Aritzia Inc. SWOT and PESTLE Analysis

Strength

1. Good community and employee engagement: In light of the COVID-19 pandemic, Aritizia ensured that their employees were financially protected after the store closures. They made a donation of $25 million to their employees from the Aritzia CommunityTM Relief Fund. They also undertook a Community Care Program for Aritzia’s frontline workers where 120,000 custom clothing packages were gifted to the frontline workers. No worker was laid off or furloughed during the pandemic. The full proceeds from Aritzia’s Women’s Day Capsule clothing collection went towards supporting women and girls in need. Their initiatives supported more than 300,000 women. The organizations they donated to work towards poverty alleviation, mentorship and improving job readiness for women. The Spring/Summer 2021 collection was made out of 40% sustainable materials.

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Weakness

1. Business highly dependent on timely import of raw materials from foreign countries: Aritzia sources the majority of their raw materials from third party manufacturers in foreign countries. They have agreements with manufacturers who meet their quality standards and provide materials at competitive prices. Their materials are mainly sourced from Chins, Japan, Italy, South Korea, and Taiwan. Their goods are then manufactured in China, Vietnam, Cambodia, Sri Lanka and Peru. Although this reduces their operational costs, because labour is cheaper in these countries as compared to USA or Canada. However, this also increases their risk of business. Aritzia becomes exposed to geopolitical risks in their operating countries as well as the countries they source and manufacture in. The recent pandemic affected these countries more severely and governments around the world laid down travel restrictions. This led to disruptions in Aritzia’s supply chains.

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Member of the UN Global Compact Program: The United Nations Global Compact is the world’s largest corporate sustainability initiative. It is a non-binding pact that encourages businesses around the world to adopt sustainable and socially responsible policies and submits yearly reports highlighting their accomplishments and mentioning their future goals. The UN Global Compact requires companies to follow ten principles in the areas of labor, environment, human rights and anti-corruption. The program has over 12,000 companies from over 120 countries. Artizia is a member of the UN Global Compact and in FY21 they achieved carbon neutral status in their offices and boutiques. They also purchased certified Green-e-Energy from wind projects and certified carbon offsets through the EcoAct.

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