Ultra-fast fashion giant Shein will acquire a majority stake in US clothing brand Everlane, Vogue Business reports. Earlier this month it was announced that the sustainable fashion brand was to be acquired by Shein. However, both companies had not yet confirmed the agreement. However, the industry magazine has seen an email from Everlane to the company’s employees.
Shein is acquiring the stake from LVMH-backed venture capitalist L Catterton for an undisclosed amount. The transaction is still subject to regulatory approval.
The sale follows intensive behind-the-scenes due diligence. The US investment company L Catterton has been looking for an investor since March to reduce a debt burden of around $90 million accumulated by Everlane. This debt includes a $25 million loan from investment firm Gordon Brothers and a $65 million asset-backed revolving credit facility.
Independent course and operational changes
Everlane employees were officially informed of the acquisition on Friday morning, according to Vogue Business. In a note to employees, Everlane Chief Executive Officer (CEO) Alfred Chang addressed the moral conflict that the change in ownership could trigger among employees. Chang emphasized that the company will maintain its own identity and values under the Shein flag.
“I want to be clear: Everlane will remain Everlane. I will remain in place as CEO, our management team will remain in place, and we will continue to operate independently while maintaining our design standards, brand philosophy and values,” Chang said.
Chang said the partnership with Shein provides necessary stability and resources in a rapidly changing retail landscape. It allows the US brand to invest in product innovation and reach a larger international audience without compromising on quality.
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