Imprint Canada JulyAugust 2014

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IMPRINT CANADA THE MARKETING AND INFORMATION SOURCE FOR IMPRINTABLE PRODUCTS

A Tristan Communications Ltd. Publication

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Volume 21, Issue 4

13 Big Mistakes Entrepreneurs Make

Excitement Building for 16th Annual Calgary Imprint Show

Some of the costliest mistakes are often disguised as smart business decisions.

Celebrating its 16th year in Calgary, the Western Imprint Canada Show returns on October 17 & 18, 2014 with another event jam-packed with the hottest new offerings from the industry's leading suppliers, showcasing apparel, promotional products, decorating equipment, accessories and supplies. Nearly 90 suppliers have already reserved their exhibit space to showcase their innovative products and services to the more than 1,100 anticipated decision-making executives who will attend this integral event. Attendees will not only benefit from discovering the newest products available, but can also take in educational seminars from renowned industry experts covering topics such as social media marketing, embroidery and heat printing. In addition, exciting contests will make some attendees big winners! One lucky attendee will drive off with the functional and stylish Amego Cyclone Electric Bike, valued at over $1,000. Also, the company that brings the most qualified attendees to the Show will win a special catered staff party at their office! For more information on the Western Imprint Canada Show, please turn to page 10 or visit www.ImprintCanada.com.

By Tom Panaggio

The entrepreneurial life is rife with potential pitfalls. You can pour your heart and soul (and life savings) into a venture, do all your due diligence, toil 80-hour weeks, and just when you’re on the verge of a breakthrough, a competitor sweeps in and decimates your market share. Or a key vendor declares bankruptcy. Or a partner defects with your top client. Or a new law undermines your viability. Needless to say, a lot can go wrong - and that’s why the least you can do is avoid the not-so-obvious mistakes that have derailed so many (call it the "best odds" strategy for entrepreneurial success). "There are certain predictable mistakes that will derail a new company," says Panaggio, author of The Risk Advantage: Embracing the Entrepreneur’s Unexpected Edge. Many of them have to do with misguided attempts to minimize risk. Others are based on misconceptions about how the business world works, what motivates customers, and so forth. And here’s the thing—many of them seem perfectly harmless, even smart, on the surface. Yet when evidence shows something is a mistake—a proven mistake—you must avoid it. Don’t assume that because it doesn’t feel like a mistake that it isn’t. And don’t believe that your case is somehow different or special because it isn’t. Together with several partners, Panaggio has built two thriving companies: Direct Mail Express (which now employs over 400 people) and Response Mail Express (which was eventually sold to an equity fund, Huron Capital Partners). Panaggio wrote The Risk Advantage to help entrepreneurs face the many predicaments and crises they’ll encounter during their lives and to help formulate their leadership style and business strategy.

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Statistics Canada's reports on wholesale and retail sales figures for period ended May'14 38

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IMPRINT CANADA July/August 2014 - Volume 21, Number 3

Follow us: twitter.com/imprint_canada

JULY/AUGUST 2014 So Much For Freedom 55 The Globe and Mail has been publishing a series of articles of late entitled Agenda 2020, which aims to enlighten organizations with approaches to creating strong and healthy businesses which can flourish beyond the year 2020. One article in particular - written by Josh O'Kane - questioned David Foot, Professor Emeritus of economics at the University of Toronto and bestselling author of Boom Bust & Echo: Profiting from the Demographic Shift in the 21st Century; and Marcel Boyer, Professor Emeritus of economics at the UniversitĂŠ de MontrĂŠal and co-author of the C.D. Howe Institute report, The Main Challenge of Our Times: A Population Growing Younger. Foot and Boyer were asked about the demographic challenges that Canadian businesses will face over the next six years as baby boomers decide how much of their time they still want to devote to the workplace upon reaching retirement age, as well as what impact their decisions will have on businesses and government policies. The professors were also asked about the impact that 20-somethings entering the work force with relatively no industry experience will have on the Canadian economy.

