Aritzia CEO fashions family business into international success: CEO SeriesMay 03, 2013
The spring series of CKNW 980’s “The Chief Executives” concluded with Brian Hill, CEO and co-founder of fashion retailer Aritzia, discussing his hands-on approach to the fashion retail industry with CKNW host Bill Good in front of a live audience at the Segal Graduate School.
The event was part of an ongoing partnership between the Beedie School of Business and prominent Vancouver radio station CKNW News Talk 980 to bring leadership and business insights from some of Canada’s top executives to SFU’s downtown Vancouver campus.
As a third generation fashion retailer, Hill grew up working in the family business, which Good assumed negated the need for him to ask what his first job was. Hill revealed however, that one summer he worked in a role that to this day remains his favourite job – a garbage man.
“I came home from school one summer and told my dad that I wouldn’t be working for him, and would instead be working as a garbage man,” said Hill. “He thought I was out of my mind, but the job was great. I got a suntan and became really fit from lifting all those garbage cans. Back then you were able to ride on the back of the garbage truck, so I would be hanging on while it drove at 40 miles per hour down Granville street.”
When the ripples of laughter in the audience had settled, Hill moved on to discuss more traditional aspects of business, beginning with the secrets of Aritzia’s success during what have been tough economic times for retailers. He explained that it would be difficult for Aritzia to have successfully expanded without manufacturing their own products, and that while some of their success has been based on luck, many of their strategic decisions have paid off.
He recounted the example of their decision to integrate SAP software into their company early as a strategic decision that has reaped dividends for them. Although SAP is used by the majority of Fortune 500 companies, Aritzia was a small company when they opted to go down this route. Hill said that while the integration process had been difficult and costly at the time, it had paid off for the company in the long term.
Good then inquired about Aritzia’s manufacturing process, and whether Hill monitors the working conditions of the people making their clothing. “Our manufacturing is primarily conducted in Asia, and China specifically, but we have a code of conduct and social environmental policies that we follow,” Hill replied. “We have a full time auditor who flies round the world to visit our factories and ensure standards are met. So we have the wherewithal in our own company, but we also back it up by employing a third party too. It is an integrated part of our decision process.”
On the subject of the company’s successful expansion beyond BC into other Canadian provinces, Hill explained that they made four key strategic decisions: to design and manufacture their own product; to computerize their operation; to create a template for their stores; and to build an infrastructure for the business, for both their employees and the systems they had in place.
Once the Canadian expansion was successful Aritzia moved into the US market, where it now has 12 stores across Chicago, San Francisco, Seattle and New York. Asked what the challenges of breaking into the US market were, Hill responded that they were forced to build their brand reputation almost from scratch, not just with their customers, but also with employees.
When pressed on how they built their brand in the US, Hill revealed that store location was the key. “We like to have great locations,” he said. “They are costly, but you are guaranteed traffic. You have to have the right traffic, but the market we are in is fairly straightforward. However we have not figured out how to open stores in California or Florida yet, where the weather makes many of our products difficult to sell.”
Hill then discussed his role in the buying process, where he revealed that, while not as involved as he once was, he does play an active part in deciding what items the chain will sell.
“It’s one of my favourite parts of the business – walking into a legal or financial meeting isn’t nearly as interesting as going into a fashion meeting,” he said. “Our product floor has some 150 people working on it with presentations and approval meetings occurring throughout the year. 90% of the time I am involved in those meetings. Over the years you become not quite as tuned into trends and other parts of the business demand more of my time, however, there is not a single item produced by Aritzia on the shop floors that I have not seen before it is sold.”
Over the course of a fascinating interview, Hill fielded questions from a highly engaged audience, covering topics such as the dynamics of working in a family business, the mistakes he has made in his career, the importance of online retail in today’s market, whether Aritzia can thrive as a purely online retailer, and the challenge of competing with high street fashion giants such as Zara and H&M.
Finally, Hill brought the curtain down on another enthralling CEO Series with a story of a recent lunch with British Columbia business legend and longtime SFU supporter Joe Segal. “I was sitting across from Joe, and he looked at me and said, ‘Brian, what’s your most valuable asset’,” said Hill. “I looked at him as though it was a trick question. Joe then said, ‘It’s your time. Your life is a runway, and your runway is far longer than mine. I would trade all my money for your runway. And Brian, I’ve got a lot of money’.”
To see all the interviews from the 2013 CKNW CEO Series, visit http://beedie.sfu.ca/events/2013-cknw-ceo-series/