Reformation by Fung Global Retail Tech June

JUNE29,2016
Sustainably Fashionable:
• Reformation is a fashion startup that offers sustainably manufactured on-trend
apparel.Thebrandmaintainssustainabilitypracticesinthreemajoraspectsofits
fashionline:materials,manufacturingandpost-salerecycling.
• WerecentlyvisitedReformation’sflagshipstoreinSoho,NewYorkCitywherethe
brandoffersanall-channelandentertainingstoreexperience.
• Sustainable fashion has become a global trend driven by consumers’ growing
environmental conscience and diminishing desire for ownership. A number of
sustainable fashion startups gained popularity in recent years, including brands
fromtheUS,theUK,Australia,CanadaandtheNetherlands
ARADICALLYSUSTAINABLEFASHIONBRAND
Foundedin2009,Reformationisafashionbrand
that uses sustainable methods and materials to
design and manufacture women’s apparel. The
company also carries third-party accessories and
beauty products. The brand maintains
sustainability practices in three major aspects of
its fashion line: materials, manufacturing and
post-salerecycling.
Reformation takes pride in being a fashion
trendsetter. The company’s founder and CEO,
Yael Aflalo, is a former model and believes the consumer is no longer brand conscious
and wants to look effortless yet stylish for everyday occasions. Reformation offers ontrendcollectionsfroma$48off-shouldertoptoa$288maxidress.Thedesignstudiois
upstairs from its manufacturing facilities in Los Angeles, so Reformation can adjust
quickly to the latest fashion trends and manufacture its products to hit the market in
three to six weeks. Reformation has a long list of celebrity customers such as Rihanna,
BellaHadidandKarlieKloss.
THEREFORMATIONSTORE:ASHOWROOMFULLOFEXPERIENCES
FungGlobalRetail&TechnologyrecentlyvisitedReformation’sNewYorkflagshipstorein
SoHo. The company opened its first store in downtown Los Angeles in 2009 and
expandedtothreestoresby2016.ThelatestSoHoflagshiplocationwasopenedin2012,
oneofthetwostoresinNewYork.
The Reformation store incorporates a number of experiential retail elements such as
food offerings and a selfie booth. The store has a dedicated refrigerator with healthconsciousjuiceandsmoothiesforsale,whichallowscustomerstoreceiveahealthboost
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
DEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
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JUNE29,2016
without leaving the store. A selfie booth makes the shopping trip more fun. Customers
cantakearangeofphotosintheboothinfrontofReformation’scuratedbackgroundand
instantlysharetheirphotosonsocialmedia.Finally,thestorecarrieslittleinventory,so
thesalesfloorlookslesscluttered.
Reformation’sstoreisashowroomforitsonlinebusiness.Associatesprovidein-depth
knowledge about product offerings on the site and are well trained in instructing
customers how to place an order online. The store offers a dedicated space for resting
andentertainment.
SUSTAINABILITYASARETAILCONCEPT
WhatisSustainability?
Inthecontextofretail,itinvolvesdevelopingproductsanddeliveringservicesthatfollow
environmentally,sociallyandeconomicallyconsciousprinciples.
Reformationusesrecycledandenvironmentallyfriendlyfabrics
Reformationgarmentsusesurplusfabricson35%ofitsproductsandrepurposedvintage
clothing for about 5%. More than half of Reformation products use tencel and viscose,
which require fewer resources than conventional cotton and other oil-based fabrics for
theproductionprocess.
The company tracks and controls the environmental impact in the manufacturing
process
Reformation’s production and weaving process follows strict environmental standards
and the company uses its “RefScale” program to track the environmental cost of each
product.Whenpossible,Reformationclothesarelocallymanufacturedinthecompany’s
LosAngelesfactory,whichshortensthesupplychaincycletothreetosixweeks.
Reformation provides environmentally conscious service throughout the product
lifecycle
The brand has a dedicated sustainability research team who create an assessment of a
garment’s lifecycle, from manufacturing, to sale and finally, to recycling at the end.
Reformation provides carbon-neutral shipping services and an end-of-life recycling
service.
WhyDoesitMatterasaRetailConcept?
Globalconsumersareplacingahigherpriorityonthesocialandenvironmentalimpactof
theirpurchasesacrossgenerations.Retailersthatestablishanenvironmentallyconscious
reputation are better positioned to capture their spending power. According to a 2015
Nielsonstudy,72%ofmillennialsrespondentssurveyedsaidtheyarewillingtopayextra
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
DEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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JUNE29,2016
for sustainable offerings, up from 55% in 2014. Meanwhile, 51% of baby boomers said
theyarewillingtopaymoreforsustainableproductsin2015,upfrom44%in2014.
SustainableFashionVersusFastFashion
Inrecentyears,anumberofsustainablefashioncompaniesemergedinthefastfashiondominant industry. They provide environmentally responsible and higher quality
alternativestofastfashionbrandslikeH&MandZara.
