Kit and Ace, the technical apparel company started by Lululemon Athletica inc. founder Chip Wilson and his family, is laying off staff and is closing all of its U.S., U.K., and Australia operations.
Hold It All Inc., the Vancouver-based holding company which owns Kit and Ace, issued a statement saying that the layoffs and store closures in the three countries will help the company simplify its plans and operations.
“We recognize the traditional world of bricks and mortar retailing is changing, which is why we’re shifting strategies,” said Wilson. “We believe in the business model for Kit and Ace. Going forward, we will be a stronger company.” He added: “Fewer stores require fewer people.”
Wilson launched the athletic leisure (athleisure) company in 2014, promoting technical cashmere and luxury athleisure clothing designed to be worn both inside and outside of the gym. Because of early successes in Canada, the company quickly expanded into international markets, most notably the U.S., the U.K., and Australia, where it operated 26 stores. By early 2016, Kit and Ace had grown to 61 stores in five countries, with 700 employees.
Because of the tough retail environment and stiff competition from Lululemon (Wilson stepped down from the Lululemon board in February 2015), the once-fast-growing luxury clothing chain laid off 20% of its 280 head-office staff in the fall of 2016, after letting go 35 employees in February of that same year.
Where some retailers are struggling to compete with online giants like Amazon and Walmart, Kit and Ace’s troubles may have started because of its rapid international expansion before fully developing its brand.
If Kit and Ace’s expansion efforts had relied more on organic sales and less on corporate funding, chances are that Kit and Ace would not have grown as quickly and, therefore, would have avoided the kinds of problems it has run into.
Kit and Ace is now shifting its focus to its nine remaining Canadian showrooms and its e-commerce platform. Whether more store closures and layoffs are in the future, and whether Kit and Ace will move to an entirely online platform, are open for debate.
“Clothing chain Kit and Ace closes stores outside Canada,” The Globe and Mail, April 26, 2017.