Putting down Roots

Markets: TK

Once a hallmark of Canadian fashion, the brand that made sweatpants cool could soon be on the market. 

What happened: Roots’ board has launched a review of the company that will include exploring a possible sale. The Canadian brand, which went public in 2017, has struggled with sluggish sales post-pandemic. 

Catch-up: Roots has been trying to reclaim some of the cultural cachet that made its fleeces and sweatpants must-have pieces for years. It launched vintage pop-up stores in Toronto, signed ultra-cool Canadian fashion designer Joey Gollish as its creative director, and tapped Canadian actor Seth Rogen to be the face of its ad campaigns.

Why it matters: Canada’s K-shaped economy has put the retail sector in a precarious spot. Lux brands catering to the wealthy have thrived, and budget retailers have seen a major spike in business, but many brands that sit somewhere in between, like Roots, have wilted. 

Bottom line: Roots’ recent performance might be uninspiring, but it’s still a strong brand that seems tailor-made to appeal to shoppers looking to wear their Canadian pride (literally) on their sleeve. It will surely garner interest from buyers if it does end up on the market.—LA

Canada revs up its critical mineral push. Energy Minister Tim Hodgson formally launched the $1.5 billion First and Last Mile Fund, which will back the development of infrastructure meant to speed up critical mineral production. He also gave more details about the incoming $2 billion Critical Minerals Sovereign Fund, which will boost federal involvement in critical mineral projects. (Bloomberg News)

Ottawa asks Oman to use its airspace. Foreign Affairs Minister Anita Anand said she had requested to use Oman’s "viable" airspace to evacuate the estimated 100,000 Canadians in the Middle East. The U.S. and Israel expanded attacks on Iran yesterday, with Donald Trump claiming most Iranian military installations had been “knocked out.” Meanwhile, Mark Carney said his support for U.S. military action came “with regret.” (Global News)

Wealthsimple joins global money-moving system. The company became the first Canadian fintech to join Swift, the major global payments network that facilitates international transactions. The company said the move would allow it to offer faster and cheaper international money transfers. (Globe and Mail)

📡 What else is on our radar: 

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🤝 Meet Daniel Wigdor. He is a computer science professor and researcher at the University of Toronto, the former director of Meta’s Reality Labs in Toronto, and the CEO of AXL, a new Canadian venture studio. We sat down with Daniel to talk about the future of Canadian entrepreneurship, why academics have a hard time building businesses, and his frustration with Canada not benefiting from its own innovation. 

What is the biggest challenge of turning promising academic research into commercial products in Canada?

I think the biggest challenge is finding the real application for the technology. I think that too often academics look at industry and think they can just build a better mousetrap, but you only need a better mousetrap if the old ones aren't working. To me, the difference is that academics here invent this shiny new thing and believe that the world is going to reorganize itself around that shiny new thing. It's all about asking what is the problem and how are we going to solve it. It’s startup 101 stuff that in San Francisco they get, and we just don't get it here.

There's this lack of understanding of real potential and how to build a business. It's an overt hostility that exists in academic culture, and it's worse in Canada than in other places. Overcoming that and finding real human problems to solve with your technology is the challenge. 

How did working for some of the biggest tech companies in the world shape your work now? 

I've worked with Meta, I've worked with Microsoft Research, and I've also worked at Mitsubishi's research lab. What I've seen is these big companies invest real money in creating research labs so that they can themselves invent the products that are going to replace their own. 

You know, Mark Zuckerberg famously invested almost a billion dollars in buying Oculus because he almost blew Facebook’s lead during the transition to mobile. They almost lost the company because they didn't make the transition to mobile fast enough. So this time, they believe the future's going to be virtual reality, so they’re going to invent it themselves and be ahead of everyone else. 

The business mindset enters the research side so much earlier than we would allow it to happen here in Canada in the academic realm. I think that's been the most important lesson for me.

How should founders think about building moats right now when AI is disrupting so many fields? 

At the end of the day, it's all about human connection. Human connection will start to be worth a premium. Founders should be looking at how to provide a better human experience with their company. The future of how humans use AIs has not been written yet. Everyone's looking at chatbots and thinking this is how I'll use AI. To me, that’s the equivalent of looking at an old flip phone and thinking this is the future of how I'm going to use a phone. 

At AXL, we've got companies with first customers lined up, problems ready to go, and we've got a tech team that builds it. What we're lacking are founders with business experience. And I don't even need them to be able to spell AI. We don't need tech founders. We need people who understand people and problems.

This interview has been edited for length and clarity. Read the full Q&A here.

Looking for that perfect conversation piece for when you have guests over? We have an idea. 

Driving the news: After chilling in a Wyoming museum for decades, a triceratops skeleton nicknamed “Trey” is going up for auction later this month. Estimates have the sales price pegged between US$4.5 and $5.5 million, but Trey could blow past these expectations.

Why it matters: The boom reflects a wider trend where many new-money billionaires (over 340 were minted just last year) have traded traditional alternative asset classes like fine art for areas that speak to their personal interests, including things they loved in their youth — be it sports, Pokémon, or dinosaurs. Simply put, T. rex bones are cooler than Rembrandts for these nouveau riche collectors.

Yes, but: In the case of fossils, there’s concern that private interest is hindering (potentially vital) research. While many buyers end up displaying their prizes in museums, the kind of guarantees paleontologists need to conduct research don’t exist without public ownership.

Zoom out: Public institutions can’t keep up with the private market. According to research released last year, just 11% of commercially collected bones are going to public trusts, and commercial fossil hunters are excavating fossils at twice the rate of museums.—QH

🤖 295%. Jump in users who uninstalled ChatGPT after OpenAI signed a deal with the Pentagon to provide it with its models. The deal, which CEO Sam Altman says he has since amended, drew blowback over how the technology might be used — specifically, to conduct mass surveillance of Americans and power autonomous weapons.

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