It’s conquered Canada and fended off tough foreign rivals since 2007. Now Montreal-based retailer Groupe Dynamite — the $500-million-a-year company behind the Garage and Dynamite fashion chains — is setting its sights on major expansion in the U.S.
“Our objective is to have 500 stores in the U.S. within the next five to seven years,” company president Anna Martini said. “This brand wants to go global. But to do that, we’ve had to become more agile and more responsive to our customers. We haven’t stood still while the market and consumers have changed.”
Groupe Dynamite operates 45 Garage stores in the U.S., as well as 25 locations in the Middle East and 145 across Canada.
It also has five Dynamite stores in the U.S. and plans to increase that figure to 100 in five years, according to Martini.
Both fast-fashion chains have been merchandised to please two archetypal muses. Alexia, a 16-year-old teenager living at home with her parents, represents Garage’s target audience, while Rachel, 28, is the trendy career woman Dynamite serves. These young women’s fictitious backgrounds have helped Groupe Dynamite connect their brands to a broad and profitable demographic.
The attention to detail — even as far as spritzing Garage stores with a fragrance worn by the boy Alexia likes at school — has also imbued the chains with a “strong sense of self,” according to Andrew Lutfy, the retailer’s chief executive officer and owner. “Everything we do, from designing our clothes to marketing, photo shoots and communicating with customers through social media, has been aligned to these characters and the lives they lead in today’s world,” he said. “That’s what has kept us fresh and distinguished us from our competition. If you’re not unique, you’re in big trouble in today’s market.”
The firm’s $40 million overhaul of its software operations has also strengthened the 30-year-old Dynamite chain and the more-casual Garage, which will celebrate its 40th anniversary in 2015. Four years in development, the software redesign spearheaded by Oracle went live in the summer. “It’s only been five or six months, but what we can do now in terms of leveraging data and understanding the merchandising needs in each of our stores is impressive,” said Lutfy.
Groupe Dynamite can access a quick, single view of its global inventory, logistics, marketing information and customer comments.
These technological changes have laid the groundwork to enable consumers to engage in commerce anywhere they choose.
“Our goal is to offer our customers the right garment at the right time and in the right place,” said Lutfy, a college dropout who began building his empire back in 1982, when he worked in the stockroom of his father-in-law’s Montreal store.
With the implementation of Enterprise Resource Planning, as well as its upcoming customer-relationship loyalty software, Groupe Dynamite has created what Lutfy calls “the necessary pillars in our omnichannel.”
“Now we can know everything about a customer, whether they’re in Chicoutimi or Texas,” he said. “That is helping us to market to customers in a very individual way, which is absolutely critical in the U.S. market. A Canadian model just won’t work there.”
These priorities, coupled with a $20 million redesign of Groupe Dynamite’s Montreal headquarters, have clearly anchored Lutfy’s ambitions to “be the number-one brand, but not in Canada alone.”
That goal, though lofty, is not unrealistic, according to Terry Henderson, a retail analyst with J.C. Williams Group Ltd. in Montreal. “I think Lutfy could be number-one one day,” said Henderson. “He’s not at the level of an Aldo yet, but there’s a lot of money in Groupe Dynamite and Lutfy is, without question, a Quebec and Canadian success story.”
If he succeeds, it will be due, in large part, to Groupe Dynamite’s consistency, its understanding of its customers and its ability to deliver good service. “This company has a clear product offering and is very clear on how it competes across all levels,” said Henderson, who also credits Lutfy’s ability to sense and react to market changes, to embrace technology and hire a strong team as pluses as the company moves forward.
“Frankly, if the fashion retail business were like playing football, I would consider Lutfy to be one of the best quarterbacks in the game,” said Henderson.