Reformation
A sustainable fashion brand that started with $7,000 and vintage dresses in the back of a Los Angeles storefront, grew to $500 million in revenue, and proved that environmentally conscious clothing could be both profitable and genuinely cool.
Reformation has been profitable every year since 2016 while manufacturing over half its products in its own Los Angeles factory, tracking the carbon and water footprint of every garment it sells, and releasing new collections every two to four weeks. The company reached $350 million in annual revenue by 2023, is on track to exceed $500 million in 2025, and operates more than 40 retail locations across four countries.
Founder Yael Aflalo started the company in 2009 with roughly $7,000 and a rack of reworked vintage dresses. She bootstrapped it for six years before raising $37 million in venture capital, then sold a majority stake to private equity firm Permira in 2019 for an undisclosed sum. She resigned as CEO days later, in June 2020, after former employees accused her of allowing a racist workplace culture to develop. The company she built kept growing without her.
At a glance:
| Founded | 2009, Los Angeles |
| Founder | Yael Aflalo |
| CEO | Hali Borenstein (since June 2020) |
| Ownership | Majority held by Permira (since 2019); Aflalo retained a significant minority stake |
| Revenue (2023) | $350 million |
| Revenue (2025 projected) | $500 million+ |
| Profitable since | 2016 |
| Employees | ~1,000 |
| Retail locations | 40+ across U.S., Canada, U.K., and France |
| Where sold | thereformation.com, own retail stores, Nordstrom, Net-a-Porter |
The Story
A rack of vintage dresses on La Brea Avenue
Yael Aflalo grew up around her parents’ clothing business in the garment district of Los Angeles. By 21, she had launched her first label, Ya-Ya, after producing a small batch of handmade skirts from pashminas and selling them to Fred Segal. Ya-Ya became a legitimate contemporary brand whose body-hugging basics and puff-sleeved dresses ended up in the closets of celebrities like Rihanna and Karlie Kloss, but Aflalo grew disillusioned after seeing the waste firsthand: 80 percent of printed lookbooks thrown away, yards of leftover fabric discarded, and factory conditions in China that made her question whether the industry she worked in was worth saving.
She shut down Ya-Ya in the late 2000s and, in 2009, opened a small storefront on La Brea Avenue in Los Angeles where she bought vintage dresses, reworked them, and resold them. That was the entire business model, and she started it with about $7,000.
From deadstock fabric to a factory of her own
Within a year, the demand outgrew the supply of vintage pieces, so Aflalo began designing original garments using deadstock fabric, the leftover material from other designers’ production runs that would otherwise end up in a landfill. By 2013, she had built her own factory in downtown Los Angeles, which she called the first sustainably focused apparel factory in the United States.
The brand found its audience by doing something that no other sustainable fashion company had managed at the time: making environmentally responsible clothing that women actually wanted to wear. Reformation dresses were not the shapeless, earth-toned garments that the word “sustainable” typically conjured in 2012. They were fitted, flattering, and designed for women who wanted to look good on a Saturday night. That positioning, making sustainability sexy rather than virtuous, turned out to be the company’s most important decision.
The founder leaves, the company stays
For six years, Aflalo ran Reformation without taking a dollar of outside money. In 2015 and 2017, she raised $37 million across two rounds from Forerunner Ventures, Stripes Group, 14W, and Imaginary Ventures. In July 2019, London-based private equity firm Permira acquired a majority stake for an undisclosed sum, and Aflalo remained CEO with a significant ownership position.
Then, on May 30, 2020, Reformation posted on Instagram in support of Black Lives Matter, and the company’s past caught up with it. Former flagship store manager Leslieann Elle Santiago responded with a detailed account of three years of racial discrimination. Multiple former employees corroborated her story. Aflalo posted an apology, donated $500,000 to civil rights organizations, and resigned as CEO on June 12, 2020. Hali Borenstein, who had been serving as president, took over and has led the company through its most aggressive growth phase since.
