Last week, Reformation dropped 70 new products on its site, a regular refresh designed to keep consumers coming back to buy more.
The high stakes balancing act is becoming increasingly pressing as the LA-based brand continues to grow. This week it’s launching a new set of sustainability commitments in a bid to convince sceptics that it can successfully sustain a climate-friendly spin on an old-school business model.
The company built its business on the promise of cute, but environmentally-responsible style, even coining a tongue-in-cheek tagline suggesting the only thing more sustainable than Reformation’s clothing is a birthday suit.
The high stakes balancing act is becoming increasingly pressing.
But its growing volumes and fast-paced production have raised questions about whether it can continue to claim the environmental high ground.
The brand is doubling down on its commitments, putting together a suite of new targets with an ambition to become climate positive (an increasingly buzzy, but loosely defined goal to do more environmental good than harm through business operations). For Reformation, it means removing more carbon dioxide from the atmosphere than it emits.
Reformation plans to slash the emissions associated with its manufacturing base to align with global goals to avoid catastrophic climate change, an ambitious challenge to decouple its climate footprint from its growth. The company will set an internal carbon price to help share the cost of investments required to directly reduce the impact of its manufacturing with suppliers, rather than offsetting. The exact details are still being refined. Elsewhere, it plans to rapidly scale up the amount of material it sources from regenerative farms to 10 percent of its total volumes by 2025.
“This is a little bit untested,” said Kathleen Talbot, Reformation’s chief sustainability officer and vice president of operations. “Hopefully we serve as a proof of concept that you can grow and scale a successful business with sustainability at its core.”
Convincing consumers of the strategy is key to maintaining the brand’s cachet in an era where corporate values and activism is more engaging and more critiqued than ever before.
The LA-based brand has boomed over the last decade thanks to a potent mix of fashion-forward design, early uptake of the direct-to-consumer business model and a social-media-savvy marketing strategy focused on conscious consumers.
The company was among the first to make fashion labelled sustainable desirable, attracting venture capital funding over the years and a cash infusion to fuel international expansion from private equity firm Permira Advisers in 2019, when revenue was projected to top $150 million. It’s also profitable and continuing to expand, despite a pandemic slow down this year.
Convincing consumers of the strategy is key to maintaining the brand’s cachet.
It’s been a challenging year beyond the pandemic’s financial fallout. Founder Yael Aflalo stepped down as chief executive in June after facing accusations of racism. A third-party investigation commissioned by the company later absolved Aflalo but pointed to wider cultural problems at the fast-scaling business.
The growing pains extend beyond the company’s culture. Reformation’s increasing size has brought increasing complexity and greater scrutiny on the operations behind the values it markets.
Originally the brand’s manufacturing was done mostly in-house in LA using deadstock fabric leftover or over-ordered from other designers or fabric warehouses. In 2018 it outsourced 20 percent of production to third-party factories. Now nearly half its manufacturing takes place in China, Turkey, Mexico and Morocco. That means the areas where the company’s largest environmental impacts lie are out of its control and it faces the same challenges as the mainstream industry in managing an opaque, convoluted and distant supply chain.
Its new commitments require shifting this traditional model to engage directly with farmers, investing alongside suppliers and modifying design and fabric choices to align with the company’s climate strategy.
“We hear from our customers that they’re scared and they want brands to be more responsible when it comes to climate action,” said Talbot. “We want to make it more accessible… and engage customers along the way.”