By Bill Peters
Everlane is reportedly being sold to Shein. Depop was sold at a markdown. Allbirds is now an AI company. What's going on in sustainable fashion?
A sign hangs on the front door of a shuttered Allbirds store on April 2 in Chicago.
Millennial-era retail was supposed to have principles. Over the past decade, brands emphasizing quality, sustainability and ethical production were rewarded with legions of shoppers and sky-high valuations. Now, those same companies are struggling to survive in an era where consumers are becoming laser-focused on one shopping metric - price.
The latest evidence of this trend: Everlane - an online clothing retailer whose website's sustainability section says its ideals were &#34;built in opposition to the fast-fashion model&#34; - is reportedly being sold in a $100 million deal to the ultimate fast-fashion brand, Shein, the news site Puck reported Sunday. That $100 million price tag would be a steep discount to Everlane's valuation of $550 million in 2020, according to The Information.
Everlane's reported sale comes after brands catering to younger consumers trying to shop their values, including Allbirds and Depop, have struggled or been sold at a markdown. Along with growing price-consciousness, particularly among younger consumers, faster fashion cycles driven by social media and cheaper manufacturing have made competition tougher for brands paying more to keep their clothing more sustainable.
For many millennial shoppers, Everlane in particular represented the first time a brand had told them how much a T-shirt cost to make and where it was made, said Disney Petit, the founder and CEO of LiquiDonate, a San Francisco-based company whose software matches retailers' excess inventory and unsellable returned products with nearby nonprofits and schools that need them
That's a stark contrast with Shein, which has been accused of overworking and underpaying its workers, and of being a massive industry polluter. The online retailer has disputed those claims, and has said it is investing in improvements
&#34;Watching them get acquired by Shein isn't just a business story, it feels like a generational story, because we were promised that millennial retail could be different,&#34; Petit said of the news about Everlane. &#34;But it just got bought by a brand that has proven that things haven't changed very much.&#34;
Founded in 2011, Everlane publishes some details about the factories it uses, as well as its audit standards. The company has emphasized its commitments to use recycled and renewable materials, and its efforts to resell clothing in an industry where more than 80% of used clothing gets incinerated or sent to a landfill, according to government data. Those kinds of efforts can be costly, pushing up prices for consumers.
Everlane declined to comment on the Puck report. The company also declined to answer questions about how its production and sourcing might change.
Shein did not respond to a request for comment. Neither did the investment firm L Catterton, Everlane's majority owner, which Puck reported participated in the sale.
Ideals may not be enough to keep retailers afloat
Everlane was reportedly struggling before the acquisition, indicating that catering to shoppers' principles alone wasn't enough.
Puck reported that Everlane's CEO had been seeking an investor to help it deal with roughly $90 million in debt. That report also noted that competition from companies like Amazon (AMZN) and Fast Retailing's (JP:9983) Uniqlo made business more difficult for Everlane, which some observers said once aspired to be a higher-minded version of the Gap (GAP).
Sheng Lu, a fashion and apparel-studies professor at the University of Delaware, said that the costs of adhering to a more environmentally friendly approach to business can add up. Organic materials can be more expensive than polyester. And there are expenses related to collecting and verifying data related to a company's environmental impact.
Lu said the deal could help Shein shore up revenue, as it deals with tougher regulatory scrutiny and the U.S.-led trade war. Shein also lost market share in the U.S. last year, he said. According to eMarketer, Shein's U.S. e-commerce sales rose 5% last year, lagging the 6.2% growth for the broader online retail industry.
Shein could be seeking to elevate its credibility in possibly pursuing Everlane, eMarketer analyst Zak Stambor wrote in a post on Monday. But he said Everlane's customers were unlikely to ignore Shein's reputation - or the gap between Everlane's sourcing standards and the criticisms made against Shein.
&#34;That disconnect risks making the acquisition feel less like brand expansion and more like an effort to polish Shein's image,&#34; he said.
Shein has kept prices low through cheap, outsourced labor and by opting not to build retail stores. Customers have kept buying, as they choose low prices over any ethical concerns.
But even clothing shoppers who value sustainability aren't totally consistent with their standards.
Petit said that younger consumers do care about sustainability. But she noted the buying patterns of shoppers overall can vary: They might pay $150 for ethically-sourced gear from Everlane, but in the same week also spend $50 for items on Shein.
A sale and a pivot to AI
That dynamic may partly account for why other high-minded millennial businesses haven't fared well.
In March, Allbirds (BIRD) said it had agreed to sell its intellectual property and other assets to fashion-brand manager American Exchange Group for $39 million and would seek approval to wind down. Overexpansion, competition and tech-bro cliches ultimately sank the sustainable sneaker-maker, which prided itself on footwear made from tree fiber and crab shells and once had a market cap of $4.1 billion.
Last month, Allbirds announced it was making a pivot to AI.
Earlier this year, Etsy (ETSY) said it would sell online secondhand-clothing site Depop to eBay (EBAY) for roughly $1.2 billion, in an effort to focus more on its core business. That also represented a markdown from the $1.6 billion Etsy paid for Depop in 2021.
Lu also said fast-fashion's advantages came down to an uneven playing field and insufficient action from policymakers to encourage better behavior.
&#34;If they're cheap because they do not treat their workers decently enough, or they're cheap because they use really low-quality, low-cost materials without considering the environmental and social impact of their products, that is not a fair game,&#34; he said.
Still, Lu said he doesn't believe sustainable businesses - and a more conscientious consumerism - are dead. One reason why? The disappointment in his students on the news that Everlane was being sold to Shein, he said.
&#34;Their expressed concern gives me some confidence,&#34; he said.
-Bill Peters
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05-19-26 1541ET

BIRD

Everlane, a sustainable fashion brand, is reportedly being sold to fast-fashion giant Shein for $100 million, a significant drop from its 2020 valuation of $550 million. This reflects a shift in consumer priorities towards lower prices over sustainability. Other brands like Allbirds and Depop have also struggled, highlighting the challenges faced by companies emphasizing ethical production in a price-sensitive market. Experts suggest that Everlane's acquisition may not improve Shein's image, as consumers remain wary of its labor practices.

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Millennial-era retail was supposed to have principles. But lower prices have won out.