The Strategy
Vertical manufacturing in a city that stopped making clothes
While most American fashion brands outsourced production overseas starting in the 1990s, Reformation doubled down on Los Angeles. The company built its own factory, controls its own pattern-making and cutting, and partners with local manufacturers for the remainder. This vertical integration gives Reformation the ability to produce small batches of new designs quickly, test demand with limited inventory, and avoid the overproduction that defines most of the fashion industry. The approach costs more per unit than offshore manufacturing, but it reduces waste, shortens lead times, and gives the brand a supply chain story that competitors who manufacture in Bangladesh or Vietnam cannot replicate.
From 65 percent dresses to a full wardrobe
In 2019, roughly 65 percent of Reformation’s revenue came from dresses. CEO Hali Borenstein recognized that a brand built on a single category had a ceiling, and she systematically expanded into denim, knitwear, shoes, swimwear, bridal, kids’ clothing, handbags, and jewelry. By 2024, dresses accounted for about 35 percent of sales, which means the non-dress categories grew fast enough to flip the ratio while the dress business itself continued growing. That kind of product development discipline, expanding into adjacent categories without abandoning the core, is what separates brands that scale from brands that plateau.
Retail as a growth engine
Reformation was a DTC brand before the term existed in marketing vocabulary, selling primarily through its own website for its first decade. Under Borenstein, the company opened more than 40 retail stores across the U.S., Canada, the U.K., and France, with 15 new stores opening in a single recent year. International revenue now accounts for over 20 percent of the business, up from nearly nothing before the retail push. The omnichannel expansion gave the brand access to customers who would never have discovered it online, particularly in international markets.
Sustainability as infrastructure, not a footnote
Every product page on Reformation’s website displays a RefScale score that tracks the pounds of carbon dioxide and gallons of water used to produce that specific garment, compared to what a conventional version of the same product would cost the planet. The brand has been carbon neutral since 2015 and publishes quarterly sustainability reports that include its misses alongside its wins. In 2023, Reformation products emitted 31 pounds of CO2 per unit against a target of 24 pounds, and the company published that failure in its own report rather than burying it. Most fashion companies that tried sustainability before Reformation treated it as a line extension or a marketing campaign. Reformation built the entire supply chain around it.
The Marketing
The cool girl who cared
Reformation’s tagline tells you everything about its brand voice: “Being naked is the #1 most sustainable option. We’re #2.” While every other sustainable fashion brand in the 2010s relied on earnest storytelling and green cliches, Reformation opted for deadpan humor, self-aware copy, and a tone that read like your funniest friend who also happened to care about the planet. Their sustainability report opens with “Oh hi, oversharing is kind of our thing.” The marketing never asked women to sacrifice style for principles. It told them they could have both and look better than everyone else doing it.
That voice did something that no amount of paid advertising could replicate: it made sustainability aspirational instead of preachy. Reformation avoided the trap that killed most of its competitors, which was positioning environmental consciousness as a moral obligation rather than a lifestyle choice. By framing the brand as flawed and honest rather than righteous, the copy made buying a $200 dress feel like an act of smart taste rather than an act of charity.
Celebrities who buy their own dresses
Taylor Swift wore a yellow Reformation dress in her first TikTok video, and it sold out in hours. Selena Gomez, Hailey Bieber, Kendall Jenner, Kaia Gerber, Adele, Jennifer Aniston, and Emily Ratajkowski have all been photographed wearing the brand. The critical difference between Reformation’s celebrity presence and a traditional influencer marketing campaign is that most of these women were not paid to wear it. They bought it themselves, wore it to brunch or on the street, and paparazzi photos did the rest.
This creates a specific kind of earned media that money cannot purchase directly: the credibility of unprompted endorsement. When a tabloid publishes a photo of a celebrity wearing Reformation on a Tuesday afternoon, the reader does not process that as an advertisement. She processes it as evidence that the brand is worth her attention. Reformation understood early that the most valuable marketing asset in fashion is not a campaign, it is a photograph that looks like it was never meant to be one.
