Reformation Raises $12 Million from Stripes Group, 14W and Karlie Kloss

Largely self-funded since it was founded in 2008, Reformation brought in the big bucks as it gears up to expand.
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Eliza Brooke
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Largely self-funded since it was founded in 2008, Reformation brought in the big bucks as it gears up to expand.
Reformation founder Yael Aflalo at work. Photo: Katie Friedman

Reformation founder Yael Aflalo at work. Photo: Katie Friedman

In the six years Reformation has been in business, it's established itself as an eco-friendly brand for cool girls and has tacked on a lower-priced line, a bridal collection and ranges for petites and full busted ladies (the latter called the "I'm Up Here" collection). Until now it's been largely self-funded, too, outside of a seed round founder Yael Aflalo closed at the beginning of last year. "Until now," because the brand just raised $12 million in a funding round led by Stripes Group and 14W, with participation from Theory's Andrew Rosen, Miroslava Duma and the entrepreneurship-minded model Karlie Kloss.

The cash will be fueling a number of growth initiatives, Aflalo says, including building more stores, expanding manufacturing capabilities and investing in technical systems that will improve customer service by enabling processes like in-store returns for product purchased online — something that's harder than it sounds, but is crucial for staying competitive with other retailers. ("There's a lot of customer expectation around it being seamless," Aflalo says.) The team also has a roadmap for sustainability initiatives in place for 2015, including making the clothes more washer-friendly, and finding more sustainable fabric dyers and printers.

Aflalo wouldn't say how many stores Reformation will be opening in the near term or where they'll be — "We're still refining that" — but look for them cropping up both in cities where the brand already has a presence and in new markets. Though international customers represent about 25 percent of Reformation's sales, the company is focused on tackling the U.S. for the time being. 

Reformation's sales have been tripling each year, Aflalo adds. Last December, she told the New York Times that revenue for 2014 would come in north of $25 million, so you can extrapolate from there. 

Oh, and in case you were curious: Aflalo says that she and Kloss haven't talked about her modeling for the brand. Still, we'd expect at least a few Instagram snaps: she does have a stake in Reformation's success now, after all.