Both panelists agreed that the Canadian labour force will shrink as fewer young entrants join the workforce, thereby providing future retirees with extended opportunities to remain employed. Further views expressed in the article highlighted the needs of businesses to overcome the logistical challenges of having older employees work varying schedules and government policies needing to be reviewed in order to accommodate rotating benefit and contribution schedules for retirees who continue to work part-time. The most important solution tabled by the panelists to ease and remedy the 2020 challenge of a reduced labour force was to create a strategic fusion between the 60 year-old knowledgeable industry veteran and the 25 year-old tech-savvy individual in order to create an environment of knowledge, idea sharing and increased productivity. This concept is no different from when I first entered the publishing industry more than 30 years ago. I was mentored by a man in his sixties that was looking to pass on his industry knowledge and experience.

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Creating a dynamic team that brings together diverse skill sets is far and away the best method for employers to maximize benefits and extract the best of both worlds. Sound principles remain sound. They have withstood the test of time for a reason because they are proven to work and provide guidance.

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13 ENTREPRENEURIAL MISTAKES CONTINUED PG 6 INDUSTRY NEWS CASH FLOW MANAGEMENT TIPS WESTERN IMPRINT CANADA SHOW FORESIGHT FOR THE FUTURE BY THE NUMBERS

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WEARABLES SHOWCASE

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AD SPECIALTY SHOWCASE

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SUPPLIES & EQUIPMENT SHOWCASE PUBLISHER Tony Muccilli : tony@imprintcanada.com PRODUCTION MANAGEMENT Adriano Aldini : news@imprintcanada.com

CONTRIBUTORS Tom Panaggio, Adriano Aldini MARKETING COORDINATOR Steve Silva : feedback@imprintcanada.com OFFICE ADMINISTRATOR Maria Natale : shows@imprintcanada.com GENERAL INQUIRIES feedback@imprintcanada.com, (905)856-2600 ADVERTISING SALES

Tony Muccilli (Toronto) Tel: (905) 856-2600 Fax: (905) 856-2667

Imprint Canada is published six times per year by Tristan Communications Ltd. The contents of this publication may not be reproduced either in part or in whole without the consent of the copyright owner. The views expressed in this publication are not necessarily those of the publisher. Request for missing issues are not accepted after three months from the date of publication. TRISTAN COMMUNICATIONS LTD. Publications mail agreement no. 40025740 Return undeliverable mail to: 190 Marycroft Avenue, Unit 16, Woodbridge, Ontario, L4L 5Y2 Email: shows@imprintcanada.com ISSN: 1480-1884 GST Registration #: RT892913294 -XO\ $XJXVW _ IMPRINT CANADA

Industry News American Apparel, Bella+Canvas and Fruit of the Loom now available at Ash City/alphabroder Canada

Gildan Activewear acquires Doris Inc. Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL)

