How Canada could be­come a global fash­ion pow­er­house

The Globe and Mail (Prairie Edition) - - OPINION - QASIM MO­HAM­MAD

Ad­di­tional cap­i­tal and some cre­ative col­lab­o­ra­tion are all that is re­quired to give the coun­try’s ap­parel in­dus­try the push it needs to com­pete world­wide

Toronto-based tech­nol­ogy en­tre­pre­neur and in­no­va­tion ad­viser at the Cana­dian Arts and Fash­ion Awards

Canada is ex­pe­ri­enc­ing a tech­nol­ogy re­nais­sance. But there is an­other in­dus­try that is ready for its time in the spotlight: fash­ion.

Over the past sev­eral years, the ad­vent of new me­dia plat­forms, a global shift in man­u­fac­tur­ing to Asia and a new-found cul­tural aware­ness at­trib­ut­able to glob­al­iza­tion have pre­sented Cana­dian fash­ion de­sign­ers with a va­ri­ety of op­por­tu­ni­ties and chal­lenges. For some, these trends have en­abled new avenues for in­ter­na­tional ex­po­sure and a chance to run leaner busi­nesses op­er­a­tions. But for oth­ers, these same trends have made it dif­fi­cult to com­pete with for­eign brands that seem to have dis­cov­ered an un­shak­able for­mula for world dom­i­na­tion.

De­spite the op­por­tu­ni­ties and chal­lenges pre­sented by the con­stantly evolv­ing $2.4-tril­lion (U.S.) global fash­ion in­dus­try, Canada con­tin­ues to hold its own. When con­sid­er­ing pub­lic com­pany data for tra­di­tional ap­parel and ac­ces­sory com­pa­nies as an in­di­ca­tor of eco­nomic per­for­mance and wealth cre­ation, it be­comes ev­i­dent that we have the ca­pac­ity to build ma­jor fash­ion brands in our coun­try. The data be­comes even more com­pelling when com­par­ing Canada with the top global fash­ion mar­kets: France, Italy, Bri­tain and the United States.

There are 117 pub­licly listed ap­parel and ac­ces­sory com­pa­nies (ex­clud­ing ap­parel re­tail) head­quar­tered in Canada, France, Italy, Bri­tain and the United States. It is in­ter­est­ing to note that Cana­dian brands have cre­ated more value on an ab­so­lute and per capita ba­sis when com­pared with Bri­tain. Our brands also trade at the highest av­er­age price-to-sales ra­tio, which is be­cause of higher reve- nue growth rates, av­er­ag­ing in ex­cess of 50 per cent year-overyear.

The pub­lic com­pany statis­tics are pos­i­tive for Canada. In­deed, the ap­parel man­u­fac­tur­ing in­dus­try’s con­tri­bu­tion to our GDP has de­creased at an av­er­age rate of 4.8 per cent since 2011 – after all, it is ex­tremely dif­fi­cult to com­pete with pro­gres­sively lower pro­duc­tion costs in coun­tries such as China. But Cana­dian brands have rec­og­nized that in or­der to cre­ate wealth through the lo­cal fash­ion in­dus­try, an em­pha­sis must be placed on non-man­u­fac­tur­ing, high value-added parts of the global ap­parel value chain. This in­cludes ac­tiv­i­ties such as de­sign, re­search and de­vel­op­ment, brand­ing, mer­chan­dis­ing, mar­ket­ing, lo­gis­tics and dis­tri­bu­tion.

In or­der to en­sure that the Cana­dian fash­ion econ­omy con­tin­ues to move into the higher por­tions of the global ap­parel value chain, in­dus­try in­sid­ers and pol­icy makers need to re­main fo­cused on en­abling the fol­low­ing:

Ac­cess to cap­i­tal. Ac­cord­ing to pri­vate com­pany data plat­form Pitch­book, in­vest­ments in Cana­dian pri­vate ap­parel and ac­ces­sory com­pa­nies have de­clined at a rate of 1.4 per cent since 2006. Dur­ing the same pe­riod, in­vest­ments in the United States have in­creased 7.2 per cent. Be­ing able to at­tract cap­i­tal as a young de­signer is the first step to­ward build­ing a big busi­ness, and Canada’s pri­vate in­vest­ment com­mu­nity needs to wake up to the opportunity in fash­ion. Gen­er­at­ing con­sumer aware­ness. We need to sup­port ini­tia­tives that pro­mote Cana­dian brands and make them ac­ces­si­ble to the masses, such as the Cana­dian Arts and Fash­ion Awards and the var­i­ous city­fo­cused fash­ion weeks. Com­mu­ni­ca­tion be­tween fash­ion and other in­dus­tries. Canada has a grow­ing pool of ex­per­tise in ma­jor in­dus­tries such as tech­nol­ogy. There are many op­por­tu­ni­ties for col­lab­o­ra­tion be­tween fash­ion and other in­dus­tries to drive in­no­va­tion, par­tic­u­larly as it re­lates to tex­tile re­search and de­vel­op­ment, brand­ing and lo­gis­tics.

It is dif­fi­cult to ad­dress the chal­lenges high­lighted above with­out a plan to cre­ate high­im­pact fash­ion clus­ters across the coun­try, which would bring the right pool of tal­ent and re­sources to­gether to pro­pel the in­dus­try for­ward and gen­er­ate sig­nif­i­cant eco­nomic im­pact in hy­per-lo­cal con­texts. This is es­pe­cially im­por­tant since Canada doesn’t have one gov­ern­ing voice for the fash­ion in­dus­try, as is the case in the United States, France and Bri­tain.

Luck­ily, we have nat­u­ral hotspots such as Van­cou­ver, Toronto and Mon­treal. These cities host the largest cre­ative arts scenes in the coun­try, as well as di­verse busi­ness and tech­nol­ogy com­mu­ni­ties that the fash­ion in­dus­try needs to col­lab­o­rate with closely.

The ben­e­fits of clus­ter­ing are com­pelling when eval­u­at­ing New York, the most no­table fash­ion clus­ter in North America. The city is home to more than 900 fash­ion com­pa­nies that em­ploy more than 183,000 em­ploy­ees, who are paid nearly $11-bil­lion in wages and gen­er­ate al­most $2-bil­lion in tax rev­enue each year. Its semi­an­nual fash­ion weeks at­tract 232,000 at­ten­dees to more than 500 shows, gen­er­at­ing an eco­nomic im­pact of close to $1-bil­lion an­nu­ally. With num­bers like these, the missed op­por­tu­ni­ties as­so­ci­ated with not sup­port­ing fash­ion com­mu­ni­ties in ma­jor Cana­dian eco­nomic cen­tres are ev­i­dent.

Canada is a coun­try of brand builders. We have in­spired an en­tire gen­er­a­tion with brands such as Lu­l­ule­mon and Canada Goose. Our po­ten­tial to lead on the global fash­ion stage is ev­i­dent through our pre­vi­ous track record, and it is crit­i­cal for the cre­ative and busi­ness com­mu­ni­ties to col­lab­o­rate to en­sure that we can be­come lead­ers in this ex­cit­ing, and equally lu­cra­tive in­dus­try.

XAUME OLLEROS/BLOOMBERG

Canada’s ca­pac­ity to join es­tab­lished play­ers and lead on the global fash­ion stage is ev­i­dent in light of the mas­sive suc­cesses of brands such as Lu­l­ule­mon and Canada Goose.

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