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Aritzia developing influencer strategy as it posts $17.9M profit

The Aritzia store where Meghan Markle shopped according to local media is pictured in Toronto, Ontario, Canada, May 11, 2018. REUTERS/Carlo Allegri

Aritzia Inc. (ATZ.TO) is developing a strategy focused on influencer marketing, a move the clothing retailer hopes will help raise its profile as it continues to expand in the United States.

Speaking to analysts on a conference call following the release of the company’s second-quarter results on Tuesday, Aritzia chief executive Brian Hill said partnering with social media personalities is part of the strategy to boost the brand’s reach in the U.S. market, particularly when it comes to e-commerce.

“I think we’ve done a great job with mega-influencers...and I think we still have lots of runway to go on the so-called micro-influencers. We’re working on a strategy around that now,” Hill said.

“I expect our growing brand awareness, and boutique expansion, will play a meaningful role in contributing to e-commerce growth in the United States.”

The Vancouver-based retailer has expanded its store count in the U.S. this year, recently opening boutiques in Hudson Yards in Manhattan and the Mall of America in Minneapolis. Aritzia currently operates 67 stores in Canada and 27 in the United States, four of which were added in the last quarter alone.

As it continues opening new stores in the U.S., the company has turned to celebrity influencers such as Kendall Jenner in a bid for attention of consumers. Aritzia said Tuesday it is working with celebrities for its fall campaign, also partnering with Hailey Bieber, Sophia Ritchie and others.

“The campaign continues to create excitement and we’re delighted with the increased levels of engagement with our clients through social media,” Hill said.

Influencers – loosely defined as social media personalities – play an increasingly significant role when it comes to marketing, especially in the retail industry. Retailers in a range of categories – from apparel to technology manufacturers – cite influencers on quarterly conference calls and credit them for successful marketing campaigns.

Aritzia’s chief operating officer Jennifer Wong said the retailer is working on providing customers with new ways to engage online and through social media.

“We are in the implementation phase for these initiatives, and we expect this will increase brand awareness, drive incremental growth and further augment the growth of our e-commerce business,” Wong said.

RBC Capital Markets analyst Irene Nattel said in a note to clients on Wednesday that the company’s investments, including in the marketing space, will fuel growth going forward.

“The company’s ongoing investments in talent, infrastructure and evolving marketing initiatives along with increased geographic reach should enable Aritzia to deliver mid-teens revenue and earnings per share growth through and past our forecast period,” Nattel said.

Aritzia reported a net profit of $17.9 million in the 13-week period ending Sept. 1, a nearly 19 per cent jump from a $15.1 million profit during the same period last year. Adjusted net income increased by 8 per cent, from $18.3 million last year to $19.8 million in 2019. At the same time, Aritzia’s comparable sales growth – a key metric in the retail industry – came in at 8.4 per cent in the second quarter, down from 11.5 per cent in 2018.

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