There’s a lot to recommend a brand like Reformation to investors. 

It’s growing sales. It’s profitable. And it has a good story on sustainability. 

But as the company preps for an IPO after filing its registration statement with regulators last week, it’s coming up against some pretty heady competition for the investor’s dollar and mindshare. 

Reformation knows fashion, but can it promise the moon? 

Elon Musk’s AI, satellite and rocket mashup SpaceX raised $75 billion in its introduction this month by kind of promising the moon. And two other high-flying AI wizards — Anthropic and OpenAI — are working on their own mega offerings. 

In the wake of SpaceX, and if Anthropic and OpenAI’s IPOs happen, the question is: Can fashion get or keep Wall Street’s attention and will investors have any money left over to invest in IPOs in a much more down-to-earth sector? 

Reformation is going to be among the first to put that to the test — but it’s not alone. Men’s Wearhouse parent Tailored Brands Inc. confidentially filed for an offering in April. And Authentic Brands Group’s founder Jamie Salter said last month the brand management giant was eyeing an offering within 12 months. 

Potentially in the wings are active brand Alo, Kim Kardashian’s Skims and factory-direct luxury essentials company Quince, which was recently valued at $10.1 billion. 

The relative success or failure of the next fashion IPOs is going to depend on the company, the market at the moment and the popularity contest that can steer investments. 

“People are going to make choices based on their awareness and their familiarity of a business,” said Matthew Katz, who advises companies on strategic execution as managing partner at SSA & Co. “How often has that business been in the news? What sort of information do you know about that company? Can you tie the brands they have to the name of the business?”

The IPO game used to be played by only a limited number of investment professionals, but now many more individuals have investment accounts and are helping to fuel the market for new names as they chase riches.  

Those investors might need to be romanced into the idea of a fashion stock in the middle of an AI boom. 

“The other businesses just have more awareness, more panache,” Katz said. 

Still, the stock market continues to test new heights and is expected to tempt private equity owners and other investors to get out while the getting’s good.

“If your asset will hold up to the scrutiny, it’s a great time to be a seller because the multiples are high and then you should be able to sustain those growth rates and you’ll continue to be rewarded,” Katz said. “Is it a good time to be a buyer? If you do your diligence and you’re comfortable that the business has runway, then sure.” 

But fashion has seen this movie before and it doesn’t always turn out well. 

In 2021, there was a wave of IPOs that saw companies rush into the market only for most of them, including Allbirds which recently pivoted to a new business entirely, see their valuations crumble. 

Katz said that was a different time because the “direct-to-consumer businesses were viewed as perpetual growth engines” five years ago and the AI trade was still in the future. 

Regardless, the market is primed to move.

“There will be more IPO exits than there have been in the past,” Katz said of companies sitting in private equity portfolios. “It’s an exit path owners are getting more comfortable with and there’s more access for investors to that path and those two things in general are going to make this more attractive.”

Maybe fashion won’t have to promise the moon, even if SpaceX did just raise more money than all the U.S. IPOs during 2024 and 2025 combined, according to Renaissance Capital. 

David Shiffman, head of investment banking and co-head of consumer retail at Solomon Partners, said: “SpaceX holds several ‘firsts’ as the largest IPO, largest market cap for an IPO, leading global retail demand, etc. It showed the world how deep and liquid the global institutional and retail markets are. There is real interest for IPOs after an almost five-year drought. Investors are eagerly anticipating the next generation of retail brands that exhibit growth and profitability. Reformation is just one example.” 

As the highest-profile fashion brand testing the waters now, it is currently the IPO to watch.

“Reformation will be an interesting data point in the market,” said Brandon Yoshimura, Shiffman’s colleague and managing director of Solomon’s consumer retail group. “It is smaller than some privately held businesses, but if it trades attractively and is rewarded for its combination of growth and profitability, it may help unlock a pent-up supply of very healthy, profitable, fast-growing softlines businesses that have been waiting for a more supportive macro environment to transact.”