US authorities are reviewing Shein’s acquisition of the American quiet-luxury clothing retailer Everlane after Shein sought approval for the deal, adding regulatory hurdles in one of the Chinese fast-fashion giant’s most important markets, Bloomberg reported, citing people familiar with the matter.
The review from the Committee on Foreign Investment in the United States (CFIUS) was launched after the US$80 million (HK$624 million) deal was completed in May this year, the people said.
The people noted that it was unusual for Shein to voluntarily initiate the review process at that time, as companies typically seek CFIUS approval before closing a transaction. CFIUS approval can generally help avoid future challenges, but the agency also has the authority to block, unwind, or impose conditions on deals it deems a threat to US national security.
Another person familiar with the matter said Shein filed its application with CFIUS after the deal closed because Everlane’s financial situation forced both parties to complete the transaction quickly. The application was not prompted by any government intervention or investigation.
The report said CFIUS review focuses on potential national security concerns arising from Shein's acquisition of a company that processes personal data of US citizens. The result of the review remains unclear.
A Shein spokesperson said the company is committed to complying with all applicable laws and regulations in the markets where it operates.
