Two sustainable apparel brands changed hands in 2026 for a combined ~$139 million — Allbirds sold its intellectual property and assets to American Exchange Group for $39 million, and Shein acquired Everlane for a reported $100 million. Those transactions framed the question at Sourcing Journal's annual Fall Summit on Tuesday: is fashion's growth-dependent model itself the failure point for sustainability?

Dana Davis, founder of Dana Davis Consulting and a veteran of more than 15 years at circular fashion label Mara Hoffman before it shuttered in 2024, flipped the usual framing during a panel moderated by Sourcing Journal climate and labor editor Jasmin Malik Chua.

"Can capitalism survive sustainability?" Davis countered. "Can the systems that we are operating in be maintained when climate change comes knocking? That doesn't seem to be the case to me."

What went wrong with material substitution?

Davis argued the industry's two-decade-old sustainability playbook — swapping conventional polyester for recycled polyester and similar material substitutions — delivered real progress but never questioned the commercial system receiving those materials.

"The piece that we keep missing is when we were looking at these substitutions, we were putting them into a business model that ultimately has been failing, and I know that that's a really hard conversation to have," Davis said.

She noted the conversation has broadened, with suppliers now part of it: "We're having more of those real conversations now than we ever were."

Mara Hoffman's 2024 closure illustrates the financing problem for privately held brands producing responsibly. Davis said the label never took outside investment, effectively financing the products on its shelves while paying suppliers fairly. The pandemic briefly opened space to rethink wholesale calendars and forecasting, but those changes collapsed as companies moved into survival mode. When the brand closed, selling was an option — but it risked losing control of the name.

Davis recalled founder Hoffman telling her: "It's so hard to birth something new while you're simultaneously dying."

How are brands embedding durability into merchandising?

Leah Hollinder, senior director of merchandising and planning at Fjällräven North America, said the outdoor brand treats durability, repairability and responsible materials as merchandising decisions, not a standalone initiative that gets cut in downturns.

About 80 percent of Fjällräven's apparel line consists of carryover products. The Kånken backpack nears its 50th anniversary; the Greenland jacket approaches 60 years on market. The company has added care-and-repair and pre-loved businesses to extend product life.

"We're not advocating for selling less units, but a different kind of growth," Hollinder said. "One that comes from creating long-term customer value, and bringing mindful resources and thinking of the people who make our products as well."

Does ownership structure change the equation?

Elizabeth Richmond, general counsel at Eileen Fisher, said the company's new purpose statement — "design for the regeneration of people and planet" — marks a shift from mitigating footprint to actively giving back.

Eileen Fisher is owned by its founder and an employee stock ownership plan, giving it a longer horizon than public-market peers. "I do think that we should acknowledge that we're asking a business model here to solve a whole host of problems that are much bigger than the business model," Richmond said, calling capitalism "a system that we design." Companies, she argued, need not treat shareholder return as their only obligation.

The panel also examined Reformation's recent IPO as a test of whether sustainable fashion can scale. Davis cited its small production runs, market testing, customer data, technology and narrow material portfolio as the operational discipline behind the combination — while flagging the growth expectations that public capital carries.

"Capital doesn't equal bad," Davis said. "I think the thing that we have to remember is the growth expectations that are tied to that capital is when it gets tricky."

For sourcing teams, the summit's signal is direct: sustainability programs built as parallel initiatives — rather than embedded in carryover assortments, supplier payment terms and financing structure — remain the first line items cut when margins tighten.