Christine Collet hadn’t heard of Aritzia until about a year ago, when she started to notice videos about the brand pop up in her TikTok feed.
Now, Aritzia makes up more than half her wardrobe.
“I ordered online, and ever since then I became obsessed,” said Collet, 23, a marketing co-ordinator and graduate student at Vanderbilt University in Nashville, Tenn.
Founded in Vancouver in 1984, Aritzia has long been a mainstay for Canadian shoppers, and has steadily grown its U.S. presence since opening two stores in Seattle and Santa Clara in 2007.
Christine Collet poses in a head-to-toe Aritzia outfit. The Nashville-based graduate student recently started buying clothes from the Canadian retailer after seeing it pop up on her TikTok feed. (Submitted by Christine Collet)
“It’s surprising to see a new fashion brand coming out of Canada, but it seems to be really working,” said Tim Calkins, a clinical professor of marketing at Northwestern University’s Kellogg School of Management in Evanston, Ill., who likened Aritzia’s American invasion to Lululemon’s in the mid-2000s.
That sales bump wasn’t a one-time fluke. In the last two years, Aritzia’s U.S. customers have tripled, executives told investors last fall, and today about half its business comes from the U.S. The brand has big plans to build on that success in the years ahead, according to those executives, and expects that its U.S. stores will outnumber its Canadian ones by the end of the 2027 fiscal year.
But experts say being crowned the hot new thing in retail can be a blessing and a curse. It means pressure for a business to grow ever more quickly without biting off more than it can chew, or becoming overexposed and losing its intrigue.
The pressure is heightened amid a slowing economy, tepid U.S. retail environment and unpredictable social media landscape, where consumers can tire of a brand as quickly as they jumped on its bandwagon.
“The challenge of growth is very simple,” said Calkins. “How fast can you grow and how do the numbers hold up as you do it?”
What’s driving the hype
Aritzia describes itself as “Everyday Luxury,” a category that sits somewhere between fast fashion and a full-on luxury brand. A popular bodysuit, for example, is priced at $58, while a wool turtleneck rings in at $168.
It’s a genre of retail that’s become more attractive in recent years, said fashion industry analyst Tamara Szames, as customers become willing to spend more to get a better, longer-lasting garment.
Part of what makes Aritzia unusual is that it isn’t just Aritzia. Underneath the brand name is a stable of in-house labels, each geared toward a slightly different customer.
Tamara Szames is industry advisor for Canadian retail at the NPD Group in Toronto. (Craig Chivers/CBC)
Someone who shops at Aritzia might wear Babaton into the office, TNAction to the gym and Sunday Best if they happen to be a stylish Gen-Zer. Two categories — Denim Forum and Super Puff — are dedicated to jeans and a particularly ubiquitous puffer coat. Aritzia has even gotten into menswear with the acquisition of the brand Reigning Champ.
By having such a wide range, Aritzia can appeal to different customers, or different aspects of a single customer’s life, said Szames, and tailor their assortment to shifting consumer demands — such as loungewear during the pandemic and going-out clothes more recently.
“They’re able to pivot and be agile — that’s to their advantage, because we know the consumer’s shifting quite fast in terms of what they need and what they want,” said Szames, who is executive director and industry advisor for Canadian retail at the Toronto-based NPD group.
AritziaTok
Like Collet, Lindsay Mosca of Montvale, N.J., says most of her wardrobe these days is from Aritzia — a store she’d never shopped at until a few years ago, when it started to pop up on her social media feed.
“The Effortless pants definitely were the thing that caught my eye,” said Masco, 29, referring to a pair of high-waisted crepe trousers trending in a big way on TikTok.
Lindsay Mosca of Montvale, N.J., is pictured wearing an Aritzia outfit. The Effortless pants trending on TikTok are what caught her eye, she says. (Submitted by Lindsay Mosca)
Aritzia didn’t make its CEO available for an interview with CBC News. But in a 2022 presentation to investors, the company describes customers as its “main marketing vehicle” — and notes their online conversations have been especially powerful.
On Reddit, members of a 26,000-person group debate product styles and share outfit photos. On TikTok, customers post online shopping hauls, styling tips and try-ons — though it’s not all positive. Customers also critique aspects of the retailer, such as its lack of individual change room mirrors and customerservice.
While word-of-mouth marketing is powerful, it’s also tough to wrangle, said Northwestern University’s Calkins. Customers like to talk about what’s new and interesting, and as a brand becomes more well-known it’s more difficult to keep the conversation going.
“Early on, you’re new, and you’re exciting, and that’s great and everybody wants to talk about [you],” said Calkins. “The longer you’ve been around, the less exciting you are.”
Retail analyst Doug Stephens says Aritzia has done many things right as a brand, but must resist outside pressure to expand too quickly in the years ahead. (Meredith Wight)
Doug Stephens, founder of the Retail Prophet, said growth in the physical realm can also pose a risk.
The more stores a retailer has, the more difficult it can be to replicate the same experience in each one (especially in vastly different labour markets), he said.
The larger the corporation is, the tougher it can be to respond to shifting customer preferences. And the more attention a brand gets, the more likely it is to reach a point of fatigue.
“When we look at brands, like Lululemon, for example, [that] have had sort of this meteoric level of growth, oftentimes it’s that very growth that conspires against their future success,” said Stephens.
Growth plans
In the near-term, Aritzia also faces pressure from inflation, executives said during its latest earnings call, along with higher warehousing costs after receiving an influx of merchandise ordered in the midst of COVID-19 supply chain issues.(During the call, the company’s CEO, Jennifer Wong, said she wasn’t concerned about this leading to greater markdowns.)
The rising cost of living has also squeezed consumers’ wallets. The Wall Street Journal reporting overall U.S. retail sales dipped slightly during the normally-busy shopping month of December.
Part of what makes Aritzia unique is its variety of in-house design brands, each geared towards a different customer or different aspect of a single customer’s life. (Erica Johnson/CBC)
While consumers of higher-end products tend to be more insulated from economic pressures than those who shop at budget retailers, retail consultant Sonia Lapinsky says there comes a point where even those shoppers may start to cut back.
“There’s definitely some security, having more of a premium product and luxury customer,” said Lapinsky, managing director of retail practice with the New York-based consulting firm AlixPartners.
“But I don’t think that means that [higher-end brands] are completely impervious to the challenges that many retailers are foreseeing ahead.”
In the longer-term, Aritzia has set a goal of opening between eight and 10 stores a year in the U.S. through 2027, according to its latest investor presentation — a pace that Stephens said isn’t unreasonable, if the brand can keep its eye on the ball.
“It comes down to responsible levels of growth and not just recklessly sort of bending to the whims of investors to grow in a way that is not responsible,” he said.
While most of Aritzia’s immediate expansion plans are focused on the U.S. market, Wong told investors last fall it’s just a sign of things to come.
“We believe in order to be a wildly successful and internationally-known brand, you have to be famous in the U.S.,” Wong said. “We will build a critical mass in the U.S. that sets us up for success internationally beyond 2027.”
Aritzia sets its sights on U.S. fame
Aritzia, the Vancouver-based women’s wear company that’s long been a mainstay in Canada, is exploding in popularity in the U.S. with plans for a major expansion south of the border. But experts warn that expanding too quickly could backfire.
Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
