Shein Acquires Everlane: The Real Time Collapse of "Ethical" Fashion's Poster Child

In a deal announced this week, ultra-fast fashion giant Shein has acquired Everlane for approximately $100 million. The purchase, which gives Shein a majority stake from private equity firm L Catterton (full disclosure, I once worked for L Catterton as a board member of Sweaty Betty), marks a stunning reversal for the once San Francisco-based brand that was celebrated as a beacon of ethical manufacturing and “radical transparency.” Everlane’s finances had faltered amid slumping sales and heavy debt, making the sale a pragmatic but symbolically loaded exit.

I mean do you have values or don’t you? If you have values you stick to them when it’s hard. Otherwise they’re just platitudes and marketing pablum.

Everlane was founded in 2010 (launched publicly in 2011) by Michael Preysman in San Francisco. The company positioned itself as a direct-to-consumer disruptor in the apparel industry, offering high-quality basics like t-shirts, jeans and sweaters. Its core promise was “radical transparency”: revealing the true production costs of each item — materials, labor, transportation and markup — alongside details about its partner factories.

This is on their website right now.

And so is this:

I mean is this a joke? Here’s a graphic from The New York Times recent article on the Shein acquisition:

Everlane built their brand and business claiming to work only with ethical manufacturers (they still claim it, just look at their website) that met high standards for wages, working conditions and environmental practices. This model resonated deeply with millennial consumers weary of opaque fast fashion and luxury markups.

The brand’s success triggered a panic across the apparel sector. Suddenly, “transparency” became the buzzword du jour. Legacy brands and new entrants scrambled to publish factory lists, carbon footprints and cost breakdowns.

It was a constant topic of conversation in our Levi’s executive meetings. Everlane is making an impact! All consumers are going to expect this now! How can we get this done, now faster now now now!

(Note: as a $6B business Levi’s had and has a relatively complicated supply chain. Publishing this stuff was going to be a Herculean task which wasn’t fully achieved. That said, one of the reasons I was always proud to work at Levi’s was their terms of engagement — TOE — with factories and suppliers. The brand was a leader since 1991 when it first established its TOE, given the expanding manufacturing base.)

Back to Everlane — I mean it was a full-blown oh shit, how do we do this moment when Everlane’s message began to break through with consumers. Everlane was meant to change the entire industry. And other brands believed their hype.

Everlane didn’t just sell clothes; it sold a conscience. It occupied a lucrative “white space” in the market: affordable “conscious” luxury that allowed shoppers to feel virtuous without paying designer prices. Competitors rushed to mimic the formula, fearing they would be left behind in the shift toward ethical consumerism.

Yet this week’s acquisition by Shein lays bare the hollowness of that positioning. Shein, the Chinese retail behemoth known for $2 t-shirts and $5 leggings that feel like paper, has been repeatedly flagged for egregious environmental and labor practices.

A Yale Climate Connections analysis described Shein as the biggest polluter in fast fashion, with emissions nearly doubling in 2023 to 16.7 million metric tons of CO2 —more than several coal plants combined. Investigations have highlighted excessive microplastic pollution from its polyester-heavy production, massive textile waste, and supply chain links to forced labor concerns, particularly in Xinjiang.

In fact, the fast fashion brand has faced persistent and well-documented accusations of benefiting from forced labor, particularly involving cotton sourced from China’s Xinjiang Uyghur Autonomous Region. Bloomberg investigations in 2022 used laboratory testing on Shein garments shipped to the U.S. and confirmed the presence of Xinjiang cotton, a region where the U.S. government and human rights organizations have documented widespread forced labor programs targeting Uyghur Muslims as part of a broader repression campaign. Bipartisan U.S. lawmakers have repeatedly called for investigations, citing credible evidence of supply chain links to these abuses and urged the SEC to block any potential IPO until independent verification confirms no forced labor involvement.

