How Private Equity Stumbled With Spanx While Reformation Thrives Before IPO

Spanx has become a cautionary tale of mismanagement after Blackstone sold it to creditors at a massive loss, while Reformation succeeded by maintaining brand identity and good products rather than chasing trends.

Summary of Phia’s Cookie Crumbles. Every timestamp links into the original audio.

The short version

• 00:17:24 — Blackstone acquired Spanx for $1.2 billion in 2021, but the company performed so poorly they sold it to HPS Investment Partners, which was also a creditor, essentially offloading it to recoup losses.
• 00:17:53 — Spanx’s profits dropped nearly in half since Blackstone’s initial investment, indicating serious operational struggles.
• 00:18:15 — The company cycled through five different CEOs since Blackstone took over, showing instability in leadership and vision.
• 00:18:52 — Recent strategies including licensing deals and off-price distribution through TJ Maxx and Ross hurt the brand rather than help it recover competitively.
• 00:26:00 — Reformation filed for an IPO targeting $1 billion valuation, a sharp contrast to Spanx’s decline, due to careful management by CEO Hallie and founder Yael Aflalo’s smart decision-making about control and funding.
• 00:29:45 — Reformation succeeded by building genuine product quality and brand affinity through actual clothes people want, not just founder reputation or marketing.
• 00:34:34 — Rabanne hired Olivier Roosting primarily for his social media following and celebrity connections to drive fragrance sales rather than build a strong ready-to-wear business.
• 00:39:22 — Victoria Beckham Beauty surpassed $100 million in annual revenue through strong product execution and careful brand management under CEO Lauren Edelman.

In depth

Why Spanx went from $1.2 billion prize to distressed asset

The Spanx story that Malik Morris broke is really a case study in what happens when private equity buys a category leader just as the ground shifts under it. Blackstone paid $1.2 billion for Spanx in 2021, and by last week the firm had effectively handed the company off to HPS Investment Partners, a subsidiary of BlackRock that was already a creditor to Spanx 00:17:24. That detail matters: this wasn’t a strategic sale to a new owner with a vision, it was a distressed handoff to the people who were already owed money, which Malik frames as Blackstone offloading the business to its own lender rather than finding a buyer who wanted it 00:17:43.

The numbers back up the bleakness. Profits are down nearly half from where they stood when Blackstone first invested, and revenue has fallen too 00:17:53. Malik ties this directly to Skims eating Spanx’s lunch — a newer, better-branded shapewear competitor that simply outmaneuvered the incumbent. Lauren pushes on why that happened, and the two land on culture and timing rather than product failure alone: shapewear needs have changed since Spanx launched in the early 2000s, and the brand name itself, while once functional and even endearing, doesn’t have the elegance of something like Skims for this era 00:20:18.

What make the case genuinely alarming, rather than just a story about competitive pressure, is the executive chaos. Five CEOs have cycled through since the 2021 acquisition, including one departure that the company didn’t even bother to announce publicly 00:18:15. Lauren and Malik agree this kind of churn signals no coherent strategy, and the moves that have been made — flirting with licensing deals, then pivoting to push volume through off-price retailers like TJ Maxx and Ross — look to both of them like short-term fixes that trade away brand equity for unit sales 00:18:52. Lauren is careful not to call the brand dead: she argues these things can turn around with the right leader and a clearer sense of what shapewear should mean now, name recognition being genuinely valuable, like Kleenex 00:21:57. But neither host thinks a rebrand is impossible; they just think nobody’s articulated what Spanx is for anymore, and until someone does, off-price will keep eating away at whatever’s left of its premium positioning.

Reformation as the counter-case: control, succession, and product discipline

Positioned almost as a foil to the Spanx mess, Reformation’s move toward a targeted $1 billion IPO valuation gives Lauren and Malik a chance to talk about what disciplined brand-building actually looks like 00:26:00. The contrast isn’t accidental in the conversation — one company got bought by a giant PE firm and cycled through five CEOs in four years; the other kept tight founder control and built a careful, unglamorous succession plan.

Lauren’s read on founder Yael Aflalo is that her real skill wasn’t creative direction so much as capital discipline. She recalls, without fully confirming it, that at one point Aflalo faced a potential down round and instead took out a second mortgage on her own home rather than dilute the company on bad terms 00:28:08. Whether or not every detail is precise, the larger point Lauren is making is that Aflalo protected how much control and equity she gave away at each stage, which set the company up to avoid the boom-bust ownership churn that hit Spanx. The transition to CEO Hallie gets the same treatment: not a dramatic putsch but a long internal apprenticeship, with some workplace-culture noise during COVID that both hosts treat as a footnote rather than the real story of leadership change.

