Chinese fashion retailer Shein is set to take over US direct-to-consumer label Everlane in a transaction worth around $100m, following board approval, Puck News reported, citing unnamed sources.

The deal brings to a close a prolonged period of financial strain for Everlane, which had accumulated $90m in liabilities, comprising a $25m loan from Gordon Brothers and a $65m asset-based revolving credit facility.

Private equity company and majority shareholder L Catterton and Everlane chief executive Alfred Chang had been exploring external investment options to address the debt burden, with L Catterton reportedly willing to accept either a co-investor or a complete buyout.

According to the report, Shein opted for full ownership.

A note to shareholders cited by Puck News confirmed that holders of common stock will receive nothing from the transaction.

The report did not disclose whether the deal involves a cash transfer, nor whether preferred shareholders will receive cash or Shein equity.

Everlane was established in the early 2010s around a brand identity rooted in sustainability and what it described as “radical transparency” on pricing and supply chain practices.

It gained an early audience as a more affordable option within the apparel market, positioning itself as a contemporary basics brand.

L Catterton acquired a minority stake in late 2020, a move that coincided with the departure of founder Michael Preysman and marketing lead Alexandra Spunt.

Attempts to move the brand upmarket - targeting the space occupied by labels such as Theory and Frankie Shop - did not succeed, and the brand came under growing competitive pressure.

The purchase represents a striking turn for a label whose founding principles sit in direct contrast to Shein's business model.

Retail Insight Network has approached Everlane and L Catterton for comment.