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Equity Report

Aritzia – A Canadian Fashion Power House

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Company Overview

Aritzia is a vertically integrated, innovative design house of exclusive fashion brands, specializing in women’s fashion. They create, develop and sell women’s clothing and other fashion products, diversifying their product offerings to meet various customer needs and to adapt to the changing retail space. They design apparel and accessories for their collection of exclusive in-house brands, including Wilfred, TNA, Taula, Babaton, Community, SIXELEVEN. This unique business model provides a distinctive competitive advantage and enhances their ability to reach the customer and generate more sales.

Summary of Thesis

Aritzia has demonstrated commendable performance throughout its history. This is thanks to a skilled and experienced management team. By accepting and positioning itself alongside the latest trends, both in business and in fashion, Aritzia has managed to accelerate where other retailers have stalled.

Operational efficiency continues to fuel margin expansion and FCF growth – Aritzia has made significant developments in their supply chain and utilized industry relationships pushing top and bottom-line growth. Thanks to their unique position they have been able to outperform peers from an operational efficiency standpoint and will likely continue to do so.

Dominant position in the industry combined with diversified product offerings lowers short term risk and fuels long term growth – Aritzia currently holds an estimated 11.7% market share within the Canadian women’s fashion and retail sector. Thanks to their dominance Aritzia is able to push a variety of products and influence fashion trends rather than attempting to keep up with the latest fads.

Developed omnichannel platform outperforms competitors and assists in pivoting to adapt to the changing retail marketplace – Aritzia’s management has placed great emphasis on its eCommerce and omnichannel business aspects. Allowing it to withstand a tougher retail climate. Its award-winning system has helped to push their sales and has become a fully integrated aspect of the business. Providing both a competitive advantage over non-omnichannel competitors and a head start over those looking to develop a similar system.

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