announced a definitive agreement to acquire Doris Inc. (Doris), a marketer and manufacturer of branded sheer hosiery, legwear and shapewear products to retailers in of imprintable apparel. Our goal remains the same to our Canada and the United States. valued customers – to become their one apparel source The initial purchase price is approximately $110 million based on our service, assortment, delivery and convenience.” (all figures CDN), with possible additional contingent Stay tuned for additional styles from Ash City/alphabropayments of up to $10 million, which are based on the der Canada’s private labels, as well as a brand new Fall 2014 achievement of targets for growth in sales revenues. The catalogue for both Canada and the USA coming in August. purchase consideration will be paid in cash and will be financed out of Gildan's bank credit facility. New GTA West Sales Rep Doris is the third largest marketer of branded ladies legAsh City/alphabroder also announced that Tom Alavi wear in North America and the market leader in Canada, has accepted the position of Dedicated Sales Representative, with products sold throughout all retail channels of discovering the Greater Toronto Area (GTA) west territory. tribution. Its company-owned brands include Secret®, “We are thrilled to appoint Tom as the new face of Ash one of the most recognized sheer pantyhose brands and a City/alphabroder Canada in the GTA west territory,” said growing brand for shapewear in Canada, the Silks® brand, Craig Ryan, Vice President of Canadian Sales, Ash City/ and TherapyPlus®, which provides therapeutic legwear alphabroder Canada. “I am confident he will provide solutions for medical conditions and everyday activities. unparalleled service to his customer base as alphabroder Canada becomes the end-to-end apparel solution for the Doris also markets its brands including Kushyfoot® and promotional apparel industry.” TherapyPlus® in the U.S. Revenues in the U.S. account for close to 30 per cent of Doris' total sales. In addition, Doris has brand licenses and supplies selective retailer private label programs. Revenues of Doris for the year ended March 31, 2014 amounted to approximately $95 million, and adjusted EBITDA for the same period amounted to approximately tors will be replaced by two new directors, chosen jointly $14 million, so that the acquisition is expected to be by Standard General and the current board, and three new immediately accretive to Gildan's earnings in fiscal 2015. directors designated by Standard General. All but one of the The acquisition of Doris immediately provides Gildan new directors are expected to be independent directors and with a strong sales organization and platform for retail disunaffiliated with either Standard General or Charney. The tribution of the Gildan® and Gold Toe® brands in Canada. board will continue to be led by its current co-chairmen, The acquisition also further enhances the Company's David Danziger and Allan Mayer. consumer brand portfolio within its existing U.S. retail Charney will not serve as a board member or be nominated distribution and positions it to increase its penetration by the company or Standard General as a board member. in the basic women's apparel markets. It will position the "This truly marks the beginning of an important new Company for entry into the ladies intimates' category and, chapter in the American Apparel story," said Mayer. "With in addition, further broadens the Company's retail distrithe support of Standard General, we are confident the bution network in the United States due to Doris' strong company will finally be able to realize its true potential." presence in the food and drug channel. "The last few weeks have been difficult ones for the comDoris' head office is located in Montreal, Quebec. Doris pany, and we are especially indebted to our special commitoperates a distribution facility and a sheer hosiery manutee members Robert Greene, Marv Igelman and William facturing facility with knitting, dyeing and packaging Mauer, who have worked so tirelessly on the company's capabilities in Montreal. behalf," said Danziger. "Any success the company enjoys Approximately half of Doris' production is verticallyin the future will in large part be the result of their efforts." 07-16-14 3:10 PM integrated. Doris' management team, including the founder's son, President and Chief Executive Officer Jack Hasen, will join Gildan and contribute to the further development of Gildan's Canadian retail branding strategy.

Appoints Tom Alavi as Dedicated Sales Representative for the GTA west territory Ash City, now part of the alphabroder family, is pleased to announce the availability of American Apparel®, Bella+Canvas and Fruit of the Loom in Canada. This ® ® makes Ash City/alphabroder Canada the only national distributor to carry American Apparel® in the Canadian corporate and imprintables market. alphabroder’s recent USA partnership with retail powerhouse, American Apparel®, has now extended across North America, with over 40 styles now available at Ash City/ alphabroder Canada from the brand widely recognized for its domestically-made, fashion-forward styles, and commitment to corporate responsibility. “We are extremely excited to be launching yet another outstanding collection in the Canadian marketplace,” said Doug Hayes, President of alphabroder Canada. “After a successful launch this past April with Alternative®, Gildan® and Jerzees®, we continue to add stellar brands to our portfolio

American Apparel to receive $25 Million in support Charney given role as Strategic Consultant

American Apparel has reached a Nomination, Standstill and Support Agreement with Standard General L.P. and company founder Dov Charney, the beneficial owners of nearly 44 per cent of the company's outstanding stock. Under the agreement, Standard General will provide up to $25 million in immediate financial support to American Apparel, the company's board will be reconstituted, and an independent board committee will be formed to oversee the continuing investigation into alleged misconduct by Charney. Standard General affirmed its support for American Apparel's sweatshop-free, made-in-USA manufacturing philosophy and commitment to maintain the company's manufacturing headquarters in Los Angeles. Standard General and Charney also agreed to certain standstill and voting limitations through the company's 2015 annual meeting.

