Reitmans is one of the largest and best known retail chains in Canada. Based in Montreal, it has a long history both as a single banner and later by adding Pennington’s, Smart Set, and Addition Elle. At one time, Reitmans could be found in almost every mall of any size. In the past five years however, Reitmans’ dominance has slipped and its same store sales have eroded as new apparel retailers, especially the so-called “fast fashion” stores, present better prices and more fashion in their stores.
In addition to the competition from “bricks,” Reitmans has also been challenged by “clicks.” For instance, Reitmans was slow to embrace the sale of apparel online. Like many other Canadian apparel retailers, they found the business model for selling apparel online in Canada was costly and unprofitable. While Reitmans now has a transactional website and a significant amount of their growth comes from their online presence, they are still well behind the retailers who were earlier adopters.
The final challenge for Reitmans has been their image and positioning. They are considered at best a basic brand with little fashion. At worst, they are viewed as unfashionable and boring.
These challenges for Reitmans have been well documented and discussed as a clear example about how Canadian retailers are not keeping up. Now, Reitmans is fighting back. In addition to their new advertising campaign, “Reitmans. Really.” featuring television and fashion personality Megan Markle, they have opened a new athleisure chain and have hyped up their in-store merchandising. These changes appear to be driven by Walter Lamothe, their president of retail and COO, who seems to have the mandate to make real changes.
We recently had the opportunity to review some of these changes and here is our take.
They have become very active on the marketing front, not just with the Megan Markle campaign but also with their RW&Co. campaign for suits and Addition Elle’s use of the plus size super model, Ashley Graham. While image is important, these campaigns must have real substance at the point of customer contact.
Reitmans’ online sales are growing at +70%. While this is a great indicator of potential for their online business, they are coming from a relatively low level. However, they are now starting to have impact on the top line and account for Reitmans’ growth as same store sales are either flat or slightly down despite the closure of 55 stores.
It is good to see that Reitmans is attempting to take a more segmented approach to their merchandising, with a higher-end house brand Willow & Thread. This brand augments the more basic value brand Reitmans. In-store visuals definitely add interest and bring the marketing into the store.
Reitmans has now taken on the athleisure business and found what appears to be a viable niche. Unlike their competitors, the new brand―Hyba, caters to women who are not striving to be super athletes or yoga acolytes. The brand touts the idea of movement as being important, focusing on more self-improvement than competitiveness. In addition, they carry plus sizes recognizing that all women could be involved.
While the changes are relatively new, they appear to be reinvigorating a brand that we would like to see thrive. It is great to see Reitmans finally making some meaningful changes. While there are many places where these initiatives could be improved, e.g., their omni-channel presence both in-store and online is negligible, their commitment to shake up their business model bodes well for their future.
Written by: Maureen Atkinson, Senior Partner, Research Insights at J.C. Williams Group. This article was originally published on Marketing Magazine.
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