In 2009 Yael Aflalo, a model turned fashion entrepreneur, opened a vintage clothing resale business she ran part time from the back room of a Los Angeles retail store. Called Reformation, it sold stylish secondhand items or garments made from re-purposed materials. In 2013, the brand was scaled into an e-commerce business with a downtown factory and three boutiques — a vision honed by Ms. Aflalo’s experience, gained earlier in her career, of the environmental and human toll the global fashion industry was taking.

“I want to build a ‘conscious’ mega brand that proves fast fashion and sustainability can coexist,” she wrote in a journal entry at the time. “I want to work with smart talented people, grow a sustainable manufacturing facility and revolutionize the fashion industry.” Several years on, fueled by USD 37 million in two rounds of funding raised from investors including Stripes Group, 14W and Imaginary Ventures, Reformation are projected to exceed USD 150 million in sales in 2019. The label is now a brand of choice for mindful female millennial shoppers who like its humorous and informative Instagram marketing and its celebrity following, and who are willing to spend between USD 60 and USD 550 on its flattering skater skirts, billowy blouses and floral dresses in eco-friendly fabrics.

This week, Permira , a global private equity firm and previous stakeholder in the luxury brands Hugo Boss and Valentino, said it would acquire a majority stake in Reformation. The deal is the latest in a series of transactions that underscore growing private equity interest in a new generation of contemporary fashion businesses. “We feel that the business has reached a stage where we need a significant partner in order to really grow and meet our ambitions, be it entering into new international markets or opening new stores or developing new product lines,” Ms. Aflalo said this week.

With few luxury opportunities left and millennials, price wars and the rise of e-commerce driving big changes in the retail and consumer market, private equity now appears to be trying its luck once again with contemporary fashion. So what sort of companies have become top targets? Consider the likes of the streetwear label Supreme, in which Carlyle made an investment in 2017, and the fashion e-commerce retailer, in which Apax Partners acquired a majority. Contemporary fashion brands with strong omnichannel sales and social media presence like Ganni, Isabel Marant, SMCP and The Kooples have been subject to a recent string of private equity stake building or buyouts.

With its banner “Sustainable Fast Fashion,” Reformation has an agile, Zara-like production model that was another major draw. The company produces 15 to 20 new styles on a weekly basis, with most of its clothing moving from sketch to store hanger in less than four weeks, rather than the six months of the conventional fashion cycle. This minimizes inventory waste and allows for constantly fresh items at a time when consumer appetite for newness is soaring and fits Aflalo’s words “I want altruism and narcissism to be combined.”