Millennial Brands Struggle as Everlane Acquisition by Shein Signals Industry Shift

The acquisition of Everlane, a direct-to-consumer apparel brand known for its focus on transparency and sustainable basics, by fast-fashion conglomerate Shein has sparked industry discussion about the viability of "millennial" brands. The reported $100 million deal has raised questions about the future of companies that emerged in the 2010s, often built on direct-to-consumer models and digital-first strategies.

According to fashion editor Lauren Sherman, who reported on the Everlane deal, many brands marketed towards millennials have been struggling for years. Sherman explained on the "Today, Explained" podcast that "millennial brands" often represented aspiration and a belief that they could improve upon older business models through efficiency and a cooler aesthetic. However, she noted that few have lived up to this initial promise.

Everlane launched in the early 2010s with a core pitch centered on radical transparency. The brand committed to disclosing product manufacturing costs, profit margins, factory locations, and fabric details, appealing to a consumer base wary of traditional retail opacity. At the time, with brands like Gap waning and Amazon not yet dominant in apparel, Everlane offered what it described as "the coolest basics on the planet" with an ethical appeal.

For about a decade, this strategy resonated with consumers, positioning Everlane at the center of trends like "normcore." By 2018-2019, the company was experiencing significant growth. However, a push for faster expansion led to strategic product changes and a majority stake sale to a private equity firm, which diminished the brand's cultural relevance as competitors like Uniqlo gained ground. Additionally, a cultural shift, characterized by what Sherman described as an "anti-woke" sentiment, saw some consumers push back against brands emphasizing social consciousness.

The recent sale to Shein, a company with a reputation for an opaque supply chain and low prices, prompted significant online backlash from consumers who viewed it as a betrayal of Everlane's founding values. This event has been interpreted by some as a symbol of the decline of these aspirational direct-to-consumer brands and a broader cultural moment where long-held values seem to hold less sway.

Sherman drew parallels to the challenges faced by companies like DoorDash and Uber, where the focus is shifting from rapid growth to profitability. However, she distinguished apparel businesses, which face longer timelines for profitability and a saturated market, noting that "if you can’t make it work, you just close."

Other brands that rose to prominence alongside Everlane are also facing difficulties. Glossier, a beauty and skincare brand, has lost its footing despite having a new CEO aiming to realign its strategy. Allbirds, initially known for its sustainable wool shoes, has reportedly pivoted away from its core product. In contrast, Warby Parker is cited as a success story, attributed to finding a market monopoly in the eyewear industry and offering a necessary product responsibly.

Regarding the potential for comebacks, Sherman expressed skepticism for Everlane, giving it a "2 percent chance," and zero for Allbirds. Glossier, she suggested, might have a better chance due to a continued demand for its original product and presentation. Ultimately, Sherman anticipates a faster turnover rate for brands in the current market, emphasizing that true longevity requires achieving the scale and lasting appeal of legacy brands like Levi's or Nike.