How JLo And Pandemic Fashion Helped Aritzia Increase Sales

Despite pandemic-related challenges facing all retailers, Aritzia, whose everyday luxury looks attract the attention of A-list celebrities like Jennifer Lopez, seems to be on the right track, reporting record-breaking third quarter earnings.

Citing “exceptional performance” throughout quarter despite the ever-changing pandemic landscape, including supply chain disruptions, shipping delays and labor shortages, Brian Hill, founder, chief executive officer and chairman of Aritzia, said he sees “extraordinary opportunities” in the retailer’s future.

The Canada-based retailer saw “outstanding client response” to the fall-winter collection, with expanded key product in new lengths and sizes, Hill said.

Net revenue increased by about 63%, or $175 million, to $453 million, up 70%, or $186 million, from two years ago. Sales for e-commerce increased almost 47% to $148 million and 162.2% from the third quarter last year. Retail revenue jumped 72% to $305.3 million, up almost 45% from 2020, tracking comparable sales growth of 58% and 26% from the third-quarter last year.

“Our retail came back stronger than pre-pandemic levels, and for the first time since the start of the pandemic, all of Aritzia’s boutiques were open for the entire duration of the quarter,” Hill said.

Retail sales exceeded expectations in the U.S. The retailer opened a new boutique in Nashville and expanded four boutiques with its Troy location breaking opening-day and opening-weekend sales, Hill said.

“Sales growth in the United States sustained unprecedented momentum, increasing 115% and representing 44% of our total revenue in the quarter,” Hill said, in the company release. “Our eCommerce business continued to surge, increasing 47% on top of the 79% increase we saw in the third quarter last year.”

“We are ‘the’ place to shop right now in the United States,” Hill noted.

The executive said, while “everything is working right now,” it’s about “50% of the way there.” The brand, founded in 1984 in Vancouver, is in the process of investing in social media and building that team, he said.

Still, there’s no disputing the power of a major celebrity social media endorsement.

Last month, Jennifer Lopez posted a photo of herself on her Twitter and Instagram accounts wearing the brand’s iconic Super Puff, in white, with the caption: “Cozy morning in my Super Puff, Thank you @Aritzia…I love it!” Hill acknowledged the post during the earnings call, saying the artist “did a little favor for us at the end of the year.”

In addition to collection launches, new product launches this year will include intimates and swim, Hill said.

In total, Aritzia has 106 stores, with 38 boutiques in the U.S. and 68 boutiques in Canada.

In reaction to the earnings, one retail analyst said the retailer is “firing on all cylinders.”

“They have carved out a unique customer positioning in the market around ‘Everyday Luxury,’ and through their segmentation into six distinct brands, have built an assortment that can address the customer’s needs Monday to Sunday,” said Kristin Kohler Burrows, senior director, Alvarez & Marsal Consumer and Retail Group, a global consultancy specializing in business transformation.

The analyst noted the brand’s expansion into the cozy and comfort category, perfectly mirroring consumer demand for more casual and relaxed, at-home pandemic-dressing, Burrows said.

“They have invested in digital capabilities like personalization, size optimization and convenient payment options, and are delivering a high-touch, elevated in-store experience. In sum, they are executing extremely well across every key element and have been able to meet the customer where she wanted and expected to be, in this Covid marketplace.”