How Canadian retail phenomenon Aritzia weathered a rough patch to emerge stronger than ever
As the sun started to rise just after 6 a.m. on a Tuesday in late August, a lineup was already growing outside the Vancouver Convention Centre. Some had camped out overnight, travelling from as far as Washington state, and by midday hundreds of shoppers, mostly women, snaked along the waterfront promenade for what has become a venerated local tradition: the Aritzia Warehouse Sale.
Over eight days (including the coveted invite-only friends and family pre-sale), thousands of shoppers carted out bags stuffed with discounted sweaters, jeans, bodysuits and virally popular Super Puff parkas, later taking to social media to share their hauls, experiences and tips.
The sale, which started more than 20 years ago, has become a financial success for Aritzia Inc., bringing in $10 million in retail net revenue in 2024, and a subject of fascination for locals, who can even follow running updates on the state of the lineup on the Vancouver Sun’s website via a live feed from a nearby city traffic camera.
It’s emblematic of the cultish following Aritzia has developed, particularly among young women, who flock to its “everyday luxury” ethos.
Since being founded as a single Vancouver store in 1984 by Brian Hill, Aritzia has grown into a global retail phenomenon, with more than 140 stores in the U.S. and Canada, a thriving e-commerce business and $2.7 billion in annual net revenue.
In 2025, despite headwinds from the trade war, the company’s share price more than doubled, bringing its market cap to close to $14 billion, making it one of Canada’s most successful retail brands and best-performing companies.
But the story of Aritzia’s success hasn’t been entirely seamless. After years of blistering growth, including during the COVID-19 pandemic, the company found itself unable to keep up with demand. How Hill and chief executive Jennifer Wong navigated through that rough patch, maintaining the confidence of investors and analysts, helped set the stage for 2025’s surge.
The rise
About seven kilometres directly south of the site of the warehouse sale, in the former Oakridge Centre shopping mall currently undergoing redevelopment, Hill opened his first standalone Aritzia store in 1984.
Hill came by his fashion chops honestly: his family is well entrenched in Vancouver’s retail history. Brian’s grandfather, John Hill, purchased the second location of a dry goods store in 1945 and brought Brian’s father, James Hill, into the fold as a young man.
James and his brother Forbes bought the business in 1960 and transformed the store into Hill’s of Kerrisdale, which originally housed Aritzia before Brian struck out on his own at 23 years old.
Hill grew the Aritzia concept from the first Oakridge boutique into a handful of stores in Vancouver, and then started shifting its business model in the 1990s toward designing and manufacturing its own in-house fashion labels. His bet on carving out a niche in “everyday luxury” at an attainable price point paid off. Aritzia expanded nationally in 1999 and made its first push into the U.S. in 2007.
On the sidelines of the Real Estate Forum conference in Toronto in early December, Hill said one of the guiding principles of growing a retail business is “measure twice, cut once.” If you roll out something across multiple locations — whether it’s product supply chains or IT systems — and things go wrong, fixing it and starting over can be a big problem.
“It’s really important to make sure that when you’re running a business on the scale we are, that you get it as right as you possibly can the first time,” he said.
The Artizia of today has been built to Hill’s exacting standards.
Each boutique, as they’re exclusively referred to in Aritzia lingo, is designed by a team of in-house architects, with curated playlists blaring over store speakers. Sales associates are called “style advisors,” and the company famously shuns individual dressing room mirrors in favour of communal ones to draw shoppers out into better lighting and encourage interactions with staff.
With a stable of 10 in-house brands, Toronto-based stylist Erica Wark said Aritzia’s clothing has a sense of “timelessness” that appeals not only to younger trend-conscious consumers, but also to her clients in their 40s, 50s and 60s. She sees it as a “brand that can live anywhere,” with clothing for the office, workouts, weekends and special occasions.
“They’ve really cornered the market in terms of wardrobe essentials that are achievable from a price-point perspective, while also being well made and withstanding the test of time,” said Wark. “I think they’ve really mastered finding that sweet spot, which can be a real challenge for brands.”
When the COVID-19 pandemic hit Canada in March 2020, Aritzia was already ascendant, with 96 stores and $980 million in annual sales.
As the company joined retailers around the world in shuttering its brick-and-mortar locations, something remarkable happened: Despite 2020-21 being “the most challenging (year) in our history,” according to Hill, the retailer’s popularity, revenues and share price accelerated during the COVID-19 pandemic.
Aritzia’s net revenue dipped to $857 million in fiscal 2021 but more than doubled to $2.2 billion in fiscal 2023, as the company benefitted from surging e-commerce sales and its U.S. expansion strategy, growth that got a huge boost from swelling brand awareness as celebrities and social media influencers (both paid and unpaid) wore Aritzia’s clothes.
