Reformation’s IPO Push Bets is betting green in $200 eucalyptus pants

Fast-growing womenswear manufacturer Reformation will be the next big test of whether a sustainability brand can reach a wider audience and deliver on its environmental promises.

Founded in 2009 as a vintage boutique in Los Angeles, the company has doubled sales in the past four years, topping $300 million in revenue. Majority-owned by private equity firm Permira, Reformation touts its green credibility with deals like $200 pants made from eucalyptus trees. The company says it is profitable and is now considering an initial public offering.

“Reformation has the potential to pave the way for fashion companies,” said Hali Borenstein, CEO of Reformation. “You can be a profitable business; you can make investors money; and you can really have a conscience when you do it.”

The company declined to say when it might sell shares to the public, but said it was confident it would deliver value to stakeholders through a deal like an IPO.

However, the performance of brands focused on reducing their carbon footprint or using earth-friendly materials has been shaky. Questions remain about how big the market for environmentally conscious products can become, because while many shoppers declare concern for the environment, this often does not translate into what they buy.

Allbirds serves as a cautionary tale. The company went public in 2021 with a market value of $4 billion as its wool sneakers – considered better for the planet – gained fans and boosted annual sales above $250 million. Since then, the brand’s growth has stalled and its shares have fallen by about 90 percent.

“Countless people have encouraged me to launch a sustainable brand, and they tend to fail,” said Frederic Court, one of the first investors in Reformation and founder of Felix Capital, a London-based venture capital firm. “Few brands have managed to make sustainability sexy. The Reformation did that.”

In early 2010, Reformation gained attention with the form-fitting floral dresses worn by Rihanna and Taylor Swift, helping to create what The New Yorker called “iconic”. Meanwhile, her tagline – “Being naked is the #1 most sustainable option. We are #2.” — related to consumers who care about climate change. Later, the brand mastered outfits for big occasions such as weddings, when department stores like Macy’s began to lose their luster. It then expanded into denim and other staples that did well.

The company has also built a following by using transparency to promote its eco-friendly activities, led by Kathleen Talbot, Sustainability Director at Reformation. According to the United Nations, scrutiny is growing in the garment industry, which emits about 10 percent of greenhouse gases. One way the company plays is by counting a product’s “sustainability impact” on the product page, right below the fit details.

In one example, a $248 sweater made from recycled cashmere saves 600 pounds of CO2 and nearly 3,000 gallons of water compared to conventional clothing, according to the company’s methodology. The Reformation also promotes its green bonafides with data and reports. Shoppers can read online about its commitments, including sourcing all fabrics from recycled, renewable or regenerative materials by 2025, or how it is working to use mushroom leather.

In marketing, the brand has shown a knack for capturing the attention of its customers, from Gen Z to Gen X, and making the chain a competitor to retailers such as Aritzia, J. Crew’s Madewell and Free People from Urban Outfitters. Her Instagram and TikTok accounts feature influencer-recorded clothing tips, memes, and photos of celebrities like Paris Hilton wearing the network’s clothes.

The company’s locations are characterized by economy and simplicity. There is a small selection of best-selling outfits rather than the crowded shelves of traditional stores. Customers can use in-store touchscreens to browse more items and select items to try on, which are then delivered to the fitting room. It all has the vibe of an Apple store.

Analysts say that while there is a risk that trends will change, Reformation stands out by focusing on product development and profitability – rather than growth at all costs. Unlike some young brands, it also does not shy away from diversifying distribution by opening stores – it currently has around 40 – or establishing wholesale partnerships, including a deal with Nordstrom.

The IPO market has been tough over the past few years, especially for consumer companies. According to Dylan Carden, an analyst at William Blair & Company, in order to attract the first investors, brands must demonstrate long-term profitability and sustainable sales growth without large marketing budgets.

Permira acquired a majority stake in Reformacja in July 2019; less than a year later, the company was struggling with a pandemic. Most of the retail industry closed stores in March 2020 in an attempt to slow the spread of Covid-19. In June, founder and CEO Yael Aflalo left the company after a former employee accused her of racism. (At the time, she pleaded guilty to the company’s “white gaze” approach to diversity.)

Borenstein, who held several leadership positions at the company, took over and worked to revitalize the brand, which was selling lots of dresses and jeans instead of work-at-home outfits like leggings. The Reformation rebounded with strategies that included an extension to sportswear.

The next phase of growth will see the addition of stores in international markets such as the UK. (The company generates 20 percent of its revenue outside of the United States.) The brand is also entering new categories, including handbags.

But as a company grows, so does the risk of failing to meet its climate goals, says Rachel Kitchin, a corporate climate activist at, who measures companies’ work on decarbonisation. She said some materials used by the Reformation, such as recycled cashmere and organic cotton, are scarcer and more expensive, which may limit their use.

Environmentalists are also questioning whether a brand producing large-scale new clothing can really advertise itself as sustainable. Reformation still sells vintage clothing, but these items represent only a small proportion of sales.

“For fashion to be sustainable, we need to wear our clothes more often,” said Veronica Bates Kassatly, an independent fashion consultant. He also argues that the Reformation vaguely claims the influence of the materials and factories it uses.

Whatever its shortcomings, the Reformation is ahead of its larger competitors. It is one of the few brands to have supported legislation in New York State and Congress that would require more transparency in fashion supply chains. The company also works with organizations that enable the repair, recycling and resale of its products.

Borenstein agreed that buying used clothing is better for the planet, but said most people today don’t shop that way.

“Where we get comfort is knowing we’re giving the consumer a better option,” she said.

Olivia Rockman

Learn more:

Patagonia, Reformation back strengthened New York Fashion Act

The proposed rules aim to hold big brands accountable for the environmental and labor impacts in their supply chain.

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