After posting its first-ever $1 billion quarter, Aritzia is looking to tap into a ritzier market down south.
Driving the news: The Vancouver retailer is buying luxury fashion brand Fred Segal, a deal that includes the brand’s intellectual property, trademarks, and the lease for its now-shuttered flagship store on Melrose Avenue in Los Angeles.
Fred Segal — founded with the name Pants America, which is way more fun — became a pop culture phenomenon, sported by celebrities like Lenny Kravitz and Paris Hilton.
Unlike Aritzia, which has made a killing in e-commerce, Fred Segal struggled to adapt to the internet era and fell victim to a slowdown in the luxury retail market.
Why it matters: Even in the age of online retail, there is still demand for the type of experiential retail that makes an event out of in-person shopping. In that spirit, Aritzia has started to retrofit its stores with everything from swankier dressing rooms to cafes and lounge areas.
Upstart online retail platforms, including Fwrd and MyTheresa, have had a lot of success with physical experiences like pop-up events and in-person styling services.
With the Fred Segal acquisition, Aritzia plans to create what it describes as curated, immersive experiences, putting the famous 29,000-square-foot Melrose store at the centre of that effort.
Our take: While legacy brands like Gucci and Louis Vuitton struggle to lure customers, Aritzia’s strategy of mixing more accessible prices with the glitz of high street shopping could prove to be the happy medium that opens more wallets.—LA