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1Colombian Presentation
The Canadian Apparel Market
A Guide for Potential
Colombian Apparel Exporters
Prepared By
2Colombian Presentation
Purpose of today's presentation
Introduction
¨ Describe what a Colombian apparel supplier has to do in order to enter and be competitive in the Canadian apparel market
¨ Introduce Trendex North America
¨ Review the history of Colombian apparel exports to Canada
¨ Overview the Canadian retail apparel market
¨ Identify potential opportunities for Colombian apparel manufacturers in Canada
Colombian Presentation 3
An apparel marketing intelligence and consulting company focusing on the Canadian and Mexican apparel markets.
As an industry specialist Trendex offers companies unique value added insights based on both working with apparel retailers and suppliers and its continuous propriety research information services.
www.trendexna.com
Trendex North America
4Colombian Presentation
Source: Statistics Canada/ CIA Fact Book
What is Canada?
Canada World Rank
Colombia World Rank
Population (000) 34,568 #37 45,370 #29
Yearly Pop Growth Rate 0.78 #136 1.13 #104
GDP (U.S.$Trillions 2012) $1.4 #14 $0.5 #29
GDP Per Capita (U.S.$2012) $41,500 #27 $10,700 #112
Retail Apparel Sales (US$Mill) $27,420 - $9,600 -
Apparel Sales per Person (US$) $793 - $211 -
5Colombian Presentation
Source: Statistics Canada
Largest ProvincesOntario 13,472,000Quebec 8,028,000British Columbia4,606,000Alberta 3,847,000
Largest Metropolitan MarketsToronto 5,839,000Montreal 3,909,000Vancouver 2,420,000Calgary 1,265,000Ottawa 1,259,900Edmonton 1,196,340
What is Canada?
Colombian Presentation 6
CANADIAN TOTAL APPAREL IMPORTS($ Millions)
Source: Statistics Canada
$7,001$7,465
$7,874$8,429 $8,260 $8,231
$9,043
2005 2006 2007 2008 2009 2010 2011 2012
2012/2011Change
+0.8%$9,118
Canadian Apparel Importing Patterns
Colombian Presentation 7
0.8%
37.5%
10.9% 10.1% 7.7% 5.9% 5.8%4.4%
-7.3%-10.8%
Source: Statistics Canada
Cambodia BangladeshHondurasTotal Imports
ChinaVietnam India
Imports of Apparel Into CanadaJanuary – December 2012
Percent Change
Pakistan
14.6%
MexicoTurkeyUSA
Canadian Apparel Importing Patterns
Colombian Presentation 8
$4,279
$1,011
$592 $536 $398 $322 $288 $241 $197 $119
China Bangladesh UnitedStates
Cambodia Vietnam Mexico India Indonesia Italy Pakistan
IMPORTS OF APPAREL INTO CANADAJanuary – December 2012
($ Millions)
Source: Statistics Canada
Canadian Apparel Importing Patterns
9Colombian Presentation
Canadian Apparel Importing Patterns
Largest Latin America Apparel Exports to Canada2012 C$ (000)
Country Amount% Change 2012/2011
Mexico $322,307 +4.5%
Honduras $84,625 +7.7%
El Salvador $37,635 +49.2%
Guatamala $34,001 -7.9%
Peru $29,703 +13.3%
Nicaragua $26,102 +51.7%
Haiti $24,380 +36.5%
Dominican Republic
$19,548 +24.2%
Colombia $9,295 +16.1%
Costa Rica $5,914 -3.8%
Colombian Presentation 10
Colombia’s Apparel Exports to CanadaCanadian Dollars (000)
Source: Statistics Canada
$7,991$7,010 $7,194
$8,005
$9,295
2008 2009 2010 2011 2012
Canadian Apparel Importing Patterns
% Change2012/2011+16.1%
11Colombian Presentation
45.1%
38.0%
16.8%
0.2%
Distribution of Exports
Canadian Apparel Importing Patterns
Hosiery/Workwear/All Other
Women’s/Girl’s
Men’s/Boy’s
Colombia’s Apparel Exports to Canada2012 Canadian Dollars (000)
Children’s
