Aritzia reopened its flagship location at 50 Bloor Street West in Toronto last year after a major remodelling.Carlos Osorio/The Globe and Mail
Canadian retailer Aritzia Inc. will soon be offering expanded clothing sizes on a trial basis, saying it has recognized a shift in the fashion industry.
“There has been a push into more inclusivity throughout society and certainly in the fashion business. That’s not lost on us,” founder and chief executive Brian Hill said on a conference call to discuss the company’s third-quarter results on Thursday.
Currently, Aritzia’s core products go up to size 10 and sometimes size 12; Mr. Hill said the retailer would be offering up to size 18 to gauge customer response. The test will be conducted with Aritzia’s Babaton brand, starting in the spring and summer.
“We’re excited about that. We’re not sure it’s going to make a meaningful impact to our sales, but we think it’s the right thing to do for our customers,” Mr. Hill said.
Aritzia is not the first retailer to recognize that customers above size 12 do not want to be relegated only to specialty plus-size stores. In recent years, stores such as Nordstrom, American Eagle and J.Crew have been expanding their size offerings. In 2018, Walmart acquired plus-size e-commerce retailer Eloquii for a reported US$100-million. The same year, New York-based startup Dia&Co, which offers sizes 14 to 32, secured US$70-million in funding from venture-capital firms Sequoia Capital and Union Square Ventures.
In the U.S., where Aritzia is opening new stores and seeing strong sales growth, an estimated 31-million women are plus-size shoppers, according to market research firm Coresight Research. In a report in June, Coresight estimated that the women’s plus-size clothing market in the U.S. will grow 4 per cent in 2020 to US$31.9-billion.
“People don’t want to feel they have to shop at a specialty store that may have a stigma -- ‘plus size’ in fashion has not always been a positive thing,” said Jennifer Marley, a partner at retail consultancy Sklar Wilton and Associates in Toronto. “You want to be able to go to a store that reflects your style.”
The Babaton brand has been a vehicle for Aritzia to expand product offerings. In September, the company launched a new line called Ten, in an attempt to sell more evening wear. Ten was the retailer’s most successful launch ever, executives reported on Thursday.
One area where Aritizia is not expanding for now, however, is in men’s clothing. For the first time in 2019, it offered The Super Puff winter jacket for men and quickly sold out of most sizes. While he said the company will build out the men’s-puffer assortment next fall, Mr. Hill said this was not an indication that it would move into men’s fashion in a meaningful way in the near future, beyond potentially some more outerwear offerings. Women feel comfortable in Aritzia’s fitting rooms, where men are largely excluded, he said, and the retailer is cautious about changing this dynamic in its stores.
Aritzia’s net revenue grew 10 per cent in the quarter, to $267.3-million. Comparable sales – a measure that does not count growth from store openings but measures sales at stores open more than a year and in e-commerce – grew 5.1 per cent, and represented the company’s 21st consecutive quarter of growth. Its Black Friday promotion, the biggest sales week of the year, was the best in its history, the company said.
Aritzia’s stock price rose 17 per cent in trading on Thursday following the earnings report, closing at $24.03.
Net profit in the 13 weeks ended Dec. 1 was $34.8-million or 32 cents a share, compared to $32.6-million or 29 cents a share in the quarter the year before.
Aritzia’s sales growth was led by U.S. e-commerce purchases. Digital sales are gaining momentum as the company opens more U.S. stores, which are “powerful tools in building brand awareness,” Mr. Hill said.
“We’ve never been in a better position than we are now," he said. "… We have access to some of the best real estate available, with increasingly attractive financial terms.”
For example, after its two most recent store openings in Minneapolis and Denver, e-commerce sales doubled in both markets, he said. By the spring, Aritzia will have opened five new locations in the U.S. in a year and plans to accelerate its store growth.