Reformation heads for the market at a billion-dollar valuation — and it is a test for all of fashion

Reformation, the womenswear brand backed by the fund Permira, is going public in the US at a valuation of up to $1bn. For fashion that is a rarity: there have been almost no public offerings in the industry in recent years.

The company, based in Vernon, California, together with some selling shareholders, expects to raise up to $239.1m, offering 14.1m shares at $15 to $17. The listing is on the NYSE under the ticker REF. The underwriters are J.P. Morgan, Morgan Stanley, Citigroup and RBC Capital Markets.

The moment chosen is a curious one. The US IPO market is at present almost entirely occupied by companies in AI infrastructure and defence. A fashion retailer’s offering will show whether investor appetite is widening beyond the fashionable sectors — or whether fashion stays outside.

“Investors are not avoiding consumer companies,” says Kat Liu, vice-president at the research firm IPOX. “It is simply that few retail brands have enough recognition and differentiation to interest the public market.”

Reformation began in 2009 as a vintage clothing boutique in Los Angeles and built its brand around sustainable production — which remains its main argument in conversation with investors too. But that is also where the vulnerability lies. “Consumers consistently say sustainability matters, but purchasing decisions are still driven by price, trends and convenience,” Liu notes: holding ethical production and competitive prices at the same time is a difficult balance.

The company makes around 90% of its sales directly, without intermediaries. That gives control over pricing, merchandising, customer relationships and inventory — but, as Liu qualifies, “I wouldn’t consider DTC in itself a competitive advantage, because a great many contemporary clothing brands use the same strategy.”

Permira, which bought a controlling stake in 2019, will retain significant influence after the offering.