Fashion company capitalizes on nostalgia for iconic North American brands

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Operating under the Red Canoe label, the apparel and accessories company designs and manufactures products that incorporate the logos and trademarks of well-known Canadian and international companies, under license agreements with their owners.red canoe

THE CHALLENGE

In the competitive fashion industry, countless new brands are created every month, but only a few survive the season – and even fewer manage to build a lasting relationship with consumers and achieve long-term profitability.

Two significant challenges in the industry are the cost and effort required to establish a unique brand image and then defend it against replicas or counterfeits that can destroy hard-earned brand equity. In the apparel industry, consumers are increasingly looking for quality, value and authenticity. But how can a new business achieve this without a massive retail presence and marketing budget?

Dax Wilkinson, Founder, President and Chief Creative Officer of National Heritage Brands Inc. of Toronto, has developed a unique strategy to engage consumers and protect the company’s products from copycats. Operating under the Red Canoe label, the apparel and accessories company designs and manufactures products that incorporate the logos and trademarks of well-known Canadian and international companies, under license agreements with their owners.

Many companies and organizations, even those that may no longer exist, resonate strongly with certain consumer groups. Mr. Wilkinson realized that using these names and logos would appeal to a wide range of consumers who hold positive associations with the brands. He starts with icons he feels some connection to, then tries “to imagine other people who would have the same interest or have been exposed to the same icon in some way. Ideally, the icon has an appeal that is not merely regional, but is national, continental or global in its recognition and appeal.”

“There are many brands that have the same nostalgic impact as a Harley Davidson, but no one does anything with,” Wilkinson said. “For 14 years, we have been identifying high-capital brands and developing best-selling products around them around the world.”

THE BACKGROUND

Mr. Wilkinson learned about the apparel industry at an early age spending time in his family’s clothing business in Sudbury and later as an entrepreneur developing apparel products for sports such as hockey , basketball and baseball. Also a pilot, he understood the appeal of Canadian aviation culture and saw a market for products designed around logos. Thus, Red Canoe was born in 2002.

THE STRATEGY

With a single showroom in Toronto, the company sells wholesale to specialty vendors located in high-traffic tourist areas or places where enthusiasts of its product lines or brand are likely to congregate. Aviation enthusiasts, for example, would find products of interest to them at aviation museums, flight schools and major airport retailers. This approach reduces retail and marketing costs, while giving Red Canoe access to distribution in locations where a stand-alone retail store would not be commercially feasible.

Retail online via Red Canoe website grow, bringing its products to fans of its logos and licensed brands around the world.

In the Canadian market, Red Canoe evokes the spirit and tradition of iconic companies and organizations such as the RCAF, De Havilland, CBC, RCMP and Canadian Pacific through licensed apparel and accessories. .

The logos and graphics used are not always current, but often date from the heyday of that product or associated organization. These vintage logos can have a special appeal.

When looking to expand internationally, the US market was an obvious first step, but Red Canoe needed to adjust its strategy. Mr. Wilkinson understood that “the CRA and the RCMP are not going to sell [there] so we developed an American Aviation Heritage Collection,” using Boeing, Lockheed and NASA. If these product lines prove successful, Red Canoe may introduce its full portfolio using Canadian or other country licensed brands.

THE RESULTS

Having successfully ventured into the US market, Red Canoe is targeting the UK and is currently developing a collection that includes British aviation icons such as De Havilland Aircraft and the Avro Lancaster, among others.

International sales currently account for 28% of total annual turnover and the share of these sales continues to grow.

About 15 percent of Red Canoe’s sales are generated online and provide a useful indicator of which brands and logos resonate in which markets.

“Internationally, I see a market for products featuring North American vintage icons,” Wilkinson says. Results to date suggest that markets as distant as Italy, Japan and Taiwan present strong opportunities for expanding product lines using North American and local icons.

International sales also helped shield Red Canoe’s bottom line from recent fluctuations in the Canadian dollar. Most of its production and supply costs are denominated in US dollars, while the Canadian market is the largest, putting pressure on the company’s margins. International sales are in US dollars, thereby offsetting some of the reduced Canadian profits.

Red Canoe has found a way to differentiate its products from the competition, as well as connect and build lasting relationships with specialty suppliers and specific consumer segments around the world. In doing so, this model has helped the company open the door to a whole range of opportunities in different international markets.

Melanie Chang Fung is an MBA candidate at the Schulich School of Business and an associate at Schulich’s Center for Global Enterprise.

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