The online fast-fashion powerhouse Shein is preparing to expand its retail portfolio by acquiring the American clothing brand Everlane, Bloomberg reports. According to industry reports the buyout is valued at approximately $100 mln and will see the digital giant purchase the struggling retailer directly from its majority owner L Catterton.
The terms of the acquisition suggest a difficult outcome for some existing investors. Reports from Puck News indicate that those holding common stock in Everlane will not receive any financial payout from the transaction. Furthermore it remains entirely unclear whether preferred shareholders will be compensated with cash or offered equity in Shein to make up for their investments.
This $100 mln transaction essentially sees Shein taking over Everlane from L Catterton just as the target company grapples with a reported $90 mln in debt.
The sale follows a prolonged period of financial uncertainty for the U.S.-based retailer. In March it was revealed that Everlane Chief Executive Alfred Chang and private equity firm L Catterton were actively hunting for external investment to manage this crippling financial burden.
While L Catterton was initially prepared to inject fresh capital into the business provided a co-investor could be secured, the firm remained open to a complete buyout. Ultimately a full sale to Shein proved to be the chosen exit strategy.
