Latest news with #MeghanRoach
Yahoo
05-07-2025
- Business
- Yahoo
How retailers are cashing in on the trade war: FP video
This week FP Video takes a close look at Canada's retail landscape amid the ongoing trade war. Meghan Roach, chief executive Roots Corp., talks to Financial Post's Larysa Harapyn about the iconic Canadian brand that now ships to 75 countries worldwide. Gary Lenett, founder and CEO of Duer, talks about how the tariff war is a big boost for the jean maker. Retail analyst Bruce Winder talks about Inc. extending Prime Days and how the retail giant is tapping into the renewed sense of Canadian patriotism with its recent moves in the Canadian market. Made in Canada: how Canadian businesses are tackling the trade war Unemployment, inflation and travel amid ongoing tariff uncertainty: FP video Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-06-2025
- Business
- Yahoo
5 years after US bankruptcy, Roots notches third quarter of sales growth
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Five years after Canadian brand Roots shuttered its U.S. operations in bankruptcy, pivoting to an e-commerce-first approach in the country, the brand recorded its third consecutive quarter of year-over-year sales growth. Sales grew 6.7% in Q1, reaching 40 million Canadian dollars ($29.5 million as of press time). As part of a multiyear strategy, Roots is closing underperforming stores and focusing resources on 'high potential locations' that have strong brand resonance, customer engagement and long-term profitability, CEO Meghan Roach said on a call with analysts. Roots is also updating its existing fleet with a new store design that includes refreshed merchandising layouts, digital screens and flexible fixtures that allow for regular changes to highlight seasonal stories. The retailer still operates two stores in the U.S. and said at the time of its exit in 2020 that it believed in the market opportunity in the country. Roots is beefing up its marketing and investing in physical stores as it seeks to increase conversion across channels. DTC sales in the quarter grew 10%, with comps up 14%, but the retailer still netted a loss of CA$7.9 million in the quarter. Executives said losses were expected given Roots only does 30% of its business in the first half of the year and usually comes out positive in the second half of the year. Net debt was down 6.7% in the quarter, to CA$29.6 million, and the brand had a net leverage ratio of 1.3 times. Roots also updated its credit terms to extend maturity to 2027. The retailer hired a new head of omnichannel growth in the quarter and discussed plans to update its stores and operations. Roots is investing in product development and sourcing and merchandising improvements, with the aim of reducing time to market. In-stock levels also improved in the quarter. When it comes to store design changes, those are based on customer feedback and in-store analytics, according to Roach, and are aimed at improving the store experience. 'The goal is to create a more immersive, intuitive and inspiring retail environment, one that aligns with our brand direction and deepens emotional connection with customers,' Roach said on a Friday call, according to a Seeking Alpha transcript. 'Our stores are not only a point of sale but extensions of our brand ethos, and we remain committed to ensuring they deliver both inspiration and convenience.' Executives also discussed plans to invest more deeply in marketing to communicate the turnaround work it has done over the past five years, which has included assortment improvements, an activewear launch and a more fashion-forward focus. 'We want to make sure that we're getting those new products in front of consumers and also making sure that we're speaking to them about the modernization we've done around the brand,' Roach said. 'So you will continue to see us investing behind paid media.' Roots also launched a brand ambassador program a year ago, which has 'exceeded overall expectations.' Roach said influencers are a 'key driver' of the brand's marketing strategy and noted the brand recently signed a deal with NCAA women's basketball player Toby Fournier, who will appear in marketing content and sport Roots apparel. Roach described the marketing strategy, introduced at the end of last year, as 'multipronged' and said the company has also seen success with in-store events like International Sweatpants Day. It's planning to host more in the year ahead. 'We have seen the strong momentum gained from investing in authentic brand storytelling, increased brand reach and memorable brand experiences,' CFO Leon Wu said on the call. 'We continue to believe in our long-term growth benefits unlocked through marketing and anticipate similar levels of increased spend in the second quarter, accelerating as we enter our peak fall and holiday season.' Editor's note: This story first appeared in the Retail Dive: Operations newsletter. You can sign up for it here. Recommended Reading Despite 18% sales drop, Allbirds says it could return to top-line growth in Q4 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fibre2Fashion
17-06-2025
- Business
- Fibre2Fashion
Canada's Roots' Q1 FY25 sales climb 6.7%, net loss narrows to $5.85 mn