12Colombian Presentation
Canadian Apparel Importing Patterns
Colombia’s Apparel Exports to CanadaCanadian Dollars (000)
Segment 2008 2009 2010 2011 2012% Change 2012/2008
Men’s $3,454 $2,641 $3,113 $3,262 $4,190 +70.7%
Women’s $2,611 $2,879 $2,570 $2,964 $3,700 +41.7%
Childrens $380 $223 $188 $216 $20 -95.0%
All Other $1,546 $1,267 $1,322 $1,563 $1,386 -10.4%
13Colombian Presentation
Canadian Apparel Importing Patterns
Largest Latin America Apparel Exporters to Canada2012 Dollars (Millions)
Country Sales
Mexico $194
Honduras $56
Haiti $22
El Salvador $18
Nicaragua $17
Dominican Republic
$14
Guatemala $13
Peru $12
Colombia $4.2
Country Sales
Mexico $62
Honduras $15
Guatemala $11
Peru $9
El Salvador $6
Nicaragua $5
Colombia $3.7
Dominican Republic
$3
Country Sales
El Salvador
$0.6
Guatemala $0.5
Mexico $0.4
Honduras $0.2
Colombia $0.2
Peru $0.1
Nicaragua $0.1
Dominican Republic
$0.1
Country Sales
Mexico $65
Honduras $12
El Salvador
$12
Peru $8
Nicaragua $3
Dominican Republic
$2
Costa Rica
$2
Colombia $1.4
Brazil $0.8
Men Women Juvenile All Other
Colombian Presentation 14
$9,295
$7,991
$7,010 $7,193$8,005
$1,449
$314$561$139$177
2008 2009 2010 2011 2012
Total Exports
Total Imports
Colombia APPAREL BALANCE OF TRADE WITH CANADA
Thousands of Dollars
Source:
Canadian Apparel Importing Patterns
15Colombian Presentation
What can be said about Canadian Apparel Manufacturers?
• The number of manufacturers and their sales have
decreased by 35% - 45% over the past ten years
Canadian Apparel Suppliers
Colombian Presentation 16
Canadian Apparel Manufacturing SalesSeasonally Adjusted (Millions of Dollars)
$3,610
$2,646
$2,213 $2,296 $2,246$1,933
2007 2008 2009 2010 2011 2012
% Change (N.A) (-27.2%) (-16.4%) (+3.8%) (-2.2%) (-13.9%)Previous Year
Canadian Apparel Suppliers
17Colombian Presentation
What can be said about Canadian Apparel Manufacturers?
• The number of manufacturers and their sales have
decreased by 35% - 45% over the past ten years
• Have changed from manufacturers to suppliers
• Are focusing increasingly on exporting with mixed
success
• Have become more marketing oriented
• Are totally dependent on the U.S. market, as they have
been unable to develop consistent sales in other
markets
Canadian Apparel Suppliers
Colombian Presentation 18
$917 $1,005 $1,001
$1,103 $1,245 $1,249
$1,104$1,447
$1,764$2,004
$954
$1,175
$2,208$1,982 $1,651
$1,305
2005 2006 2007 2008 2009 2010 2011 2012
Total Exports
United StatesExports
U.S. Share (89%) (88%)(91%) (85%)
TOTAL CANADIAN APPAREL EXPORTS($ Millions)
Source: Statistics Canada
(83%) (81%) (80%) (80%)
Canadian Apparel Suppliers
19Colombian Presentation
Canadian Apparel SuppliersLargest Canadian Apparel Suppliers
2012Company Products Channel Country
Gildan Underwear Discount U.S./Canada
Peerless Men’s Suits/sportcoats
Department U.S.
Nygard Women’s coordinates Dept/Spec/Disc Canada/U.S.
Levi Strauss Canada Jeans/casual pants Dept/Spec/Disc Canada
Point Zero Sportswear Dept/Disc U.S.
Roots Sportwear/activewear Dept/Spec Canada/U.S.
Hanesbrand Canada Lingerie/underwear Dept/Spec/Disc Canada
Warnaco Canada Jeans/lingerie Dept/Spec/Disc Canada
Fruit of the Loom Canada
Lingerie/underwear Discount Canada
Canadian Goose Outerwear Dept/Spec Canada/Developed Countries
Western Glove Jeans/outerwear Dept/Spec Canada/U.S.
Stanfield Underwear Dept/Disc Canada/U.S.
