Reformation, the largest sustainable womenswear brand, which went public in July, is betting that shoppers still want physical fashion stores.
Another gamble: that opening new stores can help grow its online business, too.
The fashion retailer has opened four stores in the second quarter and ended the period with 70 locations globally.
The expansion is far from over.
Reformation plans to open 15 to 16 new stores during fiscal 2026, with roughly $23 million to $27 million in capital expenditures tied to the expansion.
And over the longer term, management plans to more than double the company’s store fleet during the next five years.
For Reformation, stores aren’t simply another place to sell dresses, shoes, and accessories.
The company says opening physical locations can introduce substantially more shoppers to the brand and accelerate its digital business in the surrounding market.
Chicago provides one of the clearest examples.
New-customer growth in the market accelerated to 50% year over year during the 11 weeks after Reformation opened two additional stores, compared with 28% during the preceding 20 weeks, CEO Hali Borenstein said during the company’s first earnings call as a public company.
Reformation attracted about 2,000 new customers in Chicago in one month following the openings, while direct-to-consumer revenue growth in the market accelerated by nearly 1.5 times.
A similar pattern has emerged internationally.
Reformation opened its first Paris store in the Le Marais neighborhood in November 2025 and added another location in Passy in March.
New-customer growth in France accelerated by more than 180% during the first half of 2026, while both stores are performing above the company’s initial expectations, Borenstein said.
The company currently operates in only about half of the 50 largest U.S. metropolitan areas, and management said roughly two-thirds of the locations in its development pipeline would bring Reformation into new markets.
Reformation adds customers as sales climb
The expansion is being supported by rather strong growth for an apparel company.
Reformation’s second-quarter revenue jumped 24.1% from a year earlier to $155.2 million, marking its 21st consecutive quarter of double-digit revenue growth.
Direct-to-consumer revenue increased 21.2% to $135.3 million, while wholesale and other revenue surged 48.7% to $19.9 million.
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Net income climbed 79.4% to $12.4 million, or 23 cents per diluted share, compared with $6.9 million, or 13 cents per diluted share, a year earlier.
Adjusted EBITDA increased 53.9% to $25.4 million, while adjusted EBITDA margin expanded 320 basis points to 16.4%.
Gross margin also increased by 230 basis points to 66.7%, primarily driven by lower average tariff rates and higher average unit retail prices.
But more importantly for the Reformation’s expansion strategy, its active customer base increased by 22.9%.
The company said the increase reflected strength in both retaining existing shoppers and bringing new customers into the brand.
Direct-to-consumer revenue per customer declined 1.4%, but management attributed the decline largely to faster growth among new customers, who typically spend less when they first begin shopping with the company.
Reformation now serves roughly 1.2 million active customers.
About 70% of active customers live outside New York and Southern California, while approximately 20% are international.
The company is also attracting shoppers across age groups. About 20% of customers acquired last year were younger than 25, while another 20% were older than 50.
In 2025, roughly 70% of revenue came from repeat customers.
According to Reformation’s IPO prospectus, customers who shopped both online and in stores generated 3.1 times as much revenue per customer in 2025 as shoppers who used only one channel.
Its mature full-price stores generated an average of roughly $2.7 million in annual revenue per location and typically recovered their initial investment in less than two years.
That helps explain why Reformation is making physical expansion a major part of its growth strategy, even as apparel retailers take very different approaches to their store networks.
Zara’s owner, Inditex, for example, is selectively expanding in the U.S.
All this, as it operates significantly fewer stores globally than it did several years ago, preferring larger and more productive locations.
Reformation, meanwhile, sees room to add stores because much of the country remains relatively untapped.
Reformation uses faster production to limit risk
Reformation’s growth model also depends on avoiding one of the apparel industry’s biggest risks: making large bets on what shoppers will want months before they actually buy it.
Instead of committing heavily to inventory far in advance, the company tests products and increases production of styles that generate demand.
Reformation produces more than half of its products within 60 days or less, while approximately 90% of direct-to-consumer revenue comes from styles that have already demonstrated demand, according to the company’s earnings call.
This allows the company to react more quickly when fashion trends change and potentially reduces the amount of unwanted merchandise that eventually has to be discounted.
Inventory nevertheless increased to $81.8 million at the end of the second quarter from $65 million a year earlier.
Reformation said the increase primarily reflected new store openings and higher sales volume.
Wholesale is also becoming a larger contributor to growth.
Wholesale and other revenue jumped 48.7% during the quarter, driven by stronger demand from existing wholesale partners.
Management said it intends to remain selective about those partnerships, using wholesale partly as another way to introduce shoppers to Reformation.
International sales are growing even faster than the U.S. business.
International revenue grew faster than Reformation’s U.S. business during the quarter, rising 36.8% to $31.2 million.
U.S. revenue increased 21.3% to $124 million.
Reformation operates stores across the U.S., U.K., Canada, and France and sells online to shoppers in more than 150 countries.
Strong growth meets a skeptical stock market
The expansion comes only weeks after Reformation entered the public markets.
The company priced its initial public offering at $15 per share on July 29.
The stock began trading on the New York Stock Exchange under the ticker REF on July 30.
Its first quarterly report as a public company showed accelerating customer growth, rising profitability, and plans for further physical expansion.
Investors, however, have yet to reward the company to the same degree as its customers.
Reformation shares are currently trading below their $15 IPO price, down over 6% in the past month.
And management expects full-year fiscal 2026 revenue of $602 million to $606 million, representing growth of approximately 18.6% to 19.5%.
Reformation also expects an adjusted EBITDA margin of between 14% and 14.2%.
The next test will be whether Reformation can continue to use physical stores to bring new shoppers to the brand while preserving the profitability that has distinguished its early run as a public company.
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