Brands Briefing: Why apparel IPOs are creeping back up

It’s a welcome change for fashion, a highly discretionary industry that spent 2025 dealing with tariffs whiplash and strained consumer confidence. The dust has settled somewhat since then; apparel brands are seeing some tariff refunds, their consumers are still spending, and they’re becoming more efficient with AI. At the same time, fashion players are still feeling the effects of geopolitical tensions and an unstable oil supply. That means that — while some companies have managed to make their public-market debuts — the outlook for IPOs is still a bit uncertain depending on how market conditions and other macroeconomic factors continue to shake out, sources say.

IPOs, in general, exploded in 2021 as companies sought to take advantage of a soaring stock market, low interest rates and government stimulus. But, in the last few years, economic uncertainty made it a less-than-ideal time to go public. Tariffs, in particular, muddied the waters for consumer brands manufacturing abroad in markets like China. “It was very hard to gauge the run-rate earnings of companies when tariff rates were moving all over the place,” said Andrew Dunst, managing director at The Sage Group.

Tariffs have come down from recent highs, providing some relief for retail companies. The beverage brand Suja Life, for instance, managed to go public in May. Still, others, worried about volatility, have altered their timelines. 7-Eleven’s parent company ended up pushing back its IPO in North America because of economic pressures. And going public right now, even for major corporations, doesn’t guarantee success. SpaceX, whose June IPO was the largest public offering in history, erased almost $1 trillion in stock market value in five weeks.

AI companies are also sucking up a lot of oxygen — presenting a challenge for consumer companies in fashion or otherwise. Both OpenAI and Anthropic are expected to go public soon and are targeting $1 trillion exits. “With all these large names potentially going public at the same time, that brings up the question, ‘Is there enough institutional capital for everyone else?'” asked Emily Zheng, a senior research analyst at PitchBook.

Zheng mentioned that OpenAI, Anthropic and SpaceX, combined, “are raising more capital than all VC-backed IPOs in the last decade,” including Uber. It puts into context “how big these [three] companies really are,” she said. At the same time, if Anthropic and OpenAI go public, but don’t see their shares perform well, “It will be a much tougher environment for smaller names [to IPO],” Zheng said. “Right now, everyone’s just holding their breath.”

For some consumer companies, then, it might make sense to wait and see how the landscape plays out before moving forward with an IPO, a buyout or an acquisition. But other factors are complicating matters for companies looking for strategic exits, especially ones in the fashion world. One of the biggest issues? “The traditional apparel strategics are more looking inward these days, and they aren’t in a position to take big bets on businesses,” Dunst said.

For instance, under different conditions, Reformation may have been snapped up by, say, Capri, Dunst said. But the conglomerate is dealing with its own financial struggles, including the fallout from a failed merger with Tapestry. Going public, then, may be a good way forward for brands like Reformation, which is profitable, but also saw its net income decrease approximately $20 million from 2024 to 2025. “If you’re the sponsor, and if you want some liquidity in the near term, [an IPO] is probably your best bet,” Dunst said.

There is still healthy investor appetite for fashion brands, especially digitally-native ones, said Brandon Yoshimura, a managing director in Solomon Partners’ consumer retail division. Reformation, while a smaller company than other fashion players that have gone public (its 2025 net revenue sat at $507.1 million), recently posted 20 consecutive quarters of double-digit net revenue growth, per its S-1. Reformation’s shares were priced at the low end of the range, but “to me, a name like that going public is very encouraging,” Yoshimura said.

It’s also a good sign for other DTC brands that have seen strong sales and may be exploring a strategic exit, like Skims or Vuori, Yoshimura added. Quince, too, just surpassed $2 billion in sales. “Some of these privately-held businesses that are well north of $1 billion, versus in the hundreds of millions, may be too large to be M&A candidates,” Yoshimura said. “At which point, the public market, if you’re looking to monetize or for liquidity, becomes the most likely or highest-probability exit.”

Ultimately, questions remain about how many fashion companies — and consumer brands, more broadly — will pursue exits at this time. But those that have a loyal customer base and consistent sales are “set up for success” if conditions continue to improve, said PitchBook’s Zheng. Yoshimura added, “I think for great-scale businesses that have a lot of growth and runway in front of them, you will have public-market and private-market appetite.”

What we’re reading

• Nestlé is lobbying U.S. authorities to allow more layman’s terms (like “Vitamin C” over “ascorbic acid”) on packaging. (Reuters)
• Taco Bell is betting on $1 deals and new food options to win back customers amid the cyclospora outbreak. (Wall Street Journal)
• A step up: The Crocs brand topped $1 billion in quarterly revenue for the first time. (Retail Dive)

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