The 'sexy math' behind Reformation's Big Short-style pitch to Wall Street on its $1 billion IPO

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Reformation is heading to Wall Street and it’s not exactly giving investors the usual buttoned-up IPO pitch.

The Los Angeles-based fashion brand filed to go public in June and plans to list on the New York Stock Exchange under the ticker symbol “REF.” Founded in 2009, Reformation has been majority-owned by private equity firm Permira since 2019.

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But while most companies spend their pre-IPO roadshows talking investors through charts and financial forecasts, Reformation leaned into the personality that helped make it popular with shoppers.

In a 30-minute video viewed by Vogue Business, executives explain the company’s business while a model lounges in a bubble bath holding a glass of Champagne — a playful nod to Margot Robbie’s famous bathtub scene in The Big Short, where she breaks down complicated Wall Street jargon.

“When it comes to delivering value to shareholders, we mean business,” the model says in the video.

Reformation calls some of its numbers “sexy math,” but the pitch is pretty simple: loyal customers, strong data and a growth story increasingly powered by technology and AI.

More than a tagline

The bathtub was also a wink at one of Reformation’s best-known taglines: “Being naked is the #1 most sustainable option. We’re #2.”

It’s an unusual way to sell an IPO, especially at a time when fashion brands have been relatively rare on public markets. Reformation is targeting a valuation of as much as $1 billion, pricing 14.1 million shares between $15 and $17 apiece in a deal that could raise up to $239.1 million.

Mark Bage, founder of Not Studio, said that on revenue alone, the valuation is not especially aggressive. It works out to roughly twice Reformation’s annual revenue, compared to more than six times sales when Birkenstock went public.

That comparison also comes with a warning. Birkenstock’s shares fell nearly 12% on their first day of trading in 2023 before eventually recovering, showing that even a well-known fashion brand can have a difficult start on Wall Street.

Reformation has plenty of growth to point to. The company generated more than $500 million in revenue last year, up from $205 million in 2021. The harder number to explain is profit. Reformation’s net income fell from $32.6 million to $12.6 million even as its sales continued to climb.

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“The premium sits on a thin and shrinking profit while the growth story does the work,” Bage told Moneywise. Bage said fashion companies also face a risk that is much harder to put into a spreadsheet: tastes change.

“A loyal base built on one aesthetic is a strength until the aesthetic moves, which is why public markets price predictability and fashion struggles to promise it,” he said.

The growth pitch

One of Reformation’s strongest selling points is that its customers keep coming back. Nearly 70% of its direct-to-consumer revenue in 2025 came from returning customers, according to its IPO filing. Those shoppers buy from the brand an average of 2.6 times a year. For investors, that can make future sales easier to predict.

“Repeat purchasing is the closest thing apparel has to a subscription. It makes next year’s revenue forecastable, and public investors pay up for forecastability,” Chan Ahn, founder of Tessera, told Moneywise.

Reformation also points to another sign of brand strength: about 80% of its merchandise sells at full price, while the company generally limits discounting to twice a year. Ahn said that matters because heavy markdowns can quickly eat into a fashion brand’s profits and train shoppers to wait for sales.

“In fashion, full-price sell-through is the truest measure of brand strength I know,” he said. “Selling 80% of merchandise at full price means demand exceeds supply at the prices being charged, and it means management buys inventory with discipline.”

And keeping both that pricing power and customer loyalty could become harder as Reformation grows.

Dana Auslander, founder and CEO of LUXUS and a former Blackstone investor, said direct-to-consumer fashion can become harder to sustain as advertising gets more expensive and brands compete for the same shoppers.

“Returning customers are great for now but as we saw with AllBirds and virtually all the beauty brands most notably Glossier, that has a shelf life,” she told Moneywise.

The opportunity ahead

Reformation is also betting that technology can help it turn customer loyalty into more efficient growth.

“Technology, data, and now AI, are embedded across our value chain,” Reformation COO Ivan Tchakarov told investors.

That strategy already shows up in stores. Reformation’s Retail X system lets shoppers choose what they want to try on through an in-store screen, while the company uses data behind the scenes to better understand what customers want and how they shop. In fact, Reformation says its Retail X stores generate an average order value 8.5% higher than stores without the technology.

CEO Hali Borenstein said Reformation plans to use data, analytics and AI to make the business more efficient as it grows — an increasingly important part of the pitch as the company tries to expand without letting costs grow just as quickly.

Moneywise reached out to Reformation for comment on its upcoming IPO but did not receive a response before publication. The company is expected to begin trading on July 30.

Then Wall Street will get to decide whether Reformation’s mix of loyal shoppers, technology and “sexy math” really adds up.

The ‘sexy math’ behind Reformation’s Big Short-style pitch to Wall Street on its $1 billion IPO

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