Other key points of the agreement include:

• A reconstitution of American Apparel's board of directors, in which five of the seven current members, including Emblemtek_Imprint_2014-07_Reflective_out.pdf 1 Charney, will voluntarily step down. The departing direc-

Technosport Canada moves to a new, larger facility In accordance with Technosport Canada's philosophy to continue to best serve its customers with product, inventory and service, the company is proud to announce that it has moved its Toronto office and distribution centre. Technosport's new larger and better location offers expanded space and resources, increased convenience and wider service possibilities to its valued customers. Effective Monday July 21, Technosport Canada's new address is:

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Midland Clothing has moved E.Star International / Midland Clothing has moved to a new facility. The company's new offices are located at: 259 Steelcase Road, Unit #2, Markham, ON, L3R 2P6. The company can be reached at (905) 754-0088 or by visiting www.estarinc.com. 4

IMPRINT CANADA | July/August 2014

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ing risk as a competitive edge. Anyone wanting to become a potential competitor had to be willing to match our market1. Playing it too safe. Yes, risk is scary. But the truth is, unless ing investment and commitment—just doing the bare minyou continually embrace risk, your business will never emerge imum wouldn’t have been enough. As a result, competitors from mediocrity. Risk is the only thing that can give you the were forced to divert resources edge you need to distinguish yourself from other areas of their business from the competition and reach your to keep up with RME’s aggressive full potential, and that’s worth making marketing strategy. And since most a few mistakes along the way. of our competitors weren’t willing Experience has taught me that to embrace the risk of marketing some of the biggest mistakes you can at our level, they were never able make are the result of overly cautious to seize our market share. decision making. You might think I do want to acknowledge that that you’re covering your bases, or accepting marketing risk also means taking the prudent path forward, but recognizing that some degree of <WUM WN \PM KW[\TQM[\ UQ[\ISM[ MV\ZMXZMVM]Z[ KIV UISM IZM

in reality you’re sabotaging yourself. WN\MV LQ[O]Q[ML I[ [UIZ\ J][QVM[[ LMKQ[QWV[ failure is both inherent and necesSometimes that sabotage might cost sary to find your right path. you "only" a customer or a sale, but over time a few customers 4. Keeping it all business, all the time. Many protective busihere and a few dollars there can lead to you having to close ness owners live by the mantra - It’s not personal; it’s business your doors permanently. - because they assume that customers have unreasonable 2. Holding resources in reserve. Putting it all on the line is a expectations, or that their demands will increase once you frightening prospect. That’s why most entrepreneurs under- open the door of a relationship. standably want to keep some cash in reserve for a rainy day. After all, what if you start talking to them and they start Giving up your hard-earned money is the ultimate risk. To wanting better pricing, extended credit, or other special pour your life savings into an entrepreneurial pursuit is like considerations? That might happen with a few individuals, walking the tightrope without the benefit of a safety net. But but for the most part "getting personal" is actually one of the even though the commitment is substantial, you need to find most effective ways to earn your customers’ long-term loyalty. the courage to take that first step into the void. To a business owner with a small number of customers, Likewise, don’t skimp on the time and energy you pour losing just one client has a significant impact. into your business. They are even more precious than money If you lose a customer due to price or other circumstances and even more costly to waste. Never forget that a successful beyond your control, then fine. However, losing a customer entrepreneur’s commitment is personal; it includes an invest- because he/she felt unappreciated or underserved is inexcusable; ment of money, time, and loss of opportunity from forgoing it indicates serious flaws in your internal business processes. other opportunities. The easiest way to avoid customer churn is by continuously The life of an entrepreneur is not glamorous; it can be stress- reaching out and communicating; in other words, making ful, and you probably won’t be as successful as you’d like if you customers feel like more than a number. try to hold back, hedge your bets, and settle for "good enough." 5. Refusing to hire people who are smarter than you. You might 3. Not allocating a marketing budget. A business void of a think: why would I ever hire someone who is smarter than me? long-term and consistent marketing effort is doomed, espeThe best advice I received when I became the CEO of RME cially in a global economy that is becoming flatter and more was to hire people who were better and smarter than I was. competitive by the day. Skimping on marketing is not the At first I thought it was a condescending suggestion, but the way to save money because you’ll quickly find yourself out- more I thought about it, the more sense it made. Just like in publicized and out-advertised by the competition. sports, your ability to win depends on surrounding yourself At Response Mail Express (RME), we actually used market- with a solid, capable team who can perform without your