20Colombian Presentation
Merchandise Category Example
Fur coats Many small suppliers
Winter outerwear Canadian Goose
Mid priced suits and sport coats Peerless
Mid and better priced dress slacks Ballin
Women’s mid priced coordinates Nygard
Women’s mid/better priced women’s lingerie
Adorable/Arianne
Women’s tights/pantyhose Doris Hosiery
Men’s underwear Stanfield
Canadian Domestic Apparel Manufacturing Base
Canadian Apparel Suppliers
21Colombian Presentation
314
35
115
UnitedStates
Canada Mexico
$15.7
$1.4 $1.8
UnitedStates
Canada Mexico
NAFTA MARKET OVERVIEW2012
Population (Millions) GDP (U.S$Trillions)
Nafta Overview
22Colombian Presentation
$203,740
$27,420 $23,700
UnitedStates
Canada Mexico
NAFTA Overview
Total Retail Apparel Market2012 (US$ Millions)
Colombian Presentation 23
TOTAL APPAREL MARKET 2012 Dollar Sales
29.5%
20.7%
21.8%
3.8%
24.2%
17.5%
21.8%
53.8%
6.9%5.6%
30.1%
28.7%
10.7%1.7%
28.8%
United States Canada Mexico
Discount Stores
Sporting Goods Stores
Department Stores
Apparel Specialty Stores
All Other Outlets
NAFTA Overview
Colombian Presentation 24
CANADIAN RETAIL CHANNEL DEFINITIONS
DepartmentStores
DiscountStores
Better ClothingChains
Other Clothing Chains
Other NotableStores
Sears
The Bay
Walmart
Aubiererie
Superstore
Target
Winners
Giant Tiger
Croteau
Holt Renfrew
Harry Rosen
Femme de Carrier
H&M
Mark’s
Laura
Northern Reflections
Reitman’s
Simons
Zara
Costco
Sport Chek/Experts
*Store Only
NAFTA Overview
25Colombian Presentation
MásJoven
MásViejoEdad Media
Ingreso Familiar
MERCADO TOTAL MEXICANO DEROPA PARA DAMAS
2012Posicionamiento del Detallista
Bajo
Alto
Medio
Wal-Mart
Bershka
C&A
Liverpool
Suburbia
Sears
Coppel
Palacio de Hierro
Zara
Media
The Bay
Soriana
Comercial Mexicana
Bodega Aurrerá
Avon
Andrea
Ilusion
Price Shoes
Vicky FormMartí
Sears Canadá
26Colombian Presentation
TOTAL APPAREL MARKET 2012 Dollar Sales
Largest Retailers
NAFTA Overview
Canada
Walmart 10.1%
Sears 9.5%
The Bay 8.1%
Mark’s 5.8%
Winners 4.3%
Reitmans 3.8%
Old Navy 3.6%
H&M 3.3%
Gap 3.1%
Moores 2.5%
United States
Walmart 8.0%
J.C. Penney 7.6%
Target 5.9%
Kohl’s 3.0%
Sears 2.8%
Macy’s 2.7%
T.J. Maxx 2.5%
Kmart 1.8%
Nordstrom 1.7%
The Gap 1.3%
Mexico
Suburbia 10.6%
Coppel 5.7%
Liverpool 5.6%
Walmart 4.8%
Zara 3.2%
Sears 3.0%
Bodega Aurrera 2.7%
Soriana 1.4%
C&A 1.3%
27Colombian Presentation
How is Canadian apparel retailing different from American apparel retailing?
Compared to the United States, Canda:
• Has sales disproportionately smaller at the better end
of the market
• Has fewer channels of distribution
• Has a higher degree of retail concentration
• Has more promotional activity
• Has a higher percentage of independent apparel
retailers (especially in Quebec)
NAFTA Overview
Colombian Presentation
$15,232
$8,700
$1,503 $1,321 $666
TotalMarket
Women Men Girls Boys Infants
CANADIAN TOTAL APPAREL MARKET2012 Estimated Canadian Retail Dollar Sales
(C$Millions)$27,422
Canadian Retail Apparel Market
28
Colombian Presentation 29
TOTAL CANADIAN APPAREL MARKET Retail Dollar Sales
January - December
18.0%
50.6%
23.1%
2.7%5.6%
17.9%
51.2%
22.4%
2.9%5.6%
17.7%
52.7%
22.1%
3.2%4.3%
17.5%
53.8%
21.8%
3.6%3.3%
2009 2010 2011 2012
Discount Stores
Sporting Goods Stores
Department Stores
Apparel Specialty Stores
All Other Outlets
Canadian Retail Apparel Market
30Colombian Presentation
Total
Men
Women
Juvenile
Department Stores
17.5%
18.0%
18.5%
13.8%
Discount Stores
21.8%
18.7%
19.0%
40.4%
Apparel Specialty Chains
48.1%
47.8%
50.4%
31.7%
Independent Specialty Stores
5.7%
4.3%
6.0%
4.1%
Sporting Goods/Pro Shops
3.6%
5.1%
2.2%
3.0%
All Other Outlets
3.5%
6.1%
3.9%
6.2%
Total
100%
100%
100%
100%
Canadian Apparel Market2012 Retail Dollar Share
Canadian Retail Apparel Market