This sustainable fashion trend is driven by what we see as a growing consumer
preference to own less clothing. Because of shrinking closet space, they are looking for
qualityandstylishpiecestokeep.Thereareotherwaystogetnewstyleseveryseason.
Insteadofbuyingnewclothes;theyrent,subscribeorbarterforthelatestadditionsto
theircloset.
AGlobalTrendofSustainableFashion
Anumberoffashionstartupsgainedpopularityinrecentyears,includingbrandsfromthe
US, the UK, Australia, Canada and the Netherlands. Brands like Reformation and Zady
focus on sustainable sourcing and manufacturing. Other startups like Cuyana and
reKindnessoperateclothingrecyclingorbarterprogramstoensurethegreatestutilityof
eachgarment.
Figure1:EmergingFashionStartupswithSustainabilityConcepts
Brand
Country
Founder
Year
UK
Safia
Minney
Netherlands
Solidaridad
(NGO)
2001
USA
YaelAflalo
2009
USA
Michael
Preysman
2011
Canada
Michael
Gaughan
2011
Canada
Nicole
Bridger
2011
USA
Karla
Gallardo,
ShilpaShah
2000
Funding
£1M
N/A
$12M
$1.1M
N/A
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
DEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
2013
$1M
$1.7M
BusinessModel
PeopleTreeisaUK-based
brandthatpioneeredfair
tradeandenvironmentally
sustainablefashion.
Kuyichiisaconscious
fashionbrandthatworks
directlywithorganiccotton
farmersandusesrecycled
cottonandpolyester.
Reformationisafashion
brandthatdesignslimitededitioncollections,sources
sustainablefabricsandhasa
greensupplychain.
Everlaneisaluxuryclothing
designandmanufacturing
companyaimstoprovide
low-cost,high-qualitygoods
withradicaltransparency.
Miikisa100%Canadianmadefashionablewoman's
brandwhichuses
sustainablysourcedluxury
fabrics.
NicoleBridgerDesignisa
fashionlinethatuses
ethicallysourcedmaterialto
makesimpleandfeminine
apparel.
Cuyanaisanonlinefashion
brandthatfeaturesa
clothes-recyclingprogram
namedLeanCloset.
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JUNE29,2016
USA
Soraya
Darabi,
Maxine
Bédat
2013
$1.35M
Australia
JAI
SHARMA,
BrianLee
2014
N/A
USA
Melanie
Kovach
2015
Bootstrap
Zadyisafashionandbeauty
e-commerceplatform
designedfor
environmentallyconscious
customers.
ThreadHarvestisanonline
shopthatsearchesfor
environmentallyfriendly
clothingacrosstheglobe.
reKindnessisanonline
bartercommunitythat
allowsuserstoswap
clothingandaccessories
withothermembersofthe
community.
Source:Companywebsites/FungGlobalRetail&Technology
Largeretailbrandshavecreatedsustainabilityinitiativestoappealtothenewgeneration
of consumers. Levi’s, Kering and Patagonia have launched a sustainable manufacturing
processes, while others like Eileen Fisher and J.Crew have introduced recycling and
charitycollaborations.
Figure1:SustainableCollaborationsbyFashionBrands
Brand
Program
Year
“4-Fold”
Approach
Mid
2000s
GreenEileen
2009
H&M
Conscious
2010
Water<Less
2011
Materials
Innovation
Lab
2014
Garmentsfor
Good
2015
Details
Patagoniausesa“4-Fold”approachtoscreen
potentialsuppliersthatensurestheyfulfill
sourcing,quality,socialandenvironmental
standards.
GreenEileenisaninitiativetocollectand
resellgentlyusedEFclothestosupport
programsforwomenandgirls.
H&MConsciousisasustainabilityprogram
thatisbuiltonsevencommitmentsand
hundredsofConsciousActions,includingthe
ConsciousExclusiveCollection.
TheWater<Lessprocessstrivestominimize
thewaterusedinthefinishingprocessof
makingjeans.
TheKeringMaterialsInnovationLab
highlightsinnovationinrawmaterials,fabric
processesandmanufacturing.
GarmentsforGoodsupportsnonprofitsby
donatingaportionoftheproceedsfromthe
GarmentsforGoodCollection.
Source:Companywebsites/FungGlobalRetail&Technology
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
DEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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JUNE29,2016
DeborahWeinswig,CPA
ManagingDirector
FungGlobalRetail&Technology
NewYork:917.655.6790
HongKong:852.6119.1779
China:86.186.1420.3016
deborahweinswig@fung1937.com
JingWang
ResearchAssociate
HONGKONG:
10thFloor,LiFungTower
888CheungShaWanRoad,Kowloon
HongKong
Tel:85223002470
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242-246MaryleboneRoad
London,NW16JQ
UnitedKingdom
Tel:44(0)2076168988
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NewYork,NY10018
Tel:6468397017
FBICGROUP.COM
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
DEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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