Despite a strong retail pedigree — Kit and Ace was founded by members of the same family that launched Lululemon Athletica — the Canadian active brand, known for its technical luxury fabrics, has succumbed to the unsparing retail environment. Kit and Ace will close all 32 of its stores, which are mainly in the U.S., to focus on nine Canadian units and its e-commerce site.
Layoffs at Kit and Ace’s Vancouver headquarters on Thursday reportedly included president Wendy Bennison, who joined the company last year as president. The former chief operating officer of Roots Canada Ltd. was working on developing an omnichannel roadmap for Kit and Ace and elevating the customer experience.
The brand in 2016 had 700 employees and 61 stores across North America, Australia, the United Kingdom and Japan. However, the store count fell to 41 last month and layoffs began.
Kit and Ace was launched in 2014 under the leadership of J.J. Wilson and his stepmother, Shannon Wilson, who is married to Chip Wilson, founder and former chief executive officer of Lululemon. The Wilson family reportedly was prepared to invest $300 million to fund the rollout. J.J. Wilson said that as an exciting new concept, “our brand isn’t fighting for real estate,” and projected Kit and Ace would become a $1 billion retailer by 2019.
“We recognize the traditional world of bricks and mortar retailing is changing, which is why we’re shifting strategies,” Wilson, a founder and principal of Hold It All Inc., which owns Kit and Ace, said in a Facebook post. “We believe in the business model for Kit and Ace. Going forward, we will be a stronger company. Fewer stores require fewer people. We remain deeply grateful for the creativity and commitment of those leaving the company and thank them for their valuable contribution.”
Craig R. Johnson, president of Customer Growth Partners, said despite Kit and Ace’s attempts to position the brand for everyday use, it was viewed by consumers as performance wear. “The growth rate of performance wear peaked almost two years ago,” Johnson said. “Meanwhile, capacity continued to grow with Lululemon, Under Armour and its Kohl’s collection, Sweaty Betty, Lorna Jane, Athleta and Fabletics. All these brands added more square footage to the market than the slowing growth of the category merited.
“So, now the sector is in overcapacity,” Johnson added. “The weaker players, including those with a less than compelling value proposition, are getting weeded out.”
Yoga Smoga, an upscale yoga apparel brand made from proprietary fabrics with performance qualities, filed in December a Chapter 11 petition seeking bankruptcy protection. At the time of the filing, Yoga Smoga operated 12 stores, including one in Manhattan. Yoga Smoga’s cofounder Rishi Bali’s aggressive plans included having 100 units in operation by 2018 and becoming a $1 billion brand by 2025.
“Kit and Ace began with the idea of creating a fabric that could push the limits of traditional cashmere,” said Shannon Wilson, who joined Lululemon in 2000 as its lead designer and created some of the company’s key products, including its logo hoodies and groove pants. The soft, laundry-friendly fabric Wilson developed is a proprietary blend of cashmere, viscose and elastane fabric, formulated in Italy and trademarked “technical cashmere.”
To that end, the brand on March 19, hosted in conjunction with The Big Quiet a mass meditation and sound experience at the top of the World Trade Center. The evening featured an intergroup prologue, string musicians, vocalists and live DJs. This event raised funds for the Foundation for Ethnic Understanding in support of its mission to reduce tensions among diverse racial and ethnic communities. The previous year, 1,000 people signed up for a similar event scheduled for the Oculus and the World Trade Center.