Colombian Presentation 31
TOTAL CANADIAN APPAREL MARKETJanuary - December 2012
Retail Dollar Sales
Retail ConcentrationRetail Concentration Largest Ten RetailersLargest Ten Retailers
Top Ten Retailers All Other
Retailers
WalmartSears (Total)The BayMark’sWinnersReitman’sOld NavyH&MGapMoores
46%54%
10.1%9.5%8.1%5.8%4.3%3.8%3.6%3.3%3.1%2.5%
Canadian Retail Apparel Market
32Colombian Presentation
Men
Women
Juvenile
Mark’s
Sears
Walmart
Sears
Walmart
Zellers
The Bay
The Bay
Sears
Walmart
Winners
Children’s Place
Moores
Reitmans
Winners
Zellers
H&M
Old Navy
Winners
La Senza
Superstore
Canada’s Largest Apparel Retailers 2012 Retail Sales
Canadian Retail Apparel Market
33Colombian Presentation
Young Older
IncomeCANADIAN WOMEN’S APPAREL MARKET
2012
Low
Average
Average
High
WinnersThe Gap
Old Navy
H&M
Walmart
Sears
Superstore
Mark’s
The Bay
Age
Penningtons
Aeropostale
Independent Retailers
Holt Renfrew
Reitmans
CostcoBanana Republic
Laura
Le Chateau
Garage
Dynamite
Canadian Retail Apparel Market
Mexx
34Colombian Presentation
Young Older
IncomeCANADIAN MEN’S APPAREL MARKET
2012
Low
Average
Average
High
WinnersThe Gap
Old Navy
Sport Chek
Walmart
Sears Retail
Superstore
Mark’s
The Bay
Age
Costco
American Eagle
Harry RosenHolt Renfrew
Moores
Zellers
Tip TopBanana Republic
Eddie Bauer
Le Chateau
Canadian Retail Apparel Market
35Colombian Presentation
Retailer
StoresMark’sReitmansLe ChateauSuzy ShierLa Senza*Northern Reflection*PenningtonsSmart SetGarageRickis*StichesLa Vie En RoseMoores*Addition ElleJacobTip TopMexx*
3843622411901851601521501471421361281181161029991
Canadian Retail Apparel Market
Largest Apparel Specialty Chains2012 Stores
*Foreign Owned
36Colombian Presentation
Men
Women
Juvenile
Unisex
Mark’s 384Moores 119Tip Top 99Randy River 39International Clothiers 32Jack & Jones 31Ernest 27George Richards 23Mr. Big & Tall 19
Reitman’s 362Suzy Shier 190La Senza 185Northern Reflections 160Penningtons 152Smart Set 150Garage 147Rickis 142La Vie En Rose 128
Children’s Place 85Gymboree 39Bonnie Togs 37Clement 30Carters/Osh Kosh 28Souris Mini 28OK Kids 24Siblings 23
Le Chateau 241Stiches 136Bluenotes 125Warehouse One 113Bootlegger 93Mexx 91Danier Leather 89Urban Planet 88
Canadian Retail Apparel Market
Largest Apparel Specialty Chains2012 Stores
37Colombian Presentation
% of Dollar Sales
Merchandise Category 2008 2009 2010 2011 2012
Men's Outerwear 12.2% 12.9% 14.3% 14.4% 13.9%
Men's Suits, Sport Coats 9.2% 8.9% 8.6% 9.4% 9.2%
Men's Pants and Tops 55.3% 54.4% 53.3% 52.8% 54.3%
Men's Underwear, Sleepwear & Socks 8.3% 8.3% 8.1% 7.2% 7.5%
Other Men's Clothing 5.7% 5.9% 6.1% 5.8% 5.6%
Men's Accessories 9.3% 9.6% 9.6% 10.4% 9.5%
100% 100% 100% 100% 100%
Source: Statistics Canada
Canadian Retail Apparel Market
Canadian Men’s Apparel SalesRetail Dollar Sales
38Colombian Presentation
% of Dollar Sales
Merchandise Category 2008 2009 2010 2011 2012
Women's Outerwear 10.5% 8.8% 9.1% 10.3% 10.5%
Women's Dresses & Suits 7.5% 8.1% 7.6% 7.3% 7.6%
Women's Skirts, Pants & Tops 56.8% 57.5% 57.2% 57.0% 55.2%
Women's Hosiery 2.8% 2.7% 2.5% 2.5% 2.5%
Women's Lingerie 10.9% 11.1% 11.2% 10.4% 9.9%
Other Women's Clothing 3.3% 3.7% 4.3% 4.5% 5.1%
Women's Accessories 8.2% 8.1% 8.1% 8.0% 9.2%
100% 100% 100% 100% 100%
Source: Statistics Canada
Canadian Retail Apparel Market
Canadian Women’s Apparel SalesRetail Dollar Sales
39Colombian Presentation
Canadian Apparel Retailer Profile
Department StoreSales (2011) C$4.3 Billion
Stores 118 Department Stores48 Sears Home Stores269 Sears Dealer Stores11 Outlet Stores
Headquartered Tornoto, Ontario (416) 362-1711www.sears.ca
Strengths Women’s Intimate Apparel, Women’s Plus and Petite sizes, Men’s Workwear, Private Label brands
