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Retail disruption leads manufacturers to seek new sales channels

Online sales, storefronts increasingly vital for ventures that sell to resellers
Dish and Duer principal Gary Lenett lounges in a tree house that he built in his new store on West Hastings Street | Rob Kruyt

Say the retail buzz phrase “omni-channel” and few will immediately think of manufacturers.

Most entrepreneurs will instead think of bricks-and-mortar retailers expanding into e-commerce or online retailers opening physical stores.

But the trend is equally vital for clothing and other consumer products manufacturers – many of which also operate e-commerce websites.

Successful companies that have manufactured clothing for decades, such as Canada Goose Holdings Inc. (TSX, NYSE:GOOS), are recognizing this and opening their own corporately owned stores in addition to selling wholesale to resellers.

Toronto-based Canada Goose recently opened stores in New York and Toronto, and it plans to open stores in Chicago and London.

“There are plenty of examples over the past 18 months of manufacturers opening their own stores,” said retail analyst and Retail Insider Media owner Craig Patterson.

“Just last month at Oakridge Centre, La Maison Valmont opened its first North American store.”

Vancouver’s Herschel Supply Co. is another example of a company that has relied on wholesalers and third-party distributors for sales in thousands of stores worldwide.

Herschel, like most manufacturers, also has an e-commerce website.

Partners operate 45 Herschel-branded storefronts that dot Europe and Asia.

When it comes to North America, however, Herschel has delayed having its brand emblazon storefronts because it did not want to have any third party operating stores on its home continent, and it was not yet ready to branch out into operating its own retail spaces.

Herschel executives now realize that opening retail stores on this continent is key to drive sales and educate consumers about what the brand is all about, co-founder Lyndon Cormack told Business in Vancouver.

His plan is to open a 5,000-square-foot store at 347 and 349 Water Street by next March. Not only will the store be the company’s first corporate location but it will also be the world’s largest Herschel store and one where there is more selection and interactive displays to engage customers.

“Whether we have an event or have people through the store, having our own store in our home town helps us tell our story,” Cormack said.

Vancouver-based jeans maker Dish and Duer is smaller than Herschel but, like Herschel, it designs its products in Vancouver and has them manufactured in Asia.

Sales are growing fast enough for revenue to be doubling every six months, with much of that growth coming from e-commerce, Dish and Duer principal Gary Lenett told BIV. He expects his four-year-old company to have a $14 million run rate by next year.

Getting there, he said, will require having not only a physical store but also likely some pop-up stores across the continent to support Dish and Duer’s wholesale customers, such as the REI Co-op in the U.S. and Sporting Life in Ontario.

“If I went to Chicago and created a whole bunch of buzz for three to four weeks and then withdrew, I’m really supporting my wholesale partners,” Lenett said.

“People are going to be excited about the brand and seek it out.”

So far, Lenett has held only one pop-up: in Vancouver’s Railtown district.

He then opened his first permanent store last month inside his head office, which is a nearly 8,000-square-foot site at 118 West Hastings Street.

To draw interest and demonstrate that Dish and Duer jeans are meant to be worn during athletic activity and not simply to stroll down the street, the company’s store has a tree house, monkey bars and stationary bikes for customers to use after they have tried on pants.

“We’ve had some customers hang out in our tree house,” Lenett said with a laugh.

“Our employees definitely love it. They’ve had meetings up there.”•

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