How Aritzia Thrived During COVID-19 — & What's Next
In early March, when COVID-19 first began rearing its head around the world, few could imagine the toll it would take on the fashion industry. With storefronts closed and the masses sequestered indoors, brands of all sizes faced profound challenges — from laying off staff to pivoting their fashions around our new reality. Even with these difficulties, Canadian apparel brand Aritzia thrived during COVID-19, seemingly becoming an exception to the rule. The brand's mystifying success story has offered a glimmer of hope for brands who were harder-hit by the pandemic and looking for ways to rebuild. While it's managed to perform, the question of profound, lasting change continues to loom overhead.
Approximately a year before the pandemic started in North America, Aritzia's 97 boutiques were responsible for more than three quarters of the company's overall revenue. Consumers from New York to Vancouver were shopping for elevated, modern essentials IRL — until, of course, things changed. By Mar. 16, Aritzia had closed all its stores, working quickly to reroute its business through digital channels. Social distancing guidelines also meant that Aritzia, like many other brands, had to call off Spring/Summer 2020 collection shoots; a move that wound up inadvertently amounting to huge successes.
"We couriered the clothes to our models to photograph at home, and we were very pleased with the results," says Brian Hill, Chief Executive Officer of Aritzia, tells TZR. Not only did this aesthetic reflect consumers' stay-home reality, creating styles they could see themselves in — it also, in many ways, called upon the influencer-popularized It-girl aesthetic, through which Gen-Z millennials are used to shopping online. "The shift to models providing our images from their homes is working well for now, and seems to be continuing to resonate with our clients," says Hill. "We’ll take those learnings into account as we move forward." It was the culmination of this move, along with Aritzia's excellence in offering "Everyday Luxury," that enabled its e-commerce to grow in excess of 150 percent in just one quarter. Its collection of ribbed tanks, super-soft sweatsuits, and even easy tees and joggers have been seen on influencers and celebrities alike — and it's not hard to see why.
Through its omni-channel approach, Aritzia sold through the majority of its inventory (it had $15 million more remaining in inventory at this time last year), with a cash balance increase of $88 million. All of this transpired without having to lay off a single employee. Through the Aritzia Community Relief Fund (ACRF), all sales were donated to supporting Aritzia's staff and its families through COVID-19. Aritzia did not request any additional contribution from its customers beyond the entirety of sales for the limited time. While successful in keeping its team intact, the move received mixed reviews from its online community. "Y'all are a multimillion dollar company. Don't rely on consumers to do the job you should be doing. Support your people ... Most corporations have tons of money in reserve funds that could easily be used," wrote one user. "SHAME on Aritzia for using the people's money," wrote another. While most comments typically receive responses from the brand on social, the comments that pressed Aritzia on the directive went unanswered, with some users reporting that their comments were deleted.
"All companies plan for challenging times, however a global pandemic is well outside of normal business planning," Hill says in response to the feedback. "Like most companies, when the virus hit, our goal was to make every effort possible to keep our people employed so that we could continue to serve our customers." In addition to the sales revenue contributed to ACRF, the brand took a two-pronged approach internally — first, by temporarily cutting senior leadership's pay by 25 percent; and second, by forfeiting the cash portion of Board of Directors' fees, according to Aritzia's Q4 Results. To provide relief to frontline workers during this time, Aritzia donated $10 million of inventory through the Aritzia Community™ Care Program, which gifted 100,000 care packages of washable, low-maintenance garments designed for pre- and post-shift comfort to healthcare workers.
As Aritzia plans for the future, its new frontiers include opening more storefronts (now that, post-COVID, premier locations now have more compelling financial terms than ever), expanding into new categories (swim and intimates, among others), and procuring new talent. In the less-distant future, changes in new products could be seen as soon as next month, with its Fall/Winter 2020 collection launching in August. As for what customers can expect, Hill confirmed that a continued focus on Everyday Luxury will be paramount. "Our clients have faced a lot of change this year as a result of COVID-19 and the comfort and consistency of beautifully made clothes ... is an Aritzia constant they can count on."
The brand is also leaning in on its Diversity & Inclusion initiative, which is newly committing $1 million CAD to internal improvements. This comes after the brand faced allegations of anti-black racism from former employees, who reported that they had experienced microaggressions and disproportionate career immobility when compared to their white counterparts. Some also reported that staff used a system of acronyms to racially profile customers in retail stores. At this time, Aritzia is not working with organizations like the the Black In Fashion Council or EveryStylishGirl's Career Advancement Directory, but they are working with external D&I experts, as well as making a contribution to the NAACP and Black Lives Matter.
“... real change starts from within," says Jennifer Wong, President and Chief Operating Officer of Aritzia. "It has always been our vision to champion diversity in our communities ... While we celebrate the fact that women make up 85 percent of our team today, we recognize that there is more we can do to promote and equality and ensure broad representation." Wong declined to share any specific benchmark goals for achieving greater BIPOC representation in its corporate structure at this time.
Also on the topic of representation, Aritzia has faced criticism in the past for not offering a wide breadth of sizes. According to a 2017 study by International Journal of Fashion Design, Technology and Education, the AAW (Average American Woman) is a size 16-18. Aritzia's largest size offering is an 12, or, sometimes a 2XL — and, right now, Aritzia only has 10 items stocked in the Women's 2XL size, none of which show plus-sized models in the product shots. When asked if Aritzia has plans to expand its size offering to better represent the American shopper, Hill shares that there are plans to "offer this in some products." "We are in an unprecedented position to expand our product lines' depth, which includes sizes, length, colors, breadth, [and] new style developments ... We recognize that additional sizing choices will be important moving forward." As for what products shoppers can expect to see rolled out in expanded sizing, and when, Hill says “Once we’ve gauged the response to this collection, we’ll be able to assess further expansion.” This spring, the brand rolled out its Babaton collection, which offered up to a size 18 on a trial basis. Right now, size 18 is no longer in stock for any Babaton items on its site — the smallest listed for this line are a 12 and a 2X. The brand declined to comment on this shift in sizing.
While Aritzia has managed to survive and thrive in 2020 — a year that will be remembered for the acute challenges it's posed on all businesses — the brand's ability to remain profitable can, and should, be continued by raising the stakes on inclusivity. According to Bloomberg, the plus-sized market alone has $20 billion of buying power. Now, with scores of well-followed influencers wearing sizes 14 and above, the ability to represent this demographic through at-home shoots is entirely possible. In 2019, Black buying power reached $1.4 trillion, according to Selig Center for Economic Growth, and is expected to grow through to 2024. By working with organizations that have expertise in nonwhite representation, mending singed relations with Black consumers and radically pivoting its internal treatment of Black employees, the brand has the opportunity to grow authentically, so long as it is willing to change. To guarantee its continued success, Aritzia will need to going beyond beautiful products, glossy storefronts and new categories, and ensure, first, that the brand represents, makes space for, and champions all people.
This post has been updated from its original form for clarification.