National Brand/Private Label Apparel Ratio
45%/55%
Private Labels Nevada, Jessica, Arnold Palmer, Kenise, Mac & Jac, Protocol
Possibility of Sourcing from Colombia
30% - 40%
Sears Canada
40Colombian Presentation
Canadian Apparel Retailer Profile
Department StoreSales (2011) C$3.2 Billion
Stores 90
Headquartered Toronto, Ontario(905) 792-4400www.hbc.com
Strengths Men’s SuitsBrand SelectionPrivate LabelsJoint Venture with Top Shop/Top Man
National Brand/Private Label Apparel Ratio
90%/10%
Private Labels Hudson North, Black & Brown, Hudson Bay Signature
Possibility of Sourcing from Colombia
20% - 25%
The Bay
41Colombian Presentation
Canadian Apparel Retailer Profile
Discount StoreSales (2011) U.S.$22.4 Billion
Stores 209 Walmart Supercenters170 Walmart Stores
Headquartered Toronto, Ontario(905) 821-2111www.walmartcanada.ca
Strengths Apparel basicsChildrenswearLow price perception
National Brand/Private Label Apparel Ratio
10%/90%
Private Labels George, g21, Athletic Works
Possibility of Sourcing from Colombia
10% - 15%
Walmart Canada
42Colombian Presentation
Canadian Apparel Retailer Profile
Apparel Specialty Store Reitman’s CanadaMontreal Quebecwww.reitmans.caSales (2012) C$1.1 BillionStores Total 959 Stores
Stores Banner Type
363 Reitman’s Women’s
167 Pennington’s Women’s Plus Size
163 Addition Elle Women’s Plus Size
68 RW & Co. Unisex
152 Smart Set Younger Women
76 Thyme Maternity
National Brand/Private Label Ratio
0%/100%
Possibility of Sourcing from Colombia
5% - 10%
43Colombian Presentation
Canadian Apparel Retailer Profile
Apparel Specialty StoreSales (2011) C$1.02 Billion
Stores 386
Headquartered Calgary, Alberta(403) 255-9220www.marks.com
Strengths Men’s Causalwear, Men’s Workwear, Scrubs/healthcare apparel, Work/safety footwear, Product Innovation
National Brand/Private Label Apparel Ratio
10%/90%
Private Labels Denver Hays, Wind River, Clothes That Work, Dakota, Mountain Gear, Work Pro
Possibility of Sourcing from Colombia
15% - 20%
Mark’s
44Colombian Presentation
Canadian Apparel Retailer Profile
Apparel Specialty StoreSales (2011) C$750 Million
Stores 8
Headquartered Quebec City, Quebec(418) 692-3630www.simons.ca
Strengths Casual WearPrivate label18 – 29 year old segment
National Brand/Private Label Apparel Ratio
10%/90%
Private Labels Simons, Contemporaine, Guepiere, Le31, Lingerie twik
Possibility of Sourcing from Colombia
10% - 15%
Simons
45Colombian Presentation
Canadian Apparel Retailer Profile
Apparel Specialty StoreSales (2011) C$400 Million
Stores La Vie En Rose 91La Vie En Rose Aqua 23La Vie En Rose Outlets 40
Headquartered Montreal, Quebec(514) 256-9446www.lavieenrose.com
Strengths Private Label LingerieSwimwear
National Brand/Private Label Apparel Ratio
5%/95%
Private Labels La Vie En Rose
Possibility of Sourcing from Colombia
20% - 25%
La Vie En Rose
46Colombian Presentation
Canadian Apparel Retailer Profile
Apparel Specialty StoreSales (2011) C$44 Million
Stores 52
Headquartered Ste-Julie Quebec(450) 449-1310www.bikinivillage.com
Strengths Swimwear (largest swimwear specialty chain), Beachwear
National Brand/Private Label Apparel Ratio
85%/15%
Private Labels Bikini Lounge
Possibility of Sourcing from Colombia
10% - 15%
Groupe Bikini Village Inc
47Colombian Presentation
Canadian Apparel Retailer Profile
Sporting Goods StoreSales (2011) C$1.55 Billion
Stores Total 534Athlete’s World 48Atmosphere 62Sport Chek 165Sport Mart 41
Sports Experts 71The Tech Shop 3National Sports 18Intersports 47
Head-quartered
Calgary, Alberta(403) 717-1400
www.fglsports.com
Strengths Number of Stores Largest seller of sports apparel
National Brand/Private Label Apparel Ratio
85%/15%
Private Labels
Firefly
Possibility of Sourcing from Colombia
10% - 15%
FGL Sports Ltd.
