Latest news with #Lutfy
Fashion Network
6 hours ago
- Business
- Fashion Network
Clothing retailer Dynamite raises prices 9% amid trade tensions
Women's fast-fashion retailer Groupe Dynamite Inc. raised prices by 9% over the past year and plans to increase them at twice the rate of inflation for the foreseeable future, its chief executive officer said. Shares on Tuesday rose by the most since the company went public last year after it reported strong first-quarter results, including higher revenue. 'If you extrapolate, the cost of our goods with or without tariffs is really a negligible piece of the average unit,' CEO Andrew Lutfy said in an interview. Dynamite shifted production away from China during its first quarter to avoid higher tariffs on US imports. 'Most of our goods were manufactured in China,' Lutfy said. Now, products going to the US are 'actually the minority of our goods — we cut it by 50%, which is ridiculously agile.' Transferring production to Asian countries such as Bangladesh and Cambodia came with one downside: 'There's been such a rush to those other countries that prices have actually gone up in those other markets. All the supply-chain inefficiencies are showing up,' Lutfy said, adding the company's input costs are up 'marginally.' The Mount Royal, Que.-based firm owns about 300 stores in Canada and the US under the Garage and Dynamite banners. The firm's gross margin was 62.1% in the quarter ended May 3, down by 1.8 percentage points from the same period a year ago due mainly to the impact of US levies. During the quarter, revenue increased by 20% to C$227 million ($167 million) from the previous year, and adjusted diluted earnings were 25 Canadian cents per share, beating analyst estimates by 3 cents, according to data compiled by Bloomberg. The retailer revised its 2025 outlook for comparable store sales growth to a 7.5%-to-9% range from a 5%-to-6.5% range. Lutfy said Dynamite can perform well in uncertain times because it sells relatively inexpensive apparel. 'Here in an environment where no one wants to pile on debt right now, we're at the other end of that spectrum, which is affordable indulgences. So a C$30 top is just going to make you happy. It's the price of a martini.' 'Groupe Dynamite product is resonating, real estate optimization is improving store productivity, and pricing/sourcing mitigation actions are offsetting tariffs,' TD Cowen analyst Brian Morrison wrote in a note to clients. 'Its solid outlook supports our view that Groupe Dynamite's valuation is too punitive.' Dynamite's stock rose by as much as 18% in Toronto Tuesday, but remains below its initial public offering price of C$21. It was C$19.37 at 2:53 p.m. 'We're a new company, we're a new IPO and they want to see sustained performance,' Lutfy said of the market's reaction so far.
Fashion Network
12 hours ago
- Business
- Fashion Network
Clothing retailer Dynamite raises prices 9% amid trade tensions
Women's fast-fashion retailer Groupe Dynamite Inc. raised prices by 9% over the past year and plans to increase them at twice the rate of inflation for the foreseeable future, its chief executive officer said. Shares on Tuesday rose by the most since the company went public last year after it reported strong first-quarter results, including higher revenue. 'If you extrapolate, the cost of our goods with or without tariffs is really a negligible piece of the average unit,' CEO Andrew Lutfy said in an interview. Dynamite shifted production away from China during its first quarter to avoid higher tariffs on US imports. 'Most of our goods were manufactured in China,' Lutfy said. Now, products going to the US are 'actually the minority of our goods — we cut it by 50%, which is ridiculously agile.' Transferring production to Asian countries such as Bangladesh and Cambodia came with one downside: 'There's been such a rush to those other countries that prices have actually gone up in those other markets. All the supply-chain inefficiencies are showing up,' Lutfy said, adding the company's input costs are up 'marginally.' The Mount Royal, Que.-based firm owns about 300 stores in Canada and the US under the Garage and Dynamite banners. The firm's gross margin was 62.1% in the quarter ended May 3, down by 1.8 percentage points from the same period a year ago due mainly to the impact of US levies. During the quarter, revenue increased by 20% to C$227 million ($167 million) from the previous year, and adjusted diluted earnings were 25 Canadian cents per share, beating analyst estimates by 3 cents, according to data compiled by Bloomberg. The retailer revised its 2025 outlook for comparable store sales growth to a 7.5%-to-9% range from a 5%-to-6.5% range. Lutfy said Dynamite can perform well in uncertain times because it sells relatively inexpensive apparel. 'Here in an environment where no one wants to pile on debt right now, we're at the other end of that spectrum, which is affordable indulgences. So a C$30 top is just going to make you happy. It's the price of a martini.' 'Groupe Dynamite product is resonating, real estate optimization is improving store productivity, and pricing/sourcing mitigation actions are offsetting tariffs,' TD Cowen analyst Brian Morrison wrote in a note to clients. 'Its solid outlook supports our view that Groupe Dynamite's valuation is too punitive.' Dynamite's stock rose by as much as 18% in Toronto Tuesday, but remains below its initial public offering price of C$21. It was C$19.37 at 2:53 p.m. 'We're a new company, we're a new IPO and they want to see sustained performance,' Lutfy said of the market's reaction so far.
