This has been a challenging year for many clothing merchants on both sides of the border.
So as we look back at the past 12 months on Vancouver’s retail scene, let’s start with some good news.
If there were to be a prize for local fashion company of the year, it would have to go to Aritzia Inc. That’s because in the midst of a monumental economic slowdown, it defied the odds and actually boosted shareholder value over the year.
From January 2 to when stock markets closed on December 22, the Vancouver-based retailer’s stock rose by an astonishing 31 percent.
One of the more popular business stories of the year on Straight.com concerned its CEO, Brian Hill.
He only collected a $1 salary and $1 bonus in the last fiscal year. And that was after the company posted net annual income of $90.6 million on revenues of almost $1 billion. It’s a true homegrown success story.
So how did Aritzia make so much money when so many other fashion stores were going bankrupt?
Part of the reason was its relatively early emphasis on online sales, providing a cushion when the pandemic forced so many stores to close for a brief period.
But Aritzia also captured the spirit of the city earlier this year when it donated 100,000 community relief packages to frontline health workers. It provided them with easy to wear and easily washable outfits for those travelling to and from their jobs. Not only was it the right thing to do, it generated goodwill from customers.
Nevertheless, even though Aritzia’s share price is up, its net revenues and gross profits fell in the first six months of 2020 compared to the same period in 2019. That’s to be expected in a pandemic.
Retail consultant David Ian Gray told the Straight last month that its transition to online sales has certainly helped, but this hasn’t offset reduced in-store sales.
Gray also pointed to other bright spots in retailing this year, including home furnishings and video games.
“If you were a bike shop this summer, you did quite well,” he added.
The lineups outside Comor - Go Play Outside in late November and December suggest that there’s great demand for winter sports gear. And the grocery and pharmaceutical giants had a banner year.
Pandemic took a toll on others
But many other retailers haven’t fared nearly as well in 2020. And that’s hollowing out communities across the region, as demonstrated by rising retail vacancy rates.
In the world of fashion and footwear, the following companies closed some or all of their stores in 2020: Le Chateau, Swimco, Army & Navy, Leone, Aldo, Ronsons, La Senza, Reitmans, Frank and Oak, Ten Thousand Villages, RYU, Nygård, Hudson’s Bay, J. Crew, Bench, RW&CO., Thyme Maternity, and Addition Elle.
In addition, Pier 1 Imports went bankrupt and Starbucks shut down several outlets as part of a consolidation plan that will see it focus more on takeout service.
On the south side of the 1700 block of West Broadway, the results of this are apparent. Not only are the Starbucks and Pier 1 stores still vacant, but the former site of Tilley Endurables’ flagship store remains empty.
The Bed Bath & Beyond store on the same block is still in business, even though 200 of the company’s other stores in Canada are expected to close.
More than a dozen storefronts are shuttered in Point Grey Village, including former sites of Tim Hortons and Starbucks, thanks in part to the closure of the Safeway store.
Shopping districts on West Broadway, Gastown, Commercial Drive, Main Street, and Fraser Street have also taken a hit.
CBRE’s most recent retail market report, covering the first half of 2020, noted that retail sales fell 32.5 percent in April alone; the following month, e-commerce sales in Canada reached a whopping $3.6 billion, marking a 110 percent year-over-year increase.
This helps explain why companies that embraced e-commerce, such as Aritzia, have felt slightly less pain than some of their competitors in what CBRE calls the “new age of retail”.
As a result of the pandemic, the downtown retail vacancy rate climbed to 4.8 percent, whereas it reached 5.7 percent in malls, according to CBRE.
“It’s too early to determine the long-term impact on vacancy as businesses slowly begin to reopen and restructure, and recovery periods remain uncertain,” CBRE stated in its report. “One takeaway from the pandemic is that the retail sector is resilient and will continue to evolve and adapt in response to changes in the economy and consumer habits.”
Some big retailers, like Gap Inc. and Hudson's Bay, simply refused to pay their rent to landlords. Others tried to get by on a wholly inadequate federal program that left the landlord in charge of deciding whether the tenant would get a break.
One thing is for certain: it was a year unlike any other in modern B.C. retail history. And let's hope that we never have to experience anything like this ever again.