In 2022, Aritzia kicked off the year with its share price hitting a new high in January and closed it with a Black Friday sale that broke sales records both online and in-store.
In May, Hill passed the chief executive reins to Wong, praising her as “the most qualified fashion company executive in North America.”
Wong had started with the company in 1987 as a part-time seasonal sales associate and never left. Working alongside Hill in the days long before online shopping, social media marketing and massive flagships, Wong, who declined to be interviewed for this article, helped shape nearly every part of the company as she climbed the corporate ladder.
“She understands finance, logistics, fashion, retail, e-commerce, I.T., computerization; she has done it all,” said Hill.
But after three years of blistering growth, Aritzia was facing a challenge.
‘A victim of their own success’
In early 2023, a “confluence of factors” — some out of Aritzia’s control — hit the company all at once as it worked to keep up with unprecedented demand, said analyst Stephen MacLeod, managing director, equity research at BMO Capital Markets.
“They were, in a way, a victim of their own success, which laid bare some of these infrastructure and operational. I hesitate to call them ‘issues,’ but ‘factors’ that were a result of their strong growth,” he said.
To replenish extremely low inventory levels, Aritzia “ made the strategic decision to order future season buys earlier in order to build back its inventory base,” the company said in a release . In late 2022 and early 2023, lead times sped up and improved freight timelines meant a ton of inventory arrived earlier than expected — the cost of which (including temporary warehousing) weighed on gross margins.
Most of the product was also concentrated in what Aritzia calls “client favourites” or “proven sellers,” but the lack of “newness” among its assortment was unappetizing to customers.
“This was the first time that a lot of people heard that term from Aritzia, and that’s when we understood that not enough focus had been spent on innovation,” said Martin Landry, consumer and retail analyst and managing director at Stifel Nicolaus Canada Inc.
Fashion is a fickle industry, subject to shifting trends and consumer tastes along with macroeconomic factors such as inflation and interest rates that weigh on consumers’ wallets. Aritzia cited a “mixed consumer environment” as sales growth decelerated across all regions and geographies during the first week of June 2023.
It was the “perfect storm,” said Landry, and those headwinds weighed on the company’s stock, which dropped 24 per cent in a single day in July 2023 after its fiscal 2024 first-quarter earnings report.
When Aritzia’s fortunes slumped, Wong emphasized to analysts that the company was committed to “staying disciplined” and making progress in four areas: completing the build-out of “key spaces,” including new and expanded boutiques, flagship locations and a new 550,000-square-foot Toronto-area distribution centre; finishing key projects such as a point-of-sale upgrade and rollout of omnichannel services; catching up infrastructure to match Aritzia’s “explosive growth”; and optimizing economies of scale to generate cost efficiencies across the business.
Analysts say it took about a year for the company to work through the issues, but it made good on its word. Aritzia’s stock started to rise again in early 2024 after it got the right mix of products back in stores, and markdown levels and capital expenditures normalized.
When Aritzia reported its fiscal year-end results in March 2025, net revenue was up 19 per cent to $2.7 billion.
“One thing that I thought was striking at the time was when the company reset guidance, they always guided to a rebuild in fiscal 2025, and they’ve executed well against that guidance,” BMO’s MacLeod said. “They’ve done what they said they were going to do.”
‘Getting famous’ in America
Aritzia is also keenly aware of what many Canadian individuals and businesses know too well: to reach a new pinnacle of success, you need to make it in America.
With a well-established footprint in Canada, the company is candid about the fact that much of its growth plan hinges on expanding south of the border, or, as both Wong and Hill have put it, “getting famous” in the U.S.
Aritzia opened its first American boutiques in 2007 and has picked up the pace in recent years. Aritzia currently has more than 70 stores sprinkled across the U.S. and aims to add 10 new stores every year through fiscal 2027. The company previously identified the potential to have up to 150 American boutiques, but Wong said on a call with analysts in October that number might be closer to 180 to 200 over the long term.
Wong has said the company’s growing collection of boutiques is its “number one client acquisition tool” and has a “halo effect” on e-commerce sales.
“When we open a new store and a new market … all of the buzz around the flagship openings and the marketing around that does drive traffic to the e-commerce site,” Wong said on a call with analysts in early 2025.
Aritzia’s “newness factor” in the U.S., social media momentum and “everyday luxury” brand positioning are resonating with American consumers, MacLeod said.
“You’re getting high-quality products at prices that are 30 per cent to 40 per cent below some of the luxury players and 20 to 30 per cent above fast fashion players, but relative to fast fashion, you’re getting a much higher quality product,” he said.
Aritzia also fills a retail “white space,” the underserved market for workwear as women return to the office, said New York-based retail analyst Jessica Ramírez, co-founder and managing director of The Consumer Collective consultancy firm.
