News Column

Tommy Bahama Buys Canadian Operations

May 8, 2013

Amy Martinez

Seattle-based retailer Tommy Bahama, which expanded last year to several Asia Pacific markets, now has its sights set on Canada.

The company said Tuesday that it bought the clothing brand's Canadian operations from longtime licensee Jaytex Group, with plans to speed up growth north of the border.

The deal includes nine Tommy Bahama stores and a wholesale business in Canada.

Tommy Bahama's Atlanta-based corporate parent, Oxford Industries, did not disclose financial terms, but it did say the deal is expected to contribute sales of $10 million and "modestly" increase earnings in fiscal 2013.

Doug Wood, president and chief operating officer at Tommy Bahama, said growth mostly will come from expanding and updating the nine stores and possibly moving them to more prominent locations. There are no plans for new Canadian stores, he said.

"One of our objectives is to get the same look and feel of the brand in both markets," he said. "We have so many Canadian guests who travel to Hawaii, or Scottsdale, or Palm Springs, and because we have a licensee in Canada, we can't market directly to them.

"We think we can do it better and grow the business in Canada," he added.

The deal follows Tommy Bahama's purchase last year of its license in Australia, where it has five stores and a sixth set to open next week in Sydney.

Also last year, the company launched new stores in Hong Kong, Tokyo, Macau and Singapore, as well as a New York City flagship, giving it a worldwide total of 113 stores at the end of January.

Total sales increased 17 percent to $529 million in 2012, and operating profit rose 8 percent to $70 million.

The company employs about 350 people locally, including a Federal Way call center and Auburn warehouse.

Wood said the Canadian business will be run out of Seattle, and with permission in place from the Port of Seattle to convert its Auburn warehouse to a free-trade zone, the company won't need a separate Canadian distribution center.

Tommy Bahama is the latest U.S. retailer to look to Canada for growth. Others include Nordstrom, Target, J. Crew and Ann Taylor.

"It's a good market," Wood said. "It's not too different than what we bring in Bellevue Square or University Village."


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