Canadian premium outdoor-lifestyle brand Roots has posted total sales of Ca$40 million (~$29.6 million) in the first quarter (Q1) of fiscal 2025 (FY25), ended May 3, an increase of 6.7 per cent year-over-year (YoY). Meanwhile, direct-to-consumer (DTC) sales rose 10.2 per cent to Ca$34.6 million (~$25.6 million), driven by a 14.1 per cent increase in comparable sales fuelled by enhanced product curation and improved customer experience. The gross profit of the company climbed to Ca$24.6 million, with the overall gross margin expanding 250 basis points (bps) to 61.5 per cent. DTC gross margin rose to 62.9 per cent, reflecting better product costing and reduced discounting, partly offset by foreign exchange pressures and increased freight costs. Roots has reported Q1 FY25 sales of Ca$40 million (~$29.6 million), up 6.7 per cent YoY, with DTC sales rising 10.2 per cent to Ca$34.6 million (~$25.6 million). The gross margin improved to 61.5 per cent, net loss narrowed to Ca$7.9 million (~$5.85 million) and inventory rose 14.5 per cent. Executives cited strong brand momentum, and AI-led operational improvements driving continued growth. Wholesale and partner-operated (P&O) sales dropped to Ca$5.4 million, as international partners adjusted inventory levels. However, this decline was partially offset by robust growth in China's Tmall e-commerce channel and other lines of business within the segment, Roots said in a press release. The company reported a net loss of Ca$7.9 million (~$5.85 million) or Ca$0.20 per share, improving from a loss of Ca$8.9 million or Ca$0.22 per share in Q1 FY24. Excluding the impact of share-based compensation, the net loss was Ca$7.4 million. Adjusted EBITDA amounted to a loss of Ca$7.1 million, an improvement of 10.7 per cent YoY when excluding the compensation impact. Selling, general and administrative (SG&A) expenses increased to Ca$33.3 million, up 4.1 per cent YoY, primarily due to higher marketing investments and a Ca$0.5 million unfavourable revaluation of share-based compensation instruments. Excluding this, the increase was 2.6 per cent. The company's inventory rose 14.5 per cent to Ca$40.5 million, reflecting restocking of core collections and increased in-transit goods. Free cash flow was negative at Ca$21.8 million, mainly due to inventory investments and occupancy cost timing. Net debt stood at Ca$29.6 million, improving from Ca$31.7 million. As of May 3, 2025, the leverage ratio was 1.3x, with Ca$40.6 million drawn under credit facilities and total liquidity of Ca$65.9 million. 'Our first-quarter results, marking the third consecutive quarter of year-over-year growth in sales, gross margin, and adjusted EBITDA, speaks to the growing resonance of the Roots brand and the discipline with which we are executing our strategic priorities,' said Meghan Roach, president and chief executive officer (CEO) at Roots . 'From elevated marketing to improved product availability and AI-operational enhancements, we drove meaningful gains across key performance metrics. As we begin 2025, I am proud of how our team continues to innovate and deliver value, while navigating consumer preferences and the evolving retail landscape.' 'Our first quarter results reflect our ongoing commitment to balance top-line growth with cost discipline to improve long-term profitability and operating leverage,' said Leon Wu, chief financial officer (CFO) at Roots . 'With a strong balance sheet, we are well-positioned to opportunistically respond to shifting market conditions while sustaining our current momentum.' Fibre2Fashion News Desk (SG)
Yahoo
16-06-2025
- Business
- Yahoo
Roots reports 6.7% sales growth in Q1 2025
Canadian outdoor-lifestyle brand Roots recorded total sales of C$40m ($29.3m) in the first quarter (Q1) of 2025, a rise of 6.7% from the previous year's C$37.5m. The company's direct-to-consumer (DTC) sales edged up to C$34.6m in Q1 2025, a 10.2% climb from C$31.4m in Q1 2024. The DTC segment's momentum was evident with a 14.1% surge in comparable sales growth, attributed to improved product curation and customer experience, with better stock availability. Although partner and other sales, including wholesale activities, licensing and custom products, saw a dip to C$5.4m from C$6.1m in Q1 2024, this was partially mitigated by growth in other business lines, such as China Tmall e-commerce sales. The company's gross profit for Q1 2025 stood at C$24.6m, an 11.2% increase year-on-year (YoY). Gross margin improved to 61.5% compared to 59% in Q1 2024. Roots CEO and president Meghan Roach stated: "Our first-quarter results, marking the third consecutive quarter of year-over-year growth in sales, gross margin, and adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation], speaks to the growing resonance of the Roots brand and the discipline with which we are executing our strategic priorities.' Selling, general and administrative expenses rose by 4.1% to C$33.3m, with a portion of this increase due to a C$0.5m of unfavourable revaluation of cash-settled instruments under the company's share-based compensation plan. The company narrowed its net loss to C$7.9m in Q1 2025 from C$8.9m in the same period of 2025. Inventory levels increased 14.5% to C$40.5m, driven by a strategic increase in core collections and higher in-transit inventory to support the upcoming season. Roots has a free cash flow of C$21.8m, primarily due to increased inventory purchases and the timing of occupancy cost payments. As of 3 May 2025, the company reported a net debt of C$29.6m, an improvement from C$31.7m a year earlier, with a leverage ratio of 1.3x. Roots amended its credit agreement on 22 May, extending the maturity date and adjusting its credit facilities, which will impact future debt financing costs. Roach added: 'From elevated marketing to improved product availability and AI-operational enhancements, we drove meaningful gains across key performance metrics. As we begin 2025, I am proud of how our team continues to innovate and deliver value, while navigating consumer preferences and the evolving retail landscape." Roots posted total sales of C$262.92m in the fiscal year 2024. "Roots reports 6.7% sales growth in Q1 2025" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
CTV News
16-06-2025
- Business
- CTV News
Buy Canadian moment creates opportunity for Roots and its domestic leather business
