The Great Reformation

reformation ceo Hali Borenstein
Hali Borenstein’s choices for outside partners shows a certain fashion aptitude that most retail C.E.O.s simply don’t possess. Photo: Jonah Rosenberg/Bloomberg via Getty Images
Lauren Sherman
June 17, 2024

We’re at a moment in fashion when there are a lot of brands owned by investors who would very much like an exit and may never get one. When I talk to investors and operators about who might actually succeed, they often mention Reformation, which started selling deadstock vintage cashmere in Los Angeles in 2009 and now, thanks to its famously high-slit wedding-guest dresses and great-fitting jeans, generates upward of $350 million a year in sales—more than 90 percent of which are through its own channels. 

Five years ago, founder Yael Aflalo sold a majority stake in Reformation to Permira, the London-based private equity firm with quite the history of fashion exits: Hugo Boss (Permira exited at a $1 billion valuation), Valentino (sold to Mayhoola for $1 billion), and Dr. Martens ($5 billion I.P.O). One of the legends around Reformation was that Aflalo was so cost-conscious and boot-strappy that, at one point, she opted to use personal assets to fund the company rather than raise money from a less-than desirable partner. In the end, she took less than $40 million, and kept a “significant” stake in order to stay motivated for a second exit.