Here are 13 mistakes entrepreneurs should avoid:

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6. Being cheap about the wrong things. As a small business owner, of course you’re going to try to cut costs and stretch the budget wherever possible. And for each dollar you save, you pat yourself on the back. If you get too carried away with saving money, you might end up losing opportunities and customers. To put it another way: you can’t save your way to greatness. When you’re mulling over how much money to spend, think about how your decision might affect the customer. For instance, it’s fine to fly economy and stay in a budget hotel on a business trip, but don’t take the client you’re meeting out to a cheap chain restaurant. Likewise, you can furnish your back office with the bare minimum, but make sure your showroom is attractive and comfortable. In particular, don’t be cheap with your people. What I mean is, be willing to pay for top talent, and don’t skimp on training. Never forget that your employees—especially those on the front lines with customers—can make or break your business, so investing in their development is always the right decision. 7. Treating technology as a magic bullet. In so many ways, technology has made it easier to connect with customers. Used wisely, it can draw in potential buyers, cement the loyalty of existing customers, facilitate referrals, answer questions, and solve problems. So it’s understandable that many business owners automatically assume that more technology is always better. But if you’re not careful, technology can also be used as a barrier that keeps customers at arm’s length. Or, on the opposite end of the spectrum, it can allow you to get too cozy with customers: an inbox or news feed dominated by unwanted promotions, anyone? Again, the measuring stick here is simple: If it improves the customer’s experience, use it. If it doesn’t, save your time and money. 8. Believing that if nothing is broken, it doesn’t need fixing. When you’re facing a crisis that could damage or even sink your business, it’s easier to take risks. After all, if you don’t act, you’re doomed and there’s probably not much to gain by holding back. But what about the times when things are going smoothly? When nothing is actively going wrong, it’s easy to tell yourself that things are fine, that the future is rosy, and that you don’t need to put yourself out there to improve. However, that kind of thinking is a good way to be left behind or to become irrelevant. Customers don’t always leave because they had a bad experience with your company; the reason is often that they simply had a better one with someone else. Remember, risks need to be taken when business is both good and bad if you want to stay cutting-edge and competitive.

9. Waiting for "the right time." All over the world, there are entrepreneurs, and wannabe entrepreneurs, waiting for "the right time" to make their big move. They are waiting for funding, free time, better economic conditions, et cetera. These people believe they’re being smart by waiting for the stars to perfectly align—but all too often, they’re only stagnating. I’ve seen too many businesses remain less successful than their owners would like because those very same owners were hoping that tomorrow's conditions would be just a little bit better for advancing their goals. Keep in mind that being a ‘prisoner of hope’ doesn’t just apply to your company’s growth. Besides forgoing an opportunity for success by waiting for ideal conditions, many leaders fail to solve problems or correct mistakes because, in their minds, the timing wasn’t right. And when you’re bootstrapping a business, a mistake can be even more costly than not leveraging a chance for advancement. 10. Refusing to try again. It’s a fair bet that at some point in time, you’ve employed a business tactic that just didn’t work. Maybe you allocated a large part of your budget to producing a marketing campaign, for instance, but barely noticed any increase in your business. ,WV\QV]ML WV 9IOM !

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Cash Management Tips for Small Businesses By Adriano Aldini, imprint Canada

Effective cash management is critical to the success of your small business. Having a healthy cash flow in your balance sheet demonstrates effective management and will establish a better valuation of your business if you were to ever sell.

Here are some key tenants for better cash management: • Working capital: Often cash flow management is restricted to just working capital management. This may mean that you’ll need to tighten customers’ credit lines or cut-off customers with excessive past due balances. Both of these scenarios, if not addressed, may lead to delayed payments to your suppliers. Collection practices like this can disrupt revenue and may even cause customers to take their business elsewhere. It’s often a fine balancing act between the risk of losing sales and the risk of bad debt. It's important to analyze each clients’ payment history and current business before making any decisions. Here are some things to consider before making a decision to ensure you are not indiscriminately cutting off your clients' credit: a. Do they have a solid payment history? b. Are there trends where payments slow down then balances are paid in full? c. Have they always been slow to pay? d. Do they make efforts to contact you to deal with an open balance? e. Are they manageably past due, yet eating up too many internal resources like customer service support?