“There are more people going to in-person events. At the same time, because of pressures in the labour market here, you’re going to be scared for your job, so you dress to impress.”
Case in point: The Effortless Pant (trademarked by Aritzia), a high-rise trouser that debuted in 2019, sells for $158 and comes in a variety of colours, fabrics and lengths. A June 2024 Wall Street Journal article called it “a closet staple with a cult following among 20-something women in corporate America,” with Wong telling the newspaper that sales picked up in 2021 when many women started going back to the office.
Aritzia’s U.S. expansion strategy is paying off. American revenue surpassed Canadian revenue for the first time in fiscal 2023 and now makes up more than 60 per cent of the company’s net revenue.
Analysts see a long runway for the retailer’s growth in the U.S. In America’s much larger and more competitive market, it might take a while for Aritzia to achieve the same penetration that it built up over 40 years in Canada, said Landry.
“In Canada, it’s iconic and it’s got a huge following,” he said. “Maybe over a really long period of time Aritzia could aspire to have a similar penetration in the U.S. But I think that’s going to be over a generation, not in the next five years.”
‘The brand has crossed the ocean’
In early 2025, U.S. President Donald Trump’s trade war and tariffs on imported goods introduced a new level of uncertainty for the already logistically complex retail industry, which relies on an international network of sourcing, manufacturing, shipping, warehousing and delivery to get products into the hands of consumers.
Trump originally levied a 46 per cent tariff on goods from Vietnam, an important apparel manufacturing hub for companies including Aritzia, Nike Inc., Adidas AG, Gap Inc., Under Armour Inc. and Lululemon Athletica Inc. The rate was among the highest imposed on more than 50 countries included in Trump’s “Liberation Day” tariff announcement on April 2 but was later reduced to 20 per cent.
Trump also axed the de minimis exemption, a rule that allowed shipments under US$800 to enter the U.S. duty-free. For some retailers, the end of the loophole is proving costly. Fellow Vancouver retail giant Lululemon, already dealing with slowing sales and increased competition in the athleisure market, said in September that it expects a US$320 million net impact on its operating margin in 2026 due to tariffs and the removal of de minimis.
Aritzia’s business hasn’t been spared from the chaos of rapidly changing trade policies, but while others are fighting for survival, it has found a way to thrive.
Hill told the real estate conference that about 70 to 80 per cent of its e-commerce business is shipped from Toronto and Vancouver. But ahead of the de minimis loophole closing on Aug. 29, Aritzia shifted fulfillment of all U.S. orders to its distribution centre in Ohio, which it had already expanded before the trade war started.
Aritzia’s production is spread out across 13 countries on four continents, with most taking place in China, Vietnam and Cambodia. The company said earlier this year it is working to diversify its suppliers, including lowering the percentage of products sourced from China to the mid-single digits by the spring of next year.
In the meantime, Aritzia isn’t letting the upheaval slow its growth plans. With online sales booming and making up about one-third of Aritzia’s sales, the company is working on its “e-commerce 2.0” strategy, which Wong has called “the key to more than doubling our e-commerce revenue by fiscal 2027.”
The plan includes expanding its digital commerce platforms, including a revamped international e-commerce site that went live in August and the brand’s first-ever mobile app, which launched on Oct. 27, ahead of the busy holiday shopping season.
“It’s going to be a huge brand and sales generator, and effectively, it’s our digital flagship,” Wong said on a call with analysts just before the app launched.
Aritzia hasn’t announced plans for stores beyond Canada and the U.S. yet, but it currently ships to more than 220 countries worldwide.
“The brand has crossed the ocean, and I think that’s where the expansion comes. Next is Europe and maybe Australia and Asia. If you start looking internationally, then the growth runway is easily in excess of 10 years,” said Landry.
In its most recent earnings report on Oct. 9, Aritzia reported a 32 per cent increase in net revenue for the second quarter of fiscal 2026 compared to a year earlier, with retail sales growing 34 per cent to $571 million and e-commerce sales rising 26 per cent to $240 million. The retailer reported zero debt, $352 million in cash, and zero drawn on the company’s revolving credit facility.
As of late December, Aritzia’s share price was up 117 per cent year-to-date and more than 350 per cent over the last five years.
“It’s a stock that has a lot of momentum. It’s also graduating into a large-cap story, so now it’s attracting the attention of large-cap portfolio managers,” said Landry, adding that it is easy to buy and sell due to the public listing and thus hard to ignore for Canadian investment managers.
“They’ve got no bank debt and cash piling up on the balance sheet, so they are very well positioned to continue to grow, to continue to be successful both in-store and on the stock market.”
• Email: jswitzer@postmedia.com