Monday, March 10, 2008

Oh (No!), Canada

By Emily Felker

Canadian fashion is on the slow decline. With our homeland brands selling out to American powerhouses, we are losing our fashion identity and becoming more and more dependent on America for our fashion requirements.
This past year marked another tragic decline in Canadian fashion. We began to lose one of our most successful companies to an American super seller. Lululemon Athletica is on the road to selling out. Lululemon was smart brilliant in finding their niche market, and then was able to appeal to the masses.
Undergoing enormous expansion from their one store in Vancouver to over 120 stores in North America, Japan and Australia lead to the inevitable, and merging with American investors. Lululemon sold to a US private equity firm, Advent International, for an estimated $225 million, giving Advent International 48% share of the name, later dividing this into public shares. Although Lululemon is commendable for keeping the slight majority Canadian owned, they did however begin to take the dive into giving up their Canadian status. They had the opportunity to rebuild a name for Canada, and put a brand out internationally that would remind the world that Canada still exists in the fashion world. We are losing our reputation in fashion and becoming the northern part of the USA, instead of distinguishing ourselves apart from them.
But retailers are not the only ones selling themselves to the States. We are the consumers are as well. Even though our market has been penetrated with many American retailers, we ourselves are taking our money to States where we can get more bang for our (high Canadian!) buck.
But it is ever so tempting to shop in the States. Markdowns are unreal, and merchandise is readily available and in a greater variety then we are used to. And pumping out fast, inexpensive fashion is not just a niche market, but a booming business taking over. There is much more variety and assortment, and many items that the Canadian market does not offer.
Even with regular priced merchandise Canadian shoppers will find a huge difference in price. Mark-ups in Canada can be as high as 60% on merchandise, whereas the USA usually averages in at 30%. One prime retailer guilty of this is Abercrombie & Fitch. In Canada items can be up to $20 more than if purchased in the USA. so really, if you can make the trip across the border to make these purchases, why wouldn’t you?
Most retailers (Victoria’s Secret, Macy’s, Dillard’s and many more) in the USA offer their own credit card, which in turn gives you a discount on your first purchase, and sometimes all to follow. So if you were sign up while shopping with the intentions of cancelling the card right after, you can save even more on your shopping trip. Caution: using the card may inhibit you to spend more than planned, this tactic is only for the strong willed.
American retailers will give you any reason to stay in their stores and shop. Service is much better in their stores, and with them throwing added discounts at you, it becomes harder to turn down and not to spend more.
While America bombards us with their brands, it does become a rarity to see Canadian merchandise in their stores. A certain smugness and prides comes with seeing Canadian designs present in their department stores. For instance, in Strongsville, Ohio Dillard’s has a large women’s section dedicated solely to the Nygard collection. It is complete with LCD monitors showing his designs as well as an impressive photo of Peter Nygard himself. There is Canada, making its stand. And in a big way. And let us not forget Lida Baday, who was able to make her stand in the American market.
But is there a consumer consciousness that will prevent us from shopping in the States? And do people really care whether or not they support Canadian fashions and retailers?
Unfortunately, I don’t think so. At the end of the day, it all comes down to the almighty dollar. If people can spend less and buy more, they will do so. Just seeing the price differences in the States are eye opening. And if people can shop there easily why not do so for the lower prices? On the other hand, seeing the differences in prices can cause frustrations in Canadian shoppers about their home shopping, because they don't understand why there are drastic price differences. Even with our dollar higher it has been in a long time, Canadian prices are hardly being adjusted. Some retailers (like The Bay) claim to be lowering their prices to accommodate our dollar, but it has been hardly noticeable.
The Canadian market needs to accommodate to our new-found higher dollar, and make the prices we pay for our merchandise more reasonable in comparison to the States. Our own fashion industry which although small but mighty, needs to be cultivated, in order to provide for Canada. We cannot completely ignore American fashion but it should supplement instead of supply our industry.

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