Vancouver fashion house Aritzia files for IPO on TSX

Company founder Brian Hill and Berkshire Partners will sell shares

Vancouverite Brian Hill founded Aritzia in 1984 | Chung Chow

Fast-growing Vancouver women’s fashion retailer Aritzia LP filed to go public on the Toronto Stock Exchange on August 17.

The company itself will not receive any proceeds from the IPO but investors Berkshire Partners LLC and Aritzia founder and CEO Brian Hill will, by selling their subordinate voting shares. Hill and Berkshire Partners plan to keep control of the company by keeping shares that have multiple votes.

Aritzia did not disclose how much it expects the IPO to be worth.

The fashion house generated $571 million in sales in the year that ended May 29, while reaping $38 million in profit from its 75 retail stores and e-commerce platform, which contributes 12% of sales, according to its prospectus. Growth has been significant given that it has opened five stores in the last 10 months. Aritzia plans to open between 24 and 30 new stores by the end of 2021.

Its clientele tends to be women between 15 and 30 years old.

Today, Aritzia plans to open its second largest Canadian store, in Toronto’s Yorkdale Shopping Centre – a 10,400-square-foot location, according to Retail Insider Media owner Craig Patterson.

"It's a smart thing that Aritzia is looking to raise capital by an IPO, though it risks changing its business dynamics," Patterson said. "Family-run companies have the luxury of being able to sustain quarterly losses or challenging times, whereas shareholders expect consistent gains."

Aritzia's most visible Vancouver presence has been its expansion at the corner of Robson and Thurlow streets, where the company operates a flagship store that is pegged to be 13,027 square feet.

What’s more is that the chain also operates a separate 3,000-square-foot store, branded Wilfred, immediately west of the flagship store.

“Robson is still an important destination, and this is a very important store for us,” Aritzia owner Brian Hill told Business in Vancouver in October.

Hill said that a seminal moment that helped propel Aritzia to its current success happened more than 10 years ago.

He was in an H&M store and saw a shirt that was similar in style to ones he carried and was made of the same fabric.

H&M was retailing the T-shirt for $9.99, which was several dollars less than Hill’s wholesale price.

“We really started honing in on our supply chain,” he said. “We could not compete selling the same thing as H&M, and I don’t think we do now.”

Hill created brands such as Wilfred and TNA, which became so popular that he soon opened stand-alone stores under those banners.

A TNA store operates on Robson Street between Burrard and Thurlow streets, for example.

Aritzia does not reveal where its clothing is made or what percentage of its sales is from private-label products.

Its roots in Vancouver go back to 1984. One of the company’s first stores was on Robson Street. A 1,500-square-foot space at 1088 Robson Street, between Burrard and Thurlow streets, where J. Crew now operates, opened in 1986.

Hill moved the store one block west to a larger 3,400-square-foot space, at 1110 Robson Street, in the late 1990s and then started expanding that store in both directions.

About nine years ago, he took space immediately east of his store; two years ago, he took space to the west. Then last year he expanded to the east, on the corner.