We’re NOT Shocked, Smh! Former Reformation CEO Yael Aflalo Deemed Not ‘Racist’ After Investigation

Yael Aflalo

CALIFORNIA, UNITED STATES — Last summer 2020, in the midst of Civil Rights protests accross the United States and around the globe, D.M. Fashion Book reported that  Reformation founder and chief executive officer Yael Aflalo had stepped down from her position following allegations of racism from past employees that emerged on social media (see it here).

The controversy started on May 30 when the brand’s Instagram posts and donations to Black Lives Matter generated a tirade of comments and posts about the company’s treatment of Black people. Elle Santiago, a former assistant store manager, posted about being overlooked for promotions, and said the company “consistently hired white women with the same or less qualifications over her.” She also detailed personal interactions with Aflalo, claiming that the founder would not look at her, and that senior managers resisted calls for diversity in the brand’s visuals, saying, “we’re not ready for that yet.” The post went viral, and was picked up by industry watchdog account DietPrada and other media outlets.

Aflalo also made a public-facing statement on Instagram with the headline “I’ve failed,” saying that the way she has practiced diversity is through the “white gaze,” and detailing how she would personally donate $500,000 to organizations working toward racial equality.

According to a spokesperson for Reformation, Aflalo, who sold a majority stake in Reformation to private equity firm Permira in 2019, was replaced by Hali Borenstein, current Reformation president.

The company also launched a third-party investigation, conducted by the law firm Morgan Lewis, to examine Aflalo’s behavior and the company culture.

On Friday afternoon, the findings of the investigation, seen by BoF and set to be released on the company’s website, were shared internally with staff at a town hall meeting. Representatives for both Reformation and Morgan Lewis declined a request for executive comment, but in a letter sent to Reformation employees and viewed by BoF, Borenstein outlined the work the company has already done to improve its culture as well as the new commitments it has made.

“These findings don’t reflect the Ref that we all aspire to,” Borenstein wrote. “However, they do provide us with a clear path forward and direction on where we should go next. This is not a quick fix and will require commitment and investment on several fronts.”

According to BoF, “Essentially, the report, the result of interviews with 46 employees across every part of the business, plus Aflalo, said that the environment at the company was not ‘racist,’ defined by Morgan Lewis as ‘making decisions and or treating others differently based upon race.'”

It also said that Aflalo did not act in a “racially motivated” fashion toward any employees. However, Aflalo’s behavior was inappropriate, the report found, and the culture at the company did not keep pace with the demands of a fast-scaling business.

“Employees who commented on this subject said that they do not believe that Ms Aflalo is racist,” read the report. “Various employees of all racial backgrounds reported, in similar fashion, that she had treated them in ways that were upsetting to them.”

The report did not provide specific examples but instead highlighted broader company issues, including a “cliquish” culture, a human resources department that was too small for the size of the business and facilities issues — including problems with heat, air conditioning and plumbing at the company’s retail stores. “Generally, the recurring themes from employees were that corporate did not appreciate how ongoing facilities issues were impacting them, and therefore did not give the issues the necessary attention,” it said.

Since Aflalo’s departure on June 12, Borenstein and the team have made operational changes that also happen to offer solutions to some of the problems highlighted in the new report. Monique McCloud, a Black human resources veteran with an expertise in diversity and inclusion, was hired as chief people officer. Along with creating platforms for employees at every level to have a chance to speak, seeking advice from outside sources such as the Black in Fashion Council, holding diversity, equity and inclusion courses and conducting more than 40 listening sessions with corporate, retail, distribution center and factory employees, the company has made concrete changes to policy.

Employee benefits packages were updated — with increased holiday, volunteering and vacation time. The most externally obvious change was a shift in marketing, with an emphasis on diversity not only in model choice but in behind-the-scenes talent and influencer.

The company also detailed further changes it plans on making, including improving the hiring process, expanding the human resources team and a pledge to spend more time developing internal talent.

Photos Credit: Celeste Sloman / New York Observer

Source: BoF