48Colombian Presentation
Canadian Apparel Retailer EnvironmentCompared to the U.S. apparel retailers Canadian apparel retailers:
• Have chains with a fewer number of stores
• Are less dependent on their POS data for
decision making purposes
• Have not been able to build their private labels
into true private label brands
• Are not leveraging social media for marketing
• Have either no loyalty programs or the ones
they have do not effect a consumers shopping
behavior
• Charge higher prices/have greater margins
49Colombian Presentation
Canadian Apparel Retailer Environment
Why are prices higher in Canada than U.S.?
• Protectionist policies between Canada and other
countries and between Provinces
• Less advantageous economies of scale
• Higher transportation costs
• Bilingual packaging requirements
• Higher mall rents
• Higher labor costs for retail workers
• Less competition
50Colombian Presentation
Trend’s in Canadian Apparel Retailing
• Increasing presence of international retailers
Colombian Presentation
American European
Trends in Canadian Apparel Retailing
Abercrombie & Fitch
Aeropostale
American Apparel
American Eagle
Ann Taylor
Anthropoligie
Banana Republic
BCBG MaxAzria
Bebe
Brooks Brothers
Carters
Children’s Place
David’s Bridal Shop
Eileen Fisher
Forever 21
Oakely
Old Navy
Pink
Talbots
The Gap
Tommy Bahama
Tommy Hilfiger
Tory Burch
True Religion
Urban Behavior
Urban Outfitters
Victoria Secret
7 For All Mankind
Benetton
Escada
H&M
Jack & Jones
Lacoste
Mango
Olsen Europe
Scotch & Soda
Steilmann
Top Shop
Zara
A. Increasing Presence of International Retailers
Gymboree
Hollister
Hot Topic
J.Crew
Jones New York
Juicy Couture
Justice
La Senza
Lucky Brand Jeans
Maurices
Mexx
Michael Kors
Moores
Motherhood
51
Colombian Presentation
U.S. Retailers in Canada
52
2013 2014
53Colombian Presentation
• Increasing presence of international retailers
• Declining share of department stores and independent specialty retailers
• Increasing share of private label apparel brands
Trend’s in Canadian Apparel Retailing
Colombian Presentation 54
Private Label Growth
Trend’s in Canadian Apparel Retailing
Colombian Presentation
43.6%47.8% 47.4% 45.2% 44.1%
56.4%55.9%54.8%52.6%52.2%
2008 2009 2010 2011 2012
Canadian Total Retail Apparel Market
Dollar Share
Private Labels
National Brands
Canadian Retail Apparel Market2012 Dollars
Private Label’s Market Share
47.3%66.2%
49.5%
Men Women Juvenile
55
Increasing Share of Private Label Brands
Trend’s in Canadian Apparel Retailing
56Colombian Presentation
• Increasing presence of international retailers
• Declining share of department stores and independent specialty retailers
• Increasing share of private label apparels• Emergence of new apparel sectors
Trend’s in Canadian Apparel Retailing
Colombian Presentation
2009 2013(E)
23% 21%
2% 5%
67% 60%
2% 6%6% 8%
Mass
Middle
LuxuryApparel Segment
Canadian Apparel MarketDistribution of Retail Sales
57
Better
Fast Fashion
Source: Trendex
Trend’s in Canadian Apparel Retailing
58Colombian Presentation
• Increasing presence of international retailers
• Declining share of department stores and independent specialty retailers
• Increasing share of private label apparels• Emergence of new apparel sectors
• “Fast Fashion” effecting all facets of the market
Trend’s in Canadian Apparel Retailing
Colombian Presentation 59
Trends in Canadian Apparel Retailing
Growing Importance of Fast Fashion
60Colombian Presentation
Retailers Total Atlantic Quebec Ontario PrariesBritish
Columbia
Forever 21 25 - 5 12 4 4
H&M 61 2 14 30 8 5
Zara 19 - 7 7 3 2
Fast Fashion/Supply Chain
Canadian Fast Fashion Retailers
Trends in Canadian Apparel Retailing
61Colombian Presentation
$424$383 $364
$298$247
2012 2011 2010 2009 2008
H&M Canada Total Revenue C$ (Millions)
Total Sales +10.0% +5.2% +19.6% +20.3% +22.4%Stores 61 58 55 52 43Sales Per Store $6,956 $6,488 $6,494 $5,737 $5,766 (000)
Trend’s in Canadian Apparel Retailing
