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Reformation Sells Majority Stake to Permira

Sustainable fashion brand Reformation will soon have a new owner–global private equity firm Permira, which inked an agreement to acquire a majority stake in the business.

More detailed terms of the investment were not disclosed.

Yael Aflalo, Reformation’s founder and chief executive officer, will stay on in that role and retain a “significant” ownership stake in the company, Permira said Wednesday. Aflalo is believed to have had a 55 percent to 60 percent stake in the company prior to inking the deal with Permira. Hali Borenstein who serves as Reformation’s president, will remain with the company in that role.

“When we met with the Permira team, it was clear that they shared our commitment to sustainability, and have a strong understanding of how to best navigate the complex and rapidly changing consumer market,” Aflalo said. “Permira’s global consumer and retail expertise is invaluable as we embark on this next chapter of growth.”

The Reformation founder said Permira’s investment will allow the company to expand its business domestically and internationally, as well as launch into new product categories. Though she didn’t outline what those new categories would be, Aflalo said the expansion will take the company “one step closer to our mission of bringing sustainable fashion to everyone.”

David Brisske, principal at the private equity firm, said Reformation is “uniquely positioned at the intersection of fashion and sustainability.” The company, he said, has a clear mission, beautiful products and a loyal following. “It’s rare for a business to have both tremendous brand strength and first-rate omnichannel capabilities, as Reformation has,” Brisske said, highlighting what caught Permira’s attention for the investment.

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Reformation’s longtime investor, Stripes Group, which first invested in Reformation back in 2015, will stay on as a partner.

“We are proud to have supported Reformation at key inflection points to help accelerate growth and drive scale, and are excited to continue to invest alongside Yael and the Permira funds as the company capitalizes on an even larger opportunity for future success,” Ken Fox, Stripes partner and founder, said.

Neither Permira nor Reformation disclosed whether other investors who took early stakes in the firm had exited their investments. One of those investors include Natalie Massenet, founder of Net-a-Porter, through the investment company she co-founded, Imaginary Ventures. Imaginary Ventures participated in Reformation’s Series B funding raise in 2017.

Reformation was founded in 2009 as a lifestyle brand that combines fast fashion and sustainability. The company creates limited-edition collections that feature vintage-inspired designs using sustainable materials and practices. Describing itself as a 100 percent carbon, water and waste neutral company, Reformation utilizes environmentally friendly processes in each component of its business, which includes a sustainable factory in Los Angeles that uses deadstock and eco fabrics.

The company’s model focuses on a vertically-integrated manufacturing and distribution process, and uses data to help with designs and inventory control.

“By incorporating better practices throughout our supply chain, we are able to create beautiful clothes at a fraction of the environmental impact of conventional fashion,” Aflalo said.

In addition to its online presence, Reformation also operates 14 stores and sells at Nordstrom and at Net-a-Porter.