Dive Brief:
- Aritzia has acquired the Fred Segal brand and leased its flagship destination in Los Angeles, the company said in a Thursday press release shared with Retail Dive.
- As part of the effort, Aritzia will restore the flagship store on Melrose Avenue, including revitalizing the facade’s ivy. The location will “evolve into an entirely new, experiential destination,” per the release.
- The acquisition is a step in Aritzia’s long-term strategy to grow in the U.S.
Dive Insight:
The acquisition of the legendary Fred Segal brand is an expansion of Aritzia’s Everyday Luxury plan to offer beautiful apparel in inspirational spaces.
“Fred Segal has long been a cultural touchstone in Los Angeles — a place where creativity, community and style converge,” Jennifer Wong, CEO of Aritzia, said in a statement. “We are honoured to steward and evolve this iconic brand for a new generation with the elevated experience and Everyday Luxury that define Aritzia.”
The flagship location will feature curated products, immersive experiences and serve as a lifestyle hub, according to Aritzia.
Fred Segal helped define “California cool” and was renowned for highlighting upcoming designers.
The business was acquired for an undisclosed amount by brand licensing company Global Icons in 2019, with plans to expand its brick-and-mortar locations.
Those aspirations were short lived, with Fred Segal shuttering its remaining stores by 2024. At the time of those store closures, it was unclear if the brand’s intellectual property would be put up for sale.
Now, Aritzia wants to honor the brand’s heritage while “reimagining its future for a new generation,” according to the fashion company.
Fred Segal could prove to be a vehicle for growth for Aritzia in the U.S. and potentially allow for the development of a larger menswear business, according to Neil Saunders, managing director of GlobalData.
“Aritzia is a master of brand building, storytelling, and product development and production,” Saunders said. “It is betting that it can use all these skills to revive Fred Segal and make it commercially sound.”
The acquisition is future-focused instead of being a means to bolster short-term numbers, according to Saunders.
“The affection in which Fred Segal is held, along with a sliver of nostalgia, provides the basis for rekindling the business,” he said.
In Aritzia’s latest quarter, net revenue increased nearly 43% to a little over $1 billion, with comparable sales growth of 34.3%. Net revenue in the United States in Q3 increased 53.8% to $621 million compared to the year-ago quarter, driven by the company’s real estate expansion, growth in e-commerce and strong comparable sales growth.
Fred Segal, the person behind the namesake brand, passed away in 2021 at the age of 87.