Pete Davidson and the art of the viral campaign
In February 2025, Reformation cast Pete Davidson as its “Official Boyfriend” for a Valentine’s Day campaign. Davidson, freshly tattoo-free, walked through a Reformation store helping women pick out clothes, wearing limited-edition “Official Boyfriend” crewnecks and boxer briefs. Within 48 hours, the campaign generated $1.2 million in media impact value. Billboards and wallscapes went up in Los Angeles and New York while the internet dissected every frame.
The campaign worked because it was unexpected and funny, two things that most fashion advertising is not. Reformation’s willingness to cast a comedian known for dating supermodels (rather than a model known for looking like one) was the same instinct that produced the brand’s voice in the first place: lead with personality, and let the clothes speak for themselves.
Small drops, constant presence
Reformation releases new collections every two to four weeks, which keeps its email list and social feeds perpetually fresh without relying on discounting. Each drop is small enough to sell through quickly, creating urgency without manufacturing artificial scarcity. The company’s Instagram, which has over 3 million followers, reaches an audience that is 86 percent non-followers on any given post, meaning the content consistently breaks out beyond the existing customer base. The combination of frequent product releases, a distinctive visual identity, and a community of “Ref Babes” (the brand’s term for its organic micro-influencer base) built a social presence that required very little paid advertising spend for its first decade.
The Numbers
| Year | Estimated Revenue | Notes |
|---|---|---|
| 2009 | ~$7K starting capital | Vintage reworking only |
| 2017 | ~$100M | Reported at the time of Series B |
| 2019 | ~$150M | Estimated at time of Permira deal |
| 2023 | $350M | Company-confirmed figure |
| 2025 (projected) | $500M+ | CEO stated the brand would “comfortably exceed” this figure |
Reformation has maintained EBITDA margins in the high teens for the last five consecutive years, which is unusually strong for an apparel brand that manufactures domestically and invests heavily in sustainability infrastructure. The company was generating positive returns before it took any venture capital and long before Permira acquired a majority stake.
The funding: Aflalo bootstrapped Reformation for its first six years, then raised $37 million across two rounds from Forerunner Ventures, Stripes Group, 14W, and Imaginary Ventures. The Series B in December 2017 valued the company at $195 million.
The Permira deal: Permira acquired a majority stake in July 2019 for an undisclosed sum. The deal gave Reformation access to Permira’s operational expertise and capital for international expansion, and it gave Permira a growing, profitable fashion brand with a built-in sustainability moat.
The IPO that didn’t happen: In 2023, Bloomberg reported that Reformation was exploring a public offering as revenue surpassed $300 million. By early 2024, CEO Borenstein told WWD the company was “not on the market for anything” and was not preparing for an IPO. The company remains private.
Controversies
Workplace racism allegations and Aflalo’s resignation
On May 30, 2020, Reformation posted on Instagram in support of Black Lives Matter. Former flagship store manager Leslieann Elle Santiago responded with a detailed account of her three years at the company, describing how she was consistently overlooked for promotions in favor of less-qualified white colleagues, how Black and non-white employees were assigned to work in unheated back-stock areas while white employees worked the heated sales floor, and how she had served as an assistant manager for over a year without anyone being promoted above her or alongside her. Santiago also alleged that when someone showed Aflalo a potential Black model for a campaign, Aflalo responded, “We’re not ready for that yet.”
Multiple former employees corroborated Santiago’s account with their own stories of racial discrimination at the company. Aflalo posted an apology on Instagram with the words “I’ve failed,” donated $500,000 to civil rights organizations, and resigned as CEO on June 12, 2020. A subsequent third-party investigation cleared Aflalo of being “racist” as an individual but found that her behavior had been “inappropriate” and that the company’s internal culture had not kept pace with the demands of a rapidly scaling business.
