Founders who step back from the CEO job are often assumed to have stepped out of the company. Reformation’s July 2026 stock-market debut showed what that misses. Yael Aflalo no longer runs the brand she started in 2009, but when it listed on the New York Stock Exchange, her family trust was expected to keep about 20% of the shares, per Bloomberg’s report as published by FashionNetwork. The Industry gives the same figure.
Reformation began in Los Angeles in 2009 as a vintage clothing boutique, according to The Industry. Fortune reports that Aflalo stepped down as CEO in 2020 and remains on the board. Hali Borenstein, who the company’s S-1 filing says has been with the business for 12 years, is now chief executive. The handoff came after Permira, the private equity firm, acquired a majority interest in 2019, as the S-1 describes it. Fortune puts that stake at about 65%.
The numbers the company brought to market were strong on growth and less so on valuation. Reformation reported net revenue of $507.1 million for fiscal 2025, per the S-1, and 20 consecutive quarters of double-digit revenue growth through the first quarter of 2026, per The Industry. About 90% of sales come direct to consumers. Profit is thinner: the S-1 shows $12.6 million of net income in 2025 but a $12.1 million net loss in the first quarter of 2026, on revenue of $112.3 million, up 30.4% from $86.1 million a year earlier.
Then the pricing. The shares sold at $15, the bottom of the marketed $15 to $17 range, raising $210.9 million. Of the 14.06 million shares, 9.48 million were newly issued and 4.58 million came from existing holders such as Permira. The implied valuation was about $886 million, below the roughly $1 billion the company had floated when its roadshow began, per The Industry and Bloomberg. Fortune reports the shares opened and closed flat on their first day. About $125.1 million of proceeds goes to paying down debt, which stood at $250.3 million at the end of June, per The Industry.
What the filings show is a founder who kept a large position and a board seat through the years the company grew into a public one. None of the outlets we read describes her reasons for stepping back from the CEO role, and Fortune’s piece doesn’t give one, so we don’t offer any.
It is a different path from the other founders in this archive. Joanna Griffiths sold 80% of Knix to Essity and kept a 20% stake while she stayed on as president for four more years. Candace Nelson sold Sprinkles to private equity and learned of its closure only two days before it happened. Aflalo’s position sits between those: a minority owner and director, with the company still operating, now with outside shareholders able to price her stake every trading day.
That last point cuts both ways. A listed stock puts a number on a founder’s remaining holding that private ones never get. The IPO’s number, an $886 million company at the bottom of its range, will be watched, and the lock-up agreements in the S-1 restrict insiders from selling for up to 180 days after the prospectus.
Frequently asked questions
Who founded Reformation?
Yael Aflalo founded Reformation in Los Angeles in 2009, per The Industry, as a vintage clothing boutique. It later became a sustainability-focused womenswear brand.
Is Yael Aflalo still involved with Reformation?
Fortune reports she stepped down as CEO in 2020 and still sits on the board. Hali Borenstein is listed as chief executive in the company's S-1 filing with the SEC.
How much of Reformation does Yael Aflalo own?
The Industry and Bloomberg, as published by FashionNetwork, both report that her family trust is expected to hold about 20% of the shares after the IPO. Permira is expected to hold about 49%, down from 64.4% before the offering, per The Industry.
How did the Reformation IPO price?
At $15 a share, the bottom of its $15 to $17 range, raising $210.9 million from 14.06 million shares, per The Industry and Bloomberg. The implied valuation was about $886 million, short of the roughly $1 billion the company floated at the start of its roadshow.