Tuesday, November 28, 2023

EXCLUSIVE: Arc’teryx Opens Up About Growth Strategy, With U.S. Seen Key

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Arc’teryx, a technical high performance brand turned cult luxury product and — more recently — a downtown New York City meme, is ready for worldwide expansion.

Industry experts estimate that the North Vancouver, British Colombia-based brand could see sales grow by up to 25 percent each year, and potentially double its store count over the coming years.

It is understood that much of that growth is seen coming in North America, with New York being the key focus that brand executives feel is the region’s center for brand heat.

Additional measures — like an expanded accessories assortment, a new store concept, a resale and repair program and upgraded e-commerce experience — will push Arc’teryx closer to meeting its strategic goals. All the while, the brand says it will continue to dig into its athletic community and functionality-minded design process rather than diving into accelerated fashion cycles and trends.

In a statement to WWD, the brand’s chief executive officer Stuart Haselden said of the company’s growth: “In the past few years we’ve undertaken a radical vertical transformation, entering new communities, and reentering some that we’ve been in before. 2023 will be a major year for North America, with some critical investments made globally, and even more in 2024. We see our role as community-builders, and aim to equip the guests who enter our stores with more than product but the knowledge and support to get into their next great adventure.”

Arc’teryx was founded in 1989 by experienced climbing athletes and was acquired in 2005 by Amer Sports, which also counts Salomon and Wilson as subsidiaries. In 2019, Chinese conglomerate Anta Sports Products Limited purchased a controlling stake in Amer and dialed up investments in the company’s brand portfolio, including Arc’teryx. This expansion is self-funded and does not include outside capital, according to Arc’teryx.

The brand is best known for its slick outerwear with a steely color scheme, trim proportions and a minimalist bird skeleton insignia that has made it a status symbol in both urban centers and on mountainsides. Arc’teryx is an abbreviation of that bird’s name, known by archeologists as the archaeopteryx lithographica, or first dinosaur thought to take flight.

Arc’teryx’s Flatiron New York City store.


The company’s products are priced higher than fellow premium outdoor category players including Patagonia, which — despite being priced 30 percent or so lower than Arc’teryx — is oft referred to as “Patagucci.”

Arc’teryx’s average shell jacket starts at $160 and Gore-Tex waterproof versions at $400, while base layers begin at between $100 and $150. Down winter coats start at around $700. The brand relies on a layering system — meaning that for optimal performance and warmth, consumers may purchase multiple products, racking up extra dollars spent.

Despite their high price tag, Arc’teryx jackets have become a status symbol among disparate social groups in New York City: a must-have for New York University students shopping with their parent’s credit card; Wall Street executives on blustery days, and corporate lawyers who take Arc’teryx as their off-duty, Upper West Side dad uniform. The brand took notice — and spied opportunity.

Until now, Arc’teryx as a label has remained generally low key, its executives quiet about strategy and its marketing limited.

Arc’teryx is finally ready to speak publicly about what it represents. Said vice president of brand Karl Aaker: “As we expand our goals and grab more of a mindshare of the consumer out there, we have a chance to say something more meaningful and push that global narrative in a way we haven’t in the past.”

Chief commercial officer Delaney Schweitzer added: “I knew nothing about the brand [before I worked here], but I had so much respect for it. The biggest opportunity we have is telling our story — not only who we are, but our commitment to sustainability, values and commitment to being outdoors. Community is a big part of what we do and are, [we] don’t want to be too exclusive and shut the door.”

Aaker cautioned that this new openness will be handled in a strategic manner: “The media landscape changes so quickly and the way to connect with people is constantly evolving. We don’t want to add noise to the world, we want to say something that is worthwhile. We did that in New York with an abstract sensory experience in Brooklyn that was a lot of fun and brought our community together. We did out-of-home advertising around the city to share our brand message across the boroughs.”

New York’s influence across North America means that the city will see a huge boost in retail activity relating to all things Arc’teryx.

A Rebird center in Boulder, Colorado.

In December, Arc’teryx opened a 6,600-square-foot store at 149 Fifth Avenue in the Flatiron District. This preceded what will be Arc’teryx’s largest-ever global store, set to open in SoHo. The 12,000-square-foot space at 580 Broadway is expected to open at the end of this year.

Schweitzer said that “the U.S. is our number-one focus. Showing up and winning in the U.S. is critical for success globally. 2023 is the year of New York for us; we are opening another big store on Broadway that will be our biggest expression yet.”

These openings follow the first-ever global location of Arc’teryx’s “Rebird” program, which opened at 547 Broadway in late 2021. The concept shop, which allows shoppers to bring their worn products for trade-in credit or repairs, originally opened as a test during the pandemic and remained longer-term. The program has been such a success that there are now six global locations, including storefronts in Tokyo and Beijing.

Schweitzer said of the program, “Service centers for aftercare and repair keeps our product in the market for a lifetime. It’s about being sustainable as we scale. I, for instance, love a new ski suit every year but don’t want to throw away my jacket — so you can get trade-in vouchers. We want new products to stand for something and about keeping product in the market for longer.”

The brand’s current New York City Rebird center will close March 30 and be transferred into the larger SoHo store when it opens in late 2023.

Arc’teryx is expanding its footprint with the goal to make the U.S. its top market. “The U.S. is not our top market but it’s weighted as the most important market. If you look at China and North America, it’s the same in terms of revenue. We’ve done really well in the U.S. and we just started that expansion,” Schweitzer said. The brand’s China business is run independently in coordination with Arc’teryx’s global standards and executive team.

Additional regional emphasis is being made in Japan as well as in Europe, where Schweitzer feels that there is ample opportunity at ski resorts in France and Germany.

This is amid a wider strategy to flip Arc’teryx’s business model. The company is in the midst of a five-year plan to become more vertically integrated. Three years ago its business was about 80 percent wholesale and 20 percent direct-to-consumer. Amer would like to see that order reversed, with the ultimate goal being 80 percent of sales coming direct.

In North America that plan, even without a fully realized store count, is advancing quickly. In 2022 sales in the region were around 75 percent direct and 25 percent wholesale.

All the while Arc’teryx is digging into its place as a performance wear outfitter, despite becoming a fashion statement for city slickers. “We are 100 percent designed for the mountains and because our technology performs so well you can wear it in the city as a fashion statement,” Schweitzer said.

The brand has a spin-off line called Veilance that offers a wardrobe of fashionable city wear made from Arc’teryx high-performance fabrics.

Arc’teryx’s fashion-forward Veilance line in its Flatiron store.

The two lines are merchandised side-by-side as part of the company’s new store concept that looks to demystify the Arc’teryx layering system. The concept includes a wall of jackets that make their various features easy to read, as well as a central drafting table where associates can help arrange these layers into a dressing system. The store concept is now being rolled out worldwide.

Similarly, the company is refining its e-commerce website to make its product line easier to understand. “In our visual merchandising strategy we have created an online experience similar to how we do in-store. It’s about showing our product in a way that’s intuitive,” said Schweitzer.

Aaker emphasized the company’s women’s and accessories assortments are seen as “big growth opportunities to continue resonating with a broad audience.” This spring, Arc’teryx will release a wider breadth of shoe designs as it looks to capture a slice of the booming stylish performance footwear market.

But according to him, this is all being done with a higher purpose in mind: “The idea of timelessness has big meaning for us. We hold ourselves accountable and don’t want to create waste or excess. We are making choices on how to tell stories and make products that we are proud of 10 years from now, and not chasing a trend as part of that.”

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