Greenwashing criticism
Sustainability advocates and industry critics have questioned whether Reformation’s marketing overstates its environmental impact. The core criticism is that releasing new collections every two to four weeks, regardless of the materials or manufacturing methods used, still encourages overconsumption and contradicts the “buy less, buy better” philosophy that genuine sustainability requires. Since Permira’s acquisition, some critics have noted a shift toward cheaper synthetic fabrics and away from the natural fibers and deadstock that defined the brand’s early years. Reformation does not publish a complete list of its tier 1 and tier 2 suppliers, which limits independent verification of its ethical claims. The company counters by pointing to its quarterly sustainability reports, its RefScale tracking, and its carbon-neutral certification, but the tension between growth and genuine sustainability remains an open question for the brand.
What You Can Learn
Being profitable before you raise money changes everything that comes after. Reformation was profitable by 2016, two years before its Series B and three years before selling to Permira, which meant Aflalo negotiated from a position of strength rather than desperation. Most founders take venture capital because they need it to survive, but a company that is already making money can choose its investors, set its terms, and maintain more ownership through the process. Sara Blakely did the same thing with Spanx, staying profitable and self-funded for over twenty years before selling.
The framing matters more than the feature. Dozens of sustainable fashion brands existed before Reformation, and most of them failed because they sold sustainability as a sacrifice. Reformation sold it as style. The dresses were sexy, the marketing was irreverent, and the environmental angle was presented as a bonus rather than a burden. If you are building a business around a cause or a value, the lesson is to lead with what the customer actually wants, then deliver the values on the backend.
Category expansion is how you escape a ceiling. When 65 percent of your revenue comes from one product type, you are one trend shift away from a crisis. Borenstein’s systematic expansion into denim, knitwear, swimwear, and accessories cut dress dependency to 35 percent while growing total revenue past $350 million. If your online business relies heavily on a single product or service, that concentration is a risk worth addressing before the market forces you to.
A founder’s culture becomes the company’s culture, whether she builds it intentionally or not. Aflalo built a company that millions of women loved and that made sustainability commercially viable in fashion, and she still lost her position because the internal culture she allowed to develop did not match the values the brand projected externally. The gap between what a brand says publicly and how it treats people privately is always, eventually, exposed.
Frequently Asked Questions
Who founded Reformation?
Yael Aflalo founded Reformation in 2009 in Los Angeles, starting with vintage clothing reworked in the back of a small storefront on La Brea Avenue.
How much revenue does Reformation generate?
Reformation reported $350 million in revenue in 2023 and is projected to exceed $500 million in 2025, according to CEO Hali Borenstein.
Who owns Reformation?
London-based private equity firm Permira has held a majority stake since July 2019, with Aflalo retaining a significant minority ownership position after the deal.
Is Reformation actually sustainable?
Reformation manufactures over 50 percent of its products in its own Los Angeles factory, has been carbon neutral since 2015, and publishes quarterly sustainability reports with a RefScale that tracks the environmental impact of every product. Critics argue that its fast collection cycle and increasing use of synthetic fabrics undermine those efforts, and the company does not publish a full supplier list for independent verification.
Why did Yael Aflalo leave Reformation?
Aflalo resigned as CEO on June 12, 2020, after former employees alleged a pattern of racial discrimination at the company, including claims that Black employees were passed over for promotions and assigned worse working conditions than white colleagues.
Is Reformation planning an IPO?
Reformation explored a potential IPO in 2023 when revenue surpassed $300 million, but CEO Hali Borenstein said in early 2024 that the company was not preparing for a public offering and remains private.
What happened to Yael Aflalo after leaving Reformation?
Aflalo launched a new fashion label under her own name, Aflalo, in September 2024, selling elevated womenswear priced between $290 and $10,000 through her own SoHo studio and wholesale partner Moda Operandi.
When was Reformation founded?
Yael Aflalo founded Reformation in 2009 in Los Angeles, opening a small storefront on La Brea Avenue where she bought, reworked, and resold vintage dresses. She started the business with roughly $7,000 and bootstrapped it for six years before raising any outside capital.