62Colombian Presentation
• Increasing presence of international retailers
• Declining share of department stores and independent specialty retailers
• Increasing share of private label apparels• Emergence of new apparel sectors
• “Fast Fashion” effecting all facets of the market
• Small but increasing share for internet retailing
Trend’s in Canadian Apparel Retailing
Colombian Presentation
$1.1
Canada U.S.
$0.37
Canada U.S.
$34.2
$7.8
E-Commerce Sales of Apparel/Accessories
2011 US$ Billions
E-Commerce Sales of Footwear
2011 US$ Billions
63
Trend’s in Canadian Apparel Retailing
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Canadian Consumer Apparel BehaviorWhat can be said about a Canadian consumers apaprel purchasing behavior:
• Price Sensitive
• Driven by promotional activity
• Looks for value
• Not loyal to any retailer
• Cross channel shopper
• Is not concerned with the country of origin
• Shops in the U.S., affected increasingly by U.S.
apparel trends/media
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Canadian Market Entry Plan
Phases
I. Research the market / Identify a niche
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Identify a possible niche in terms of
• Products
• Price Points
• Styling
• Fabrications
• Retail Channels / Retailers
Canadian Market Entry Plan
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142
$1,500
Units Dollars
Estimated Sales (Millions)
27.2%
28.2%
39.7%
4.9%
Retailer Stores
Walmart 379
Sears 118
La Senza 159
La Vie En Rose
91
The Bay 90
Penningtons 167
Addition Elle 163
Jacob 123
Lilliane Lingerie
32
Costco 82
Dept Stores
Discount Stores
Apparel Specialty Stores
All Others
Canadian Women’s Lingerie Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
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26,600
$990,100
Units Dollars
Estimated Sales (000)
13.8%
20.4%
62.4%
3.4%
Retailer Stores
Walmart 379
Sears 118
Mark’s 386
The Bay 90
Penningtons 167
Reitman’s 361
Winners 222
Old Navy 65
Bootlegger 95
Garage 147
Dept Stores
Discount Stores
Apparel Specialty StoresAll Others
Women’s Jean Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
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20 62
Average Age
Average Price
CANADIAN WOMEN'S JEANS MARKETJanuary - December 2012
Retailer Positioning
Low
Average
41
Sears Retail
The Bay
Wal-Mart
Winners
Mark's
NorthernReflections
Old Navy
AmericanEagle
Bluenotes
Stitches
Bootlegger
The Gap
Levi 1850Holt Renfrew
Costco
Mexx
Le Chateau
High
Garage
Dynamite
Pennington’s
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22,930
$696,260
Units Dollars
Estimated Sales (000)
15.4%
29.9%
50.0%
4.7%
Retailer Stores
Walmart 379
Sears 118
Mark’s 386
The Bay 90
American Eagle
94
Winners 222
Old Navy 65
Costco 82
Bluenotes 125
Bootlegger 95
Dept Stores
Discount Stores
Apparel Specialty StoresAll Others
Men’s Jean Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
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19 59Average Age
Average Price
CANADIAN MEN'S JEANS MARKETJanuary - December 2012
Retailer Positioning
Low
Average
39
Sears Retail
Sears Catalog
The Bay
Wal-Mart
Harry Rosen
WinnersMark's
Bluenotes
Bootlegger
The Gap
Levi 1850
Costco
Old Navy
Levi's Only Stores
Stitches
AmericanEagle
High Holt Renfrew
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1050
$33,000
Units Dollars
Estimated Sales (000)
14.0%
18.3%
30.0%
28.2%
9.5%
Retailer Stores
Forzani Group 480
Sears 118
Walmart 379
Winners 222
The Bay 90
Mark’s 386
Mountain Co-op
14
Roots 115
American Eagle
80
Old Navy 65
Costco 82
Dept Stores
Discount Stores
Apparel Specialty Stores
All Others
Men’s Swimsuit Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
Sporting Goods Stores
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1,980
$222
Units Dollars
Estimated Sales (000)
25.6%
15.9%
43.5%
15.0%
Retailer Stores
Sears 118
Bikini Village 52
Walmart 379
The Bay 90
Forzani Group 480
Penningtons 167
La Vie En Rose Aqua
