Roots raises prices and cuts promotions ahead of Beaver Canoe relaunch
Canadian retailer Roots Corp. has raised prices and limited promotions as it faces continued inflation and prepares to reintroduce Beaver Canoe.
Roots President and CEO Meghan Roach said the chain had taken a small price increase on its core products and had seen “no impact on consumer buying behavior with us”.
“With a history spanning nearly five decades, Roots retains a large following of loyal followers and a very attractive customer base that has shown a willingness to pay,” she said on a conference call to discuss the results of the retailer’s first quarter.
It’s that dedicated clientele that the retailer is targeting with the return of the Beaver Canoe, a staple of the 1980s outdoor wardrobe with a diamond-shaped logo of a beaver and trees.
The brand will be relaunched this summer to celebrate its 40th anniversary, Roach said.
The Beaver Canoe brand was reintroduced ten years ago as part of its 30th anniversary and was briefly sold under license to Target Canada. Vintage Beaver Canoe clothing also continues to sell in online marketplaces.
The 2022 relaunch comes less than a year after MEC introduced its anniversary collection and brands like MAC Cosmetics launched 1980s-inspired products amid a wave of Stranger Things-inspired nostalgia.
The company, which sells apparel, leather goods, shoes and accessories, posted revenue of $43.1 million in its most recent quarter, down from $37.3 million in the same quarter. last year.
The increase reflects the full opening of all its stores during the quarter, compared to around 70% a year ago during a partial lockdown caused by the pandemic.
Roots has also cut promotions – the sales and discounts that typically erode margins in the retail industry.
“We haven’t really seen any significant pushback from customers since we removed promotions,” said Mona Kennedy, chief financial officer of Roots.
The company experienced higher input costs, with cotton price volatility and rising fuel and transport bills driving up costs.
“We took strategic price increases in the first half of the year and we could do that in the second year to offset (higher costs),” Kennedy said.
Overall, Roots posted a loss of $5.3 million in the first quarter, compared with a loss of $4.9 million in the same quarter a year earlier.
The loss was 13 cents per share for the quarter ended April 30, compared with a loss of 12 cents per share a year ago, the company said.
Direct-to-consumer sales were $37.4 million, down from $31.4 million a year ago, while partner and other sales totaled $5.7 million, down from 5.9 millions of dollars.
Roots said the slight decline was related to a reduction in the company’s Asian business in Taiwan, which was higher a year ago due to a change in the timing of bulk orders, partially offset by growth in sales. Roots-branded custom product sales to business customers and sales through TMall.com in China.
Meanwhile, the Toronto-based retail company is expanding the sizes it offers across its clothing collections.
This report from The Canadian Press was first published on June 14, 2022.
Companies in this story: (TSX: ROOT)
Brett Bundale, The Canadian Press