TORONTO — Rifling through the Roots Corp. product archives on a recent Thursday morning, CEO Meghan Roach is surrounded by the kind of heritage 'most consumer brands would die to have.' In every direction she turns are racks of leather jackets spanning the company's 52 years. Some are replicas of custom pieces gifted to Toronto Raptors players for their 2019 championship win, the cast of Saturday Night Live for its fiftieth anniversary or the Jamaican bobsled team that inspired the 'Cool Runnings' film. Others are even more rare: a forest green jacket stitched with a floral and friendship bracelet motif for pop star Taylor Swift, and one adorned with snazzy sunglasses and piano key pockets that marked Elton John's retirement from touring, the lining of which features 56 years of albums. What they have in common is an origin story that began with the building Roach is standing in — the Roots leather factory in north Toronto. Chances are, if you bought a leather bag or jacket from the retailer, they came from the Caledonia Road site, which has given Roots bragging rights in an era where everyone wants to buy Canadian. 'Every time I bring someone through the factory, they kind of look at me and say, 'I just didn't realize you did this here,'' Roach said of the facility where dozens of workers cut leather, stitch it together, emboss it and ultimately, handcraft up to 8,000 pieces monthly. The Canadian operation is a rarity these days, after clothing manufacturing largely migrated overseas in the sixties, when brands wanted to reduce costs and offload repetitive and sometimes time-consuming tasks. Roots has not been entirely immune to the allure of international production. It sources some of its clothing in Asia and Europe, but designs everything in Canada, which remains the heart of its leather business. Domestic production has been 'very challenging,' Roach said. Canadian suppliers have been dwindling, so the company has had to look to Italy and France to source leather and even farther afield for zippers. For a time, it had a Canadian company helping it with piping on bags, but they went out of business, so Roots bought its machinery and trained staff to use it. The decision was a point of pride long before shoppers started letting patriotism rule their pocketbooks this year in hopes of countering U.S. President Donald Trump and his tariff whims. The moment has shoppers rallying around any company with a shred of Canadiana so Roach is determined not to let it slip away without customers learning more about the brand's, well, roots. Founders Michael Budman and Don Green were raised in Michigan but met at Camp Tamakwa in Ontario's Algonquin Park in 1963 and 10 years later, decided to head north of the border to start Roots. Initially, they specialized in negative-heel shoes, which reduced pressure on backs, but when the footwear sold out in less than a month and spawned a waiting list, Budman and Green dreamt bigger. They started pumping out varsity jackets, leather bags ideal for weekend getaways and salt-and-pepper sweats. Eventually, they became a Canadian staple with stores dotting the country, a discount airline shuttling people from coast to coast, Matt Damon and Ben Affleck starring in ads and a coveted contract to outfit the nation's Olympic team. Nowadays, the stores remain but the airline has folded, the business no longer sells shoes, ads aren't quite so star-studded and Lululemon Athletica Inc. outfits Team Canada. Budman and Green? They sold a majority stake in Roots in 2015 to Searchlight Capital Partners L.P., a firm split between Toronto, New York, Miami and London. Roach worked at the firm before joining Roots. When she took the top job in the wake of the COVID-19 pandemic in May 2020, she was inheriting a brand Canadians adored but that needed to get some of its groove back. 'Because it's 50 years old, you have to be really careful in terms of how you modernize it,' she said. 'You can't just wake up one day and change everything, so we've been slowly over the last five or six years, making small tweaks and changes.' Having heard from customers who wanted less dominant logos on their clothes and softer fabrics across more products, Roach introduced new lines with minimal branding and expanded the brand's use of comfier materials. She sold the items in stores slowly being revamped to have a brighter and lighter feel that is less reminiscent of a cabin and more like a burst of freshness from the great outdoors. She also decided Roots needed to do a better job of telling its story, so it invested more heavily in digital marketing and brought on brand ambassadors. Some of those efforts are working because Roots appears to have stronger margins and renewed consumer interest, said Liza Amlani, principal of Retail Strategy Group in an email. But she still feels the brand has work to do because 'not all stores are consistent in the customer experience and many are packed to the brim with product' that needs to keep evolving if Roots wants to hang onto customers long after the buy Canadian bubble bursts. These days they're marketing a Canada collection of red-and-white apparel, T-shirts dedicated to local waterways like Okanagan Lake and leather goods like an emoji bag charm with maple leaves for eyes. Roach insists the unabashedly Canadian items aren't a sign that other markets aren't still a priority. When she joined Roots, she relaunched the brand in China and began plotting to expand its presence even further into the U.S., where it has two stores. That plan is still on the table, even now that Trump has chosen Canada as one of his top tariff targets, because she says, 'there's a huge amount of potential there once we get through the current volatility.' 'The thing about being with a brand that's been around for 50 years is you have to look past the short-term nature ... like not what's happening next month or next year but what's going to happen over the next 10 to 15 years,' she said after strolling the leather factory. 'You're thinking what do I have to do and invest in and what are the green shoots I have to build today for this business to be successful more over a longer period of time?' This report by The Canadian Press was first published June 16, 2025. Tara Deschamps, The Canadian Press
