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Shein’s attempt to buy American clothing brand Everlane has landed on the desk of US national security reviewers, adding yet another regulatory headache for the China-founded company in a market it desperately wants to crack.
The review comes after Shein proactively sought approval for its roughly $100 million acquisition of Everlane, a deal announced in May 2026.
A deal born from desperation meets geopolitical friction
Everlane was not in great shape when Shein came calling. The brand, once valued at approximately $600 million, had accumulated around $90 million in liabilities. Its majority owner, private equity firm L Catterton, was looking for an exit.
For Shein, the $100 million price tag represented a bargain entry into the US market’s more upscale direct-to-consumer segment. Everlane CEO Alfred Chang framed the deal as one that would preserve the brand’s independence and its commitment to sustainability and quality.
Why Washington is paying attention
The national security review reflects a broader pattern of US scrutiny toward Chinese-linked companies operating in American markets. Shein, which was founded in China and later relocated its headquarters to Singapore, has been navigating an increasingly hostile regulatory environment in the US for years.
The company’s business model historically relied on the de minimis exemption, a trade rule that allowed packages valued under $800 to enter the US duty-free. Legislative efforts to close that loophole have been a recurring theme in Washington, directly threatening the economics that made Shein’s ultra-low prices possible.
Shein apparently decided to get ahead of the issue by voluntarily seeking approval rather than waiting for regulators to come knocking.
The bigger picture for Shein’s US strategy
The Everlane acquisition represented an alternative path to deeper US market penetration. Everlane’s customer base skews older, wealthier, and more brand-conscious than Shein’s core demographic.
For Everlane’s employees and customers, the uncertainty adds another chapter to what has been a turbulent few years. The brand’s valuation decline from roughly $600 million to a $100 million sale price already told a painful story. A prolonged regulatory review, or a collapsed deal, could leave Everlane in an even more precarious position, still carrying substantial debt without a clear path forward.
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