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US launches national security review of Shein’s Everlane purchase
The Cfius review began after Shein completed an $80 million deal in May, and it is focused on potential national security issues tied to Americans’ personal data.
US authorities are conducting a national security review of Shein Global Holdings’ acquisition of American clothing retailer Everlane, a move that adds another regulatory hurdle for the China-founded fast-fashion company in one of its key markets, according to SCMP Economy. The review is being handled by the Committee on Foreign Investment in the US (Cfius), an inter-agency panel led by the Treasury Department. SCMP Economy reports that the Cfius process started after the $80 million transaction was completed in May, after Shein voluntarily initiated the review, which is unusual because companies typically seek clearance before deals close. SCMP Economy notes that Cfius reviews are confidential and that the panel has the power to block transactions, unwind them, or impose conditions if it determines they could threaten US national security. A Shein spokesperson said the company is committed to complying with applicable laws and regulations in the markets where it operates, while the Treasury did not respond to a request for comment. The report adds that the Cfius review centers on potential national security issues related to Everlane handling Americans’ personal data, and it remains unclear what the outcome will be. SCMP Economy also says Shein still maintains substantial operations in China despite shifting its headquarters to Singapore, and that the company needed approval from Chinese regulators to pursue its initial public offering in Hong Kong.