Shein has consistently denied relying on forced labor, claiming rigorous supplier audits and a zero-tolerance policy. However, the company has repeatedly declined to directly confirm whether it sources cotton from China or Xinjiang in parliamentary hearings (including in the UK), leading to accusations of “willful ignorance.” Its heavy reliance on the U.S. de minimis rule — shipping millions of low-value packages daily with minimal customs scrutiny — has further raised concerns that it circumvents proper oversight of the Uyghur Forced Labor Prevention Act.

These issues compound broader labor criticisms, including supplier factories with excessive overtime (often 75-hour weeks), low wages and isolated cases of child labor that Shein itself has disclosed in its sustainability reports.

By selling to Shein, Everlane has demonstrated that its ethical commitments were flexible at best. In reality, it seems Everlane’s “ethically made” approach was merely a marketing strategy with no real commitment behind it.

You cannot credibly champion “ethical factories” while handing the keys to a company operating at the opposite extreme of scale, speed and oversight.

This is woke capitalism in its most blatant form: a marketing narrative built on virtue signals, not durable operational reality or commitment to doing what is right. When economic pressure hit, the lofty principles evaporated.

Not every brand operates this way. Some put their money where their mouth is through genuine, difficult work.

American Giant manufactures entirely in the United States, rebuilding domestic supply chains by partnering with factories in North Carolina and elsewhere to produce everything from hoodies to tees with American labor and materials.

Origin USA takes a similar approach, emphasizing traceable, stateside production to revive American manufacturing.

These companies accept higher costs and logistical challenges because they believe in the mission. I know the founders from both of these companies. Bayard Winthrop launched American Giant in 2012 in San Francisco and I’ve known him since the start. His commitment is infectious. I only met Pete Roberts — the founder of Origin USA — in the last few years, and he’s been a huge help to me in helping figure out how to manufacture in America without building my own factory and with diminished capacities here at home. Both of these guys have taken the harder right over the easier wrong. I respect them both tremendously.

My own brand, XX-XY Athletics, doesn’t manufacture everything in the U.S. yet (though most of our accessories are made domestically, with more coming), but we deliver on our values where it matters most.

We stand unequivocally for women’s sports, fair competition and the protection of female athletes. We’ve signed over 500 NIL athletes, providing compensation and community when they take principled stands for fair competition. We support nonprofits like ICONS WOMEN on the front lines of this fight. Our Courage Wins Award offers financial rewards to brave women who speak up, aiming to offset the real costs of cancellation. This isn’t marketing fluff — it’s tangible support for biological reality and fairness. And when the going gets tough — when we get kicked off of social media platforms — we don’t back down. We don’t alter our message. We stick with the hard truth that men can never be women and that women must have their own sports for competition to be fair.

And when it comes to ethical manufacturing, we visit every place our products are made. I feel confident our products are made ethically to the highest quality standards. It is our aim to produce at least 50% of our collection in the U.S. It’s been a challenge with so few facilities and diminished capacity in the U.S. overall. Add to that, we’re a start up and can struggle to meet the minimums.

The bigger brands oust us to claim a Made in the USA label on a tiny fraction of their products, while also manufacturing largely in China and now demanding the government pay them back on tariffs. I mean talk about wanting it both ways. Ahem, Nike I’m looking at you. Nike raised retail prices to offset tariff increases — so they passed that cost on to the customer — and now they want their money back from the government but certainly won’t offer any back to the consumers who paid more.

Everlane’s story ends as a cautionary tale. It built an empire on the promise of ethical manufacturing, sparking an industry-wide transparency arms race. But in the end, it was mostly branding — a clever exploitation of consumer guilt and aspirational ethics.

Selling to Shein proves the positioning was largely a sham: performative activism posing as progress. In the harsh light of this acquisition, the “radical” part looks more like rhetoric, and it certainly isn’t revolution — as promised by the brand in its heady heyday.

Brands will lie to your face to get your money. But it doesn’t have to be this way. Consumers deserve better than feel-good facades. Look beneath the surface and you might find a few good brands out there that actually do what they say they do.

At XX-XY Athletics we aren’t perfect. We’ll make mistakes, I have no doubt. But we aren’t going to lie to your face. I promise you that.