The Everlane-Shein saga continues, and what’s driving the second acts from DTC founders

Last week, it felt like everyone on my social media feeds  – which is mostly made up of consumer startup founders and investors –  had a take on the news that Shein was acquiring Everlane. Here at Modern Retail of course, we churned out a couple of stories on the news. One looking at why the bottom seems to be falling out for so many venture-backed DTC startups this year, and another looking at what the news could mean for Shein’s marketplace ambitions. 

Then, on Tuesday night, there was another twist: Everlane founder Michael Preysman – who exited the brand many years ago – announced he was launching a new brand called “Still Radical.” The brand’s website proclaims: “Same principles, but a new take. And this time, no venture capital, no private equity.” It seems many of the details still need to be ironed out, for now, the website is just collecting emails. 

This isn’t the first time we’ve seen this act before:

• Ty Haney’s on-again, off-again relationship with Outdoor Voices Haney’s first exit from Outdoor Voices came in 2020, after a tussle with the board over their dueling visions as Outdoor Voices continued to lose money. That same year, she returned to assist the brand after serial entrepreneur Ashley Merrill bought a majority stake in the brand, and pledged to do things differently – most notably, profitably. But eventually, Haney and Merrill’s relationship soured, and some people noticed Haney taking potshots at the brand on Instagram. Outdoor Voices once again fell into financial trouble, closing all its stores and teetering on the edge of bankruptcy before Consortium Brand Partners bought it in 2024. Then, the following year, Haney returned as a partial owner, armed with a new community rewards platform she had started in her years away from Outdoor Voices, called TYB that would help the brand scale in a more profitable way. 
• Foxtrot’s resurrection While not a direct-to-consumer brand, the Everlane-Shein saga is also reminiscent of next-gen convenience store startup Foxtrot being brought back to life by one of its founders after filing for Chapter 7 bankruptcy. Foxtrot spectacularly imploded, closing all of its stores in one day in 2024, after its current board said they had exhausted all options and found no financially viable way to continue operating the brand. Co-founder Michael LaVitola, with financial backing, bought the assets of Foxtrot in the bankruptcy sale and relaunched the brand. I spoke with LaVitola in 2024, shortly after he bought the assets and so much of what is so similar to what Preysman has been saying in interviews – he hadn’t been involved in day-to-day operations in over a year and he “just couldn’t sit on the sidelines” as the beloved brand he built died. 

Even before Preysman’s announcement on Tuesday that he wanted to take another stab at building a similar brand, one of my biggest takeaways from the Everlane-Shein saga was how it brought many current and former founders out of the woodwork to talk about what they wish people knew about the exit process. It seems like anytime a once-hot brand seemingly “sells out” or exits for a presumably lackluster amount, it dredges up a lot of complicated feelings for founders, and also sometimes investors. A few examples that came to mind:

• Helena Price, formerly the founder of aperitif brand Haus, published a Substack about “The Myth of the Sale” She noted that “the decision doesn’t appear to have been made by anyone you’d recognize as a founder,” but rather by a board driven by the need to clear the brand’s debt. [Preysman has said that he hasn’t been involved with daily operations for years, and found out about the Shein sale just minutes before the news broke]. 
• Investor Manica Blain had a Substack about “The Stories We Tell at the End.”It wasn’t entirely inspired by the Everlane saga, but rather about the recent exit of one unnamed brand being supposedly framed as a success, and another founder challenging that narrative.

As I was reporting out a story on why so many of these venture-backed DTC brands seem to be dying this year in particular (the Allbirds sale also comes to mind), there was one detail I’m still thinking about that didn’t make it into my final story. I asked Fan Bi, who operates turnaround firm the Hedgehog Company, what types of companies are getting funding right now.

He said he is seeing a lot of second acts from founders – not just founders who are returning to the brands they built, like Haney or LaVitola, but founders who are building something new as they are determined to prove they can course correct from the mistakes they have made in the past. 

• Mars Men, a supplement brand, recently raised a $27.5 million Series A from L Catterton. The company says it has surpassed a $100 million run rate in just under 18 months. One of the founders of Mars is Benjamin Smith, who previously started a men’s skincare brand called Disco that filed for bankruptcy in 2023. 
• Ryan Babenzien, co-founder of sneaker brand Greats, got back into the startup business in 2021 with a filtered showerhead brand called Jolie. Babenzien has been public about the fact that he started Jolie because he wanted to get into a category that had opposite dynamics compared to sneakers. Footwear historically has a high return rate, he wanted to sell a product had low return rates. He also wanted something that wasn’t as fashion-and-trend driven, but fit more easily into people’s daily lives. 
• A bunch of apparel founders have now launched CPG brands. Again, it seems like there’s something about founders wanting to free themselves of the confines of the fashion cycle. Preysman himself launched a new startup a couple of years ago called Magna, which sells magnesium electrolyte packages, while Michelle Grant, previously of lingerie brand Lively, launched an energy drink brand called Gorgie. And Haney also launched an energy drink brand called Joggy in 2022. 

But Bi had a great point as to why we are seeing so many second acts from founders – Shopify has only been around since 2006. A lot of the people who built the first round of what are traditionally thought of as “DTC brands” – Shopify-native brands that built their audiences through cheap social media advertising – had no experience in retail prior to launching their brands. Now, they are determined to prove they have learned from their past mistakes. 

“Fifteen, sixteen, seventeen years into the Shopify ecosystem, you have way more experienced, seasoned founders and operators who are now building businesses and are dialed in,” he said.

We’ll see how successful they are.