San Francisco-based Gap Inc. announced Tuesday morning that its women’s and girls’ brand Athleta will enter the Canadian market later this year, making the performance lifestyle brand’s first expansion outside the United States. The first two Athleta retail stores will open in Toronto and Vancouver with more to come, and the company will also launch a Canadian e-commerce website this summer to gain traction in the Canadian market prior to the brick-and-mortar expansion.
Athleta’s first two physical stores will open at the Yorkdale Shopping Centre in Toronto and the Park Royal Shopping Centre in West Vancouver. Both stores will open sometime this fall. Yorkdale is considered to be Canada’s leading shopping centre in terms of sales per square foot as well as in terms of a clustering of luxury stores and first-to-market retailers. The beautiful sprawling Park Royal centre features a mix of indoor and outdoor retail as was recently featured in a tour in Retail Insider.
“International expansion is a key component of our growth strategy to reach two billion dollars in net sales by 2023, and we are very proud to introduce Athleta to customers in Canada,” said Mary Beth Laughton, President and CEO, Athleta. “As a purpose-driven brand, we are excited to expand our community of empowered and confident women and girls to Canada and bring them a differentiated and inclusive offering in the performance lifestyle category.”
Athleta says that it plans to open between 20 and 30 stores in North America annually. The brand already has over 200 stores across the United States which it says are profitable. Gap Inc. says that its Athleta stores remain a “top customer acquisition and brand awareness vehicles and are a key component of the growth and future of the brand.” New wholesale partnerships and international expansion through franchise and company-operated stores are among Gap Inc.’s strategic steps towards growing the Athleta brand to USD $2 billion in net sales by 2023. Last year Athleta surpassed USD $1 billion in net sales with 16% annual sales growth.
Athleta’s Canadian e-commerce site will see product fulfilled by the Gap Inc. distribution centre in Brampton, near Toronto, which will eliminate international taxes and lengthy shipping times for Canada-based consumers. Athleta noted in a press release that e-commerce in Canada is growing fast and that the pandemic further accelerated the channel’s growth. In 2020, about 60% of Athleta’s US business was generated from e-commerce according to the company.
Prior to making the decision to enter the Canadian market, Athleta says that it conducted extensive research to understand the behaviours of the Canadian consumer. The company’s findings indicated that this is demand for a purpose-driven performance lifestyle brand in this country with Athleta’s differentiated brand focus on “wellness, sustainability and inclusivity” coupled with versatile product that the company says will resonate in all regions. The company said that its product offering in Canada will be “differentiated” with extended sizing in approximately 500 styles in stores and online.
Athleta was founded in San Francisco in 1998 and Athleta Girl was launched in 2016. The company says that its mission “comes to life through inclusive and sustainable product design, connecting with customers through unique experiences in stores, online and within local store communities.” It’s a message somewhat similar to competitor Lululemon.
The expansion comes at a time when Gap Inc. is struggling. Over the past several years the Gap has closed stores across Canada, including the former Gap flagship location at the northeast corner of Bloor and Bay Streets in Toronto. Gap-owned Banana Republic has also closed some Canadian stores while Old Navy appears to be seeing more success. Gap-owned Intermix closed its only Canadian storefront on Bloor Street in Toronto several months ago. Some landlords told Retail Insider that some Gap-owned stores were not paying rent for some months during the pandemic.
Gap Inc., is the largest specialty apparel company in the US selling clothing, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, Athleta,and Intermix brands. Its fiscal year 2020 net sales were USD $13.8 billion.