Global Retail   //   February 21, 2023  ■  4 min read

‘Physical retail has never been more important’: Why apparel companies like Canada Goose and The North Face are investing in stores

Despite a steady stream of store closures at retailers like Bed Bath & Beyond, Walmart and Macy’s, several apparel brands are forging ahead on expansions to appeal to in-person shoppers.

Canada Goose is looking to double its retail footprint in the next five years, while Ralph Lauren is planning to open 250 new stores over the next three years. The North Face is hoping to open 70 new locations in North America by 2027. REI, meanwhile, will have a new location in California in the spring and a new co-op in Oklahoma in 2024. And, Vuori is aiming for nine new stores before the end of the summer, Modern Retail has learned.

Apparel and footwear companies tend to be among the hardest hit in times of economic uncertainty, and the apparel sector “far outpaced” others in terms of store closures in the U.S. in 2022, according to Coresight Research. Despite this, a growing batch of apparel companies is investing in physical retail to better cater to customers who want an in-person shopping experience. While many people did the majority of their shopping online at the beginning of the pandemic, in-store shopping is coming back. According to a new survey by PwC, in-store remains the most popular shopping choice at 43%, followed by mobile/smartphones at 34%.

For physical retail, “traffic is up pretty much across the board,” Kelly Pedersen, U.S. retail leader at PwC, told Modern Retail. “People are almost over-indexing right now on wanting to go back to the physical environment.” In addition, since e-commerce is “the most expensive form of fulfillment,” he continued, “retailers are very much welcoming back consumers to their stores.”

Over the past few years, many companies have brought an omnichannel approach to sales and marketing. But, in focusing so much on digital channels, “we kind of gave a lot of credit to elements of online that we never gave to elements of offline,” Ethan Chernofsky, vice president of marketing at Placer.ai, told Modern Retail. “Offline is not any less important than it was a year or two years ago or five years ago. It’s still super critical and it’s growing.” In fact, he added, “physical retail has never been more important.”

Apparel companies — which particularly benefit from people flipping through racks, feeling different fabrics and trying on products — are taking note of this. Canada Goose currently has 51 permanent stores around the world, although it hopes to bring this number up to “between 130 and 150 with growth across Asia Pacific, EMEA and North America,” according to an investment release. The brand plans to reach $3 billion in revenue by 2028, largely thanks to growth in its DTC business.

Ralph Lauren makes most of its revenue from retail, followed by wholesale and licensing. The company, which has a much larger existing footprint than Canada Goose, is already making progress on “open[ing] new physical stores that enable customers to engage directly with our brands around the world,” CEO Patrice Louvet said on a recent earnings call.

Ralph Lauren’s market expansion is currently underway in 30 cities, including Beijing, Shanghai, Milan, Munich, Los Angeles, Chicago, Miami and Atlanta, according to Footwear News. As of Dec. 25, 2021, Ralph Lauren had 505 directly-operated stores and 676 concessions globally, according to its most recent earnings. Those numbers jumped to 549 and 728, respectively, by Dec. 31, 2022.

Meanwhile, The North Face has been particularly invested in building out its experiential stores. Its first store of this type opened in New York City in 2019. At the time, The North Face said it wanted its locations to be “basecamps for exploration” and announced that all new stores would feature FSC-certified reclaimed wood, steel and granite. The North Face wants to add up to 300 retail and partner locations internationally over the next five years, according to RetailDive.

Online shopping can be convenient and time-saving. But, “it’s not built for discovery,” Chernofsky explained. For apparel, especially, “that first visit still needs to happen in the physical environment, because that’s where I can do the try-on. That’s where I can fall in love with a brand. I think this idea of experience being so front and center… is what’s driving so much focus in the brick-and-mortar environment right now.”

Update: The story has been changed to clarify that Vuori plans to open nine stores by the end of the summer.