Shein’s Everlane Acquisition Under U.S. National Security Scrutiny

US authorities have launched a national security review of Shein Global Holdings’ acquisition of American clothing retailer Everlane, marking another regulatory challenge for the China-founded fast-fashion giant in a key market.

The review by the Committee on Foreign Investment in the US (Cfius), an inter-agency panel led by the Treasury Department, began after the $80 million transaction was completed in May, according to sources familiar with the matter who requested anonymity when discussing private deliberations.

Shein voluntarily initiated the review at that time, which is unusual as companies typically seek Cfius approval before a transaction closes, the sources said. While Cfius clearance generally prevents future challenges, the body also has the authority to block, unwind, or impose conditions on transactions it determines threaten US national security.

A Shein spokesperson stated the company is “committed to complying with all applicable laws and regulations in the markets where we operate.” The Treasury Department did not respond to a request for comment. Cfius reviews are confidential.

Shein maintains substantial operations in China even after relocating its headquarters to Singapore several years ago. The company remains subject to Chinese regulators, whose approval it needed to pursue its long-awaited initial public offering launched on Monday in Hong Kong. Meanwhile, the US continues to rank among Shein’s top markets for sales.

The Cfius review is examining potential national security risks associated with Shein’s acquisition of a company that handles Americans’ personal data, and the outcome remains uncertain, according to one of the sources familiar with the situation.

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