who are interested in transparency and sustainability and all of the ethos that goes along with that I think that was the first big problem with Everlane,” Petit said. “Also, because of the high prices we’ve been experiencing for years, consumers don’t have the disposable income to spend on things even if they aspire to be more ethical consumers.”
Recent data shows that while overall U.S. consumer spending has remained relatively strong, a drop in income or perceived income strain is influencing spending patterns. Consumers perceive that prices have risen faster than their incomes. This is a key driver of low consumer sentiment, which remains below pandemic‑level highs and on par with the Great Recession era, according to the Federal Reserve Board.
“I don’t blame consumers for wanting to buy cheap, affordable, stylish clothes because things are so expensive,” said Petit. “It’s important for people to feel good about what they’re wearing. My hope is that consumers continue to shop at Goodwill and Poshmark and similar platforms and use products that are in circulation versus supporting companies like Shein that are making net new products.”
Shein is likely to produce Everlane products in its factories and the credibility of the brand will suffer because Everlane’s supplier list won’t be current. The factories it used were audited and named, so if they’re quietly being swapped for Shein factories it will erode the brand’s reputation. And what will happen to the cost breakdown where Everylane publishes material, labor and transport costs alongside its retail prices.
Unlike Shein which relies heavily on sourcing finished products from China, approximately 70% of Everlane’s contracted garment factories are in Vietnam.
“With Everlane, people are going to buy a $45 shirt and realize it’s $4 quality," Petit said. "Everlane will continue to lose money over time.”
Shein released a sustainability report and is talking about making its supply chain more circular, but that seems unlikely.
“Everlane gives Shein a shortcut to legitimacy and entre to a segment beyond fast fashion,” said Lu. “That’s important now that growth is harder in the low-price space, especially as there are a lot of obstacles to trading in the U.S. from tariffs. Everlane is not revolutionary for Shein, but it does support a narrative of having a more balanced portfolio, which could be helpful for any future IPO.”
The deal raises questions about whether sustainability is dead in terms of positioning for a brand. “Sustainable started being a moat once everyone started claiming it,” Petit said. “In 2022 every mid-tier brand had an impact report. What was defensible was the operational discipline, the unglamorous part. They were continting to procure the reporting and the scale and accuracy people were looking for.”
“On consumer behavior, ethical consumption still matters, but value, convenience, and price appear to be carrying more weight in the current environment,” said Majumdar. “For Everlane, margin improvement is important, but if the deal weakens the trust behind the brand, the operational upside could come at a real reputational cost.”
Sustainability promised to change the industry, but its victims are littered across the fashion landscape. Bay Area-based Allbirds, an0ther vaunted sustainable fashion brand, sold off its assets to American Exchange Group in April for $39 million, down from a $4 billion valuation in 2021. The publicly-traded company quickly said it was shifting to AI.
With Shein reportedly acquiring Everlane, and Allbirds moving from eco footwear to AI, it seems that the promise of sustainability was mostly hype. Other global brands generating negative headlines include Lululemon, which is being investigated by the Texas Attorney General for the potential presence of “Forever Chemicals” in its activewear.
Quince is a notable exception to the declining brands. It raised $500 million at a $10 billion valuation. Some believe Shein should look at Quince as a model for Everlane and transition its new acquisition into its own version of Quince, an online-only retailer that touts “affordable luxury” apparel, home goods and accessories, much like Everlane’s own “elevated basics.”
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