The deeper argument, though, is about what actually generates brand affinity. Malik and Lauren draw a distinction between brands people love because of a founder’s persona or a marketing story, and brands people love because the product itself is simply good 00:29:45. Reformation, in their telling, has a light, slightly funny brand identity rather than an intense cult-of-founder one — nothing like Glossier’s centrality to a certain kind of customer’s identity — but it compensates by consistently making jeans and dresses people actually want to wear, reinforced by hiring a respected denim specialist. Lauren singles this out as the harder trick: being liked because of the clothes, not the myth around them, and she says that’s rarer and more durable than it looks. It’s a case, in their framing, for boring competence — tight financial control, patient succession, unglamorous product investment — succeeding where flashier, better-funded ownership structures failed.

When founder pedigree outruns the actual business idea: Phia and the affiliate-link graveyard

The Phia scandal gives Lauren and Malik their most skeptical stretch of the episode, and it’s aimed less at wrongdoing than at a structural problem in the shopping-tech space. Phia, the price-comparison app co-founded by Phoebe Gates, was accused — per a Bloomberg investigation — of a browser extension that replaced other affiliates’ tracking credit with its own, effectively siphoning commissions that rightfully belonged to other links across the ecosystem [1373, referenced via 1044 context]. Malik is careful to note this wasn’t targeting one platform; it was happening across the affiliate landscape broadly.

But the more interesting argument, made jointly, is that this type of company almost never works regardless of scandal. Lauren has been covering price-comparison widgets and browser tools since “the beginning of time,” as she puts it, and none of them have ever achieved real scale. The reason, both agree, is that the affiliate model only functions cleanly when attribution is simple and legible — you know exactly which influencer or creator drove a specific sale. That’s why ShopMy and LTK have succeeded where price-comparison plays haven’t: the causal chain from creator to purchase is transparent, whereas cross-platform price comparison muddies who deserves credit for a transaction, creating exactly the kind of gaming incentive that got Phia in trouble.

Lauren extends the critique to a pattern she sees among founders with famous parentage or inherited access, contrasting Phoebe Gates unfavorably with someone like Gabriela Hearst, who came from wealth but built a brand seen as substantively differentiated and personally driven. The implicit argument is that access alone doesn’t excuse a weak business thesis, and that Phia’s real news value came almost entirely from the Gates name, not from the app solving a problem the market actually needed solved. Lauren’s closing point is telling: if she were investing in this space, she’d rather back something addressing fashion’s chronic overproduction and inventory glut — a real operational pain point — than another affiliate-tracking layer competing for scraps in a market that’s shown, repeatedly, that it doesn’t scale.

Designer musical chairs: what Rabanne’s hire says about what these houses actually want

The appointment of Olivier Rousteing at Rabanne, replacing longtime designer Julien Dossena, becomes a lens for a broader argument about what luxury conglomerates are actually optimizing for when they pick a creative director. Lauren’s read is blunt: she doesn’t think this hire is about ready-to-wear commerciality at all. Rabanne’s core financial engine is its fragrance business, and she argues Rousteing was chosen less for his design point of view than for his roughly two million social media followers and his demonstrated ability to dress celebrities in ways that generate desire and visibility 00:34:34.

She draws a distinction between two very different skill sets that get conflated in fashion leadership: the kind of design-and-brand-vision talent that built something coherent and repeatedly interesting at a house like Balmain versus the kind of custom-atelier talent she thinks actually suits Rousteing’s strengths — bespoke client work, a small high-margin operation, not a scalable commercial engine. Her verdict is that Rousteing doesn’t feel positioned to be a truly modern commercial designer for a mass fragrance-driven brand, but that if Puig’s ambition is simply to generate visibility and celebrity desirability that indirectly lifts perfume sales, then the hire makes complete sense on those narrower terms.

This conversation sits inside a larger pattern the hosts trace across the industry: Richemont’s replacement of Peter Copping at Nina Ricci-adjacent house with rumored candidate Nicolas Di Felice, and Julien at Dries Van Noten all get folded into the same question — are conglomerates trying to replace a departing designer’s specific vision one-to-one, or are they optimizing for a different metric entirely (social reach, fragrance-ready visibility, brand stability)? Lauren argues Richemont, in particular, treats its smaller fashion houses as low priority relative to its jewelry and watch business, managing them conservatively rather than chasing hype. The unresolved tension across all these moves is whether

Summarised automatically. Listen to the original for the full conversation — this is not a substitute for it.