23
Roots 115
Costco 82
Winners 222
Dept Stores
Discount Stores
Apparel Specialty StoresAll Others
Women’s Swimsuit Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
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53,185
$248,380
Units Dollars
Estimated Sales (000)
21.6%
46.8%
26.3%
5.3%
Retailer Stores
Walmart 379
Sears 118
Mark’s 386
The Bay 90
Costco 82
Winners 222
Giant Tiger 205
Simons 8
Real Canadian Superstore
111
Dept Stores
Discount Stores
Apparel Specialty StoresAll Others
Men’s Underwear Market2012 Largest Retailers
Channels
Canadian Market Entry Plan
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Canadian Market Entry Plan
Phases
I. Research the market / Identify a niche
II. Develop a USP
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Canadian Market Entry Plan
FACT
Critical to success in the Canadian apparel market is identifying your company’s USP and developing a Canadian marketing plan
Phase II – Develop a USP
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What is the need that we satisfy? What is our Raison d’être?
What is our core competence? What are we really good at?
Developing a Unique Selling Proposition (USP)
What can we legitimately claim to be better at than anyone else?
Canadian Market Entry Plan
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Colombia’s Possible Strategic Advantages as An Apparel Supplier to Canada:
• Proximity/speed to market (Just In Time Delivery)
• Flexible quantities/small runs
• Free Trade Agreement with Canada
• Reputation for denim and fashion men’s
underwear manufacturing and needlework
capabilities
• Experience in dealing with U.S. apparel retailers
If your company cannot legitimately claim one or more of these strategic advantages…
Canadian Market Entry Plan
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Canadian Market Entry Plan
Save your Money and
Stay HomeHowever, if your company has demonstrated a competitive advantage(s) in the U.S. apparel market it will almost certainly have the same advantage(s) in the Canadian market.
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Dealing with Canadian ProspectsIf a Branded Manufacturer
• Offer exclusivity• Offer marketing support money• Offer to warehouse product in Canada
If a Private Label Manufacturer• Always quote in U.S. dollars• Emphasize small quantities/speed to
market/flexibility
Canadian Market Entry Plan
In either case small minimums and speed to market will be seen as a competitive advantage
Attendance at Canadian Trade Shows is not necessarily a must
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Top Canadian Prospects for Colombian Apparel Manufacturers
(Excludes Foreign Retailers)Product Area Top Second Third
Men’s Jeans Mark’s The Bay Sears
Women’s Jeans Mark’s Ricki’s Bootlegger
Women’s Swimwear Bikini Village La Vie En Rose
Reitmans Corp
Men’s Swimwear Bikini Village Forzani Mountain Coop
Lingerie La Vie En Rose
Lilliane Jacob
Men’s Underwear Holt Renfrew Simons Priape
Women’s Casualwear
Mark’s Reitmans Corp
Northern Reflections
Men’s Casualwear Mark’s Sears The Bay
Canadian Market Entry Plan
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Options for a Colombian Apparel Manufacturer in Canada
• Supplier for Canadian retailers direct import programs
• Subcontractor for Canadian apparel manufacturers
• Agent/distributor for Canadian apparel suppliers in
South America
Bottom Line: Think Outside the “Box”
Canadian Market Entry Plan
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Bottom Line
The Canada – Colombia Free Trade Agreement
Offers Colombian Apparel Manufacturers a unique opportunity to increase its exports.
The Colombian government has done its part, it’s now up to Colombian apparel
manufacturers to take advantage of this new opportunity.
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THANK YOUQuestions about Canada or Mexico:
Randy Harris,President Trendex North America