This story appears in the June 2015 issue of Entrepreneur. Subscribe »
It wasn’t fresh mist swirling about the air in Dongguan, China—it was toxins. “You couldn’t even see toward the end of the block because the pollution was on eye level,” says Yael Aflalo, who once designed clothing for Urban Outfitters and now runs Reformation, a fast-fashion line that’s rejiggering the notoriously pollutive apparel industry. “All these dresses I was making for Urban Outfitters, they were all made out of fossil fuels.”
A typical wardrobe includes clothing made from polyester, acrylic, nylon or spandex—all petroleum-based products—which release chemicals as they decompose and take years to biodegrade. Surprise: Cotton isn’t much better for the environment; a cotton shirt can take 700 gallons of water to make, and the crop consumes 25 percent of the world’s insecticides, despite using only about 2.5 percent of the world’s arable land, according to the Natural Resources Defense Council and International Trade Centre, respectively.
Aflalo was at a crossroads. “I had built up all this experience in fashion, but I couldn’t be part of the existing models,” she says. Ya-Ya, her first wholesale clothing line, folded in 2007 due to the financial crisis that would billow throughout the country over the next few years. To make ends meet, she produced private-label collections for Urban Outfitters and other companies.
Then, in 2009, she founded Reformation, a line that aimed to green the fashion industry—with style. “There are sustainable fashion brands, but they’re not fashionable. That’s really the issue,” she says.
Reformation began with Aflalo and her team sketching out and making prototype apparel, then working with in-house sample makers to “pseudo-replicate” them using vintage clothing; for example, producing a dress by gathering salvaged dresses in a similar style and re-cutting them to suit a mother design.
Reformation designs effortless silhouettes that drape well on the body. “I wanted a very pure design aesthetic,” Aflalo says. “In my old company, I realized that there was way too much stuff on clothes. It would be better to simplify and to focus on what women really cared about in their clothing—how it fits.” The line makes small runs—about 200 per style—ensuring that they eventually sell out. Reformation unveils new collections on its website every week. Products are sold direct-to-consumer through the website and at three brick-and-mortar stores (two in New York and one in Los Angeles).
As Reformation has grown, its supply chain has become more sophisticated. Now, 70 percent of its apparel is produced in its own factory in L.A. (the rest at a factory a few miles away). Unlike the bleak conditions of Chinese factories, Reformation’s 32,000-square-foot space is bright, high-ceilinged and filled with an energetic buzz from people in every department—marketing, design, production and order fulfillment. Aflalo has even equipped the space with a garden fed with graywater from the factory.
About 65 percent of the designs are made from sustainable fabric; another 15 percent are made using overage fabric from textile companies; and the balance are reworked vintage items culled from rag houses. Even the hangers and packaging are made from 100 percent recycled materials. “Investors always ask me, ‘How can this scale?’” Aflalo relates. “What’s important is that you have to modify the supply chain to the size of business you have. Anything can scale; you just have to change as you grow.”
Reformation’s performance shows that Aflalo is on the right track. Revenue has doubled in each of the last four years, topping $25 million in 2014. The company recently closed a $12 million Series A financing round led by VC firms Stripes Group and 14W, as well as supermodel Karlie Kloss.
“We’re looking to grow faster,” Aflalo says. “We noticed that our online sales also do much better where our stores are located. We think [it’s because] our actual stores give people a place to try on the clothes, and then they can purchase online.”
She’s also tinkering with a digital-physical retail concept. “Our goal is to better infuse the in-store experience with our digital experience by leveraging technology in our brick-and-mortar locations. We want to give customers something unique, personal and also incredibly convenient.”
More design and fashion brilliance
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