CBC
15-04-2025
- Business
- CBC
Montreal-based Groupe Dynamite to shut down up to 10 stores, open 20 more
Groupe Dynamite Inc. says it expects to close about 10 stores that are mostly in Canada this fiscal year, even as it plans to open up to 20 more in the U.S. over the same time frame. The Montreal-based clothing retailer also said Tuesday that between 10 and 15 of its Dynamite and Garage stores will be relocated or renovated this year. The company did not immediately respond to questions about how many jobs may be lost as a result of the changes. CEO Andrew Lutfy positioned the moves as his company's way of being disciplined about its footprint, which it ultimately hopes to grow from 298 to 350 stores by the end of its fiscal 2028. "Agility isn't a tactic, but it's our mindset," he said on a call with analysts who were told no less than 12 times that "agility" is the company's current mantra. Its adoption of that modus operandi has come as apparel retailers have been plunged into a world of uncertainty because of tariffs the U.S. has been imposing on dozens of countries. Many of the duties have targeted Canada, while others are aimed at giants in the clothing manufacturing world such as Bangladesh, Cambodia, China, India, Indonesia, Malaysia, Pakistan, Turkey and Vietnam. International brands worry the tariffs will dampen consumer spending and make production and shipping more expensive, forcing them to pass along elevated costs to consumers. Lutfy thinks his company is well positioned to weather the storm, in part because it has raised its prices "successively through the years at a rate much faster than the rate of inflation." "I know that's not going to change any time soon," he said. However, consumers may become less able to absorb such increases as the tariff war wears on, putting pressure on their wallets and causing some to rethink discretionary purchases like clothing. While Lutfy acknowledged "there's anxiety out there," he saw apparel as being a more immune category than Jet Skis, cars and furniture, which he pointed out people often buy with debt financing. "In these recessionary times, often enough, a cute, $30 top that puts a big smile on your face is sometimes just what it takes to get you through the week," he said. He is so confident in the average consumer's interest in buying clothes even during a difficult economic period that he said, "I actually do like these times." "I don't have an issue with it," he said. "As a matter of fact, we see it as an opportunity to take market share." Shifting supply chain focus To accomplish that task, the company has been shifting its supply chain away from China and toward Bangladesh, Cambodia and Vietnam. The company had long been planning to "de-risk" itself by moving away from China, but the tariff talk "escalated" the plan, Groupe Dynamite's president and chief operating officer Stacie Beaver said on the same call as Lutfy. It was also coupled with a decision to sign an agreement with a third-party logistics provider to open a U.S. warehouser this July that Groupe Dynamite hopes will speed up shipping times. The window Groupe Dynamite offered into its operations came as it reported a fourth-quarter profit of $31.0 million, up from $28.6 million a year earlier as its revenue rose 13 per cent. That profit amounted to 28 cents per diluted share for the 13-week period ended Feb. 1 and was up from a profit of 27 cents per diluted share in the company's fourth quarter a year earlier which included 14 weeks. Revenue for the quarter totalled $271.8 million, up from $240.3 million. Groupe Dynamite attributed the growth to a 9.5 per cent increase in comparable store sales and contributions from new stores.
