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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.
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. 

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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.