What is Reformation’s valuation?
Reformation’s December 2017 Series B valued the company at $195 million. London-based private equity firm Permira acquired a majority stake in July 2019 for an undisclosed sum, and the company has not gone public. Reformation explored an IPO in 2023 when revenue surpassed $300 million, but CEO Hali Borenstein confirmed in early 2024 the company was not preparing for a public offering.
What is Yael Aflalo’s net worth?
Aflalo’s personal net worth is not publicly disclosed. She bootstrapped Reformation with roughly $7,000 in 2009, retained significant equity through two venture rounds totaling $37 million, and held a substantial minority stake after selling majority control to Permira in 2019. She launched a new label under her own name in September 2024.
Where is Reformation made?
Reformation manufactures more than 50 percent of its products in its own factory in downtown Los Angeles, which Yael Aflalo opened in 2013 as the first sustainably focused apparel factory in the United States. The remainder is produced through local manufacturing partners, with vertical integration giving the brand control over pattern-making, cutting, and small-batch production cycles.
Sources
- Permira: “Sustainable fashion brand Reformation announces majority investment from the Permira funds” (July 2019) for acquisition announcement and deal structure
- Fashionista: “Reformation Got Acquired, Plans for International Expansion” (July 2019) for deal context and prior funding of $37 million
- Fortune: “Reformation CEO Hali Borenstein talks expansion” (January 2024) for revenue, profitability since 2016, category expansion from 65% dresses to 35%, and IPO status
- Yahoo Finance/Fortune: “How Reformation’s CEO expanded the trendy brand beyond dresses” (2024) for EBITDA margins in high teens, international growth, $500M+ projection
- WWD: “Reformation CEO Yael Aflalo Steps Down Amidst Allegations of Racism” (June 2020) for resignation details and Santiago’s allegations
- Business of Fashion: “Former Reformation CEO Deemed Not ‘Racist’ as Workplace Reckoning Continues” (2020) for third-party investigation findings
- Today: “Reformation’s Yael Aflalo apologizes after racism accusations” (June 2020) for apology details and Santiago’s specific claims
- Racked: “Reformation Founder Yael Aflalo on Sustainable Fashion and Starting Over” (November 2014) for founding story, Ya-Ya background, and early career
- Bloomberg: “Reformation’s IPO Push Bets on People Paying $200 for Eco-Friendly Pants” (May 2023) for IPO exploration and revenue exceeding $300 million
- ESG Dive: “Reformation reports spike in direct emissions, misses 2023 carbon intensity target” (2024) for missed carbon target of 31 vs. 24 pounds per unit
- Reformation: “RefScale” for carbon and water footprint tracking methodology
- Puck: “Reformation’s Yael Aflalo Returns With a New Label” (September 2024) for Aflalo’s new brand launch
- Vanderbilt Business Review: “Reformation’s Identity Crisis: How Private Equity Compromised their Sustainability Promise” for greenwashing criticism and material quality concerns post-Permira
- Glossy: “Hali Borenstein, Reformation, Glossy 50 2025” (2025) for 40+ stores, 1,000 employees, international tripling
- TIME: “Reformation CEO Hali Borenstein on Centering Sustainability and Taking Risks” for store expansion and international revenue over 20%
- WWD: “Pete Davidson’s Tattoo-free Campaign Earns Reformation $1.2 Million in Media Exposure” (February 2025) for Pete Davidson campaign media impact value
- MarketSmiths: “How Reformation Makes Copywriting for Sustainability Sexy” for brand voice analysis, tagline, and sustainability report tone
- NoGood: “Reformation Marketing Strategy: A Case Study” for Ref Babes community, celebrity seeding strategy, and NYC Ballet collaboration
- Digiday: “How Reformation hopes viral moments help it become ‘part of a cultural conversation’” for Instagram reach metrics and viral content strategy