Reformation (2009-Present): how a vintage-resale start-up became a $500M sustainable-fashion brand under private-equity ownership

The 2009 founding and brand build

Yael Aflalo, a model-turned-fashion-entrepreneur, opened Reformation in 2009 as a vintage clothing resale operation in the back of a Los Angeles store. The original product mix was secondhand clothes and garments made from re-purposed materials. The brand voice from the start was distinctive: irreverent, female-coded, openly skeptical of mainstream fashion, with sustainability framing as the explicit point of difference rather than a side-of-stage claim.

Over the next decade the operation expanded from resale into in-house design and manufacturing. Reformation built its own production facility, developed sustainable-material sourcing programs (deadstock fabric, Tencel, organic cotton), and published the RefScale methodology to report environmental impact of each garment. The DTC channel (Reformation.com plus a growing number of owned retail stores) was the primary distribution. By the late 2010s the brand had become a defining example of sustainable-fashion DTC at scale.

The July 2019 Permira majority investment

In July 2019, Permira Funds announced a majority investment in Reformation. Aflalo remained CEO and a significant owner of the company. Specific deal terms were not publicly disclosed but the structure was reported as a typical PE majority transaction with management continuity. The investment was the most significant private-equity entry into the sustainable-fashion category at the time and validated the thesis that sustainable-fashion DTC could produce PE-scale returns.

The strategic logic for Permira: Reformation had a defensible brand position (sustainability as authentic identity rather than retrofitted marketing), a meaningful direct-customer franchise (the DTC channel built over a decade), and an operational platform (in-house design, manufacturing, supply-chain reporting) that could be scaled. The investment was structured to fund international expansion (UK and Europe), additional retail store openings, product-category extensions, and infrastructure investment.

The Borenstein era and revenue growth

Yael Aflalo stepped down as CEO in 2020 in the context of public commentary about company culture. Hali Borenstein, previously chief product officer, took over as CEO. Under Borenstein the brand has continued expanding: retail-store openings, product-category extensions (footwear, denim, expanded categories), and international expansion into the UK. Revenue reached approximately $350 million in 2023, and Borenstein has publicly projected revenue to exceed $500 million in 2025.

The brand has continued to publish RefScale environmental data on its products and to invest in supply-chain transparency. The post-Permira operational rigor has been visible in the retail-network expansion, product-quality consistency, and the broader category extensions. The brand remains under Permira majority ownership.

How RGM thinks about sustainable-fashion exits

When clients ask about exits in the sustainable-fashion space, the Reformation-Permira case is the defining example of how a sustainable brand can scale enough to attract PE-strategic majority investment. Three structural lessons. First, the sustainability positioning has to be authentic and operationalised, not just marketing. Reformation's in-house manufacturing, RefScale reporting, and supply-chain investment made the sustainability claim defensible against scrutiny; brands with weaker operational sustainability commitments could not survive PE diligence on the claim. Second, the brand voice mattered to the exit value. Reformation's distinctive voice (irreverent, female-coded, skeptical) gave it audience differentiation against generic sustainable-fashion competitors. Third, the DTC channel was structurally important to the value — direct customer relationships and recurring purchase data are part of what a PE buyer values, separate from the brand IP itself.

The pattern is hard to copy without all three. Sustainable-fashion brands with weak operational sustainability commitments cannot survive scrutiny. Brands without distinctive voice get lost against the broader sustainable-fashion category. Brands without DTC depth get valued as wholesale brands at much lower multiples. We tell clients in the sustainable-fashion space to think about all three pieces as load-bearing for long-term exit value.

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