• Cash flow forecasting: If you have not been actively forecasting cash flow, you should be! Cash flow forecasts should be performed on a monthly basis in order to identify improvement opportunities. Accurate cash flow forecasting is a powerful tool which can help you make the right financial decisions and any errors may result in either additional credit requirements (at high interest rates for working capital) or a cash squeeze, which may prevent you from fulfilling orders. You should try to create awareness across your entire organization about the importance of cash flow forecasts. Do your employees understand the concept of cash flow? Do they know what their individual role is in the overall picture of your company? • Evaluating capital expenditure: It is important to preserve the cash that your business generates; one way to do this is by slashing your capital expenditure. While in the growth phase, slashing capital expenditure may not be feasible. However, you should perform your due diligence on expenses and ensure they are backed by a return on investment (ROI). Consult with your accountant or financial advisor before spending on capital expenditures, like new equipment or upgrades for current systems.

• Optimize your taxes: Taxes shouldn’t become a major cash outflow item. If they are, consult with your accountant and evaluate your business structure, operational processes and accounting methods to identify ways you can optimize your tax outflows. Entrepreneurs love to "DIY", but self-help accountancy won't advise you on the best ways to make sure your quarterly or monthly tax burden is being allocated to minimize your loss. • Build cash consciousness: This is especially important if you have separate teams handling sales and finances. Typically the sales team would consider cash management to be the responsibility of the finance team and would offer liberal credit terms for customers in the hope of increasing sales numbers. To circumvent this, try to incentivize cash conscious behaviour. Instead of sales incentives based on sales figures, you can offer them based on collections. This will ensure that your sales team focuses on not just achieving the numbers, but in the quality of sales. Ultimately, where cash flow becomes an issue is when small business ignore managing it. You can’t arbitrarily spend money on things that may be working or go months without analyzing your expenditures. Being your own boss is great, but there is much to learn from “big businessâ€? management of cash flow which is summized in five tips listed above.

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Celebrating 150 Years in business across Canada

Or maybe you offered an online deal to new customers, only to realize that the discount you advertised was a little too generous and wouldn’t allow you to make any profits. So now, if you’re like many business owners, you’ve vowed never to try again. Business is far from certain, and sometimes even the best ideas don’t have the desired results— but that doesn’t mean they don’t have merit. My point is, don’t let your own stubbornness place limits on your potential. If you know a tactic or idea is fundamentally a good one, learn what you can from your first failure, figure out how to make improvements, and try, try again.

11. Developing the "perfect" plan. Let’s say that you want to move to the next level, whatever that happens to be for your business. So you begin planning for every possible scenario; you define contingencies with backup plans full of redundancies. You sometimes wonder how anyone could fail with a plan that covers all possibilities and that offers each a solution. But here’s what you’re not taking into account: While your perfect plan might prevent you from failing, it will also hold you back from succeeding if it’s never executed. While planning is a good thing, for many entrepreneurs, the solution to avoiding the risk of reality is to keep planning. The truth is, with planning as a comfort zone, you can easily replace the reality of execution with theoretical forecasting and ‘what-if ’ modeling. For that reason, many risk-averse entrepreneurs miss opportunities and fail to build actual businesses in the act of building virtual businesses. Don’t make that mistake. 12. Confusing "invention" with "innovation."

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Many business owners lie awake at night worrying that their businesses will become obsolete if they don’t innovate. And so they drive themselves crazy trying to build a new mousetrap. What they don’t realize is that all they need to do is take the existing mousetrap and make it better. While invention and innovation may sound similar, they are two distinct concepts.

Invention involves creating something totally new from scratch. Meanwhile, innovation takes preexisting products, processes, services, technologies, and ideas and makes them better. Think of companies like Netflix, which took our culture’s thoroughly established love of renting movies and brought the process online, or Amazon - which ‘techified’ the millennia-old tradition of reading books with the introduction of its e-reader. There’s certainly nothing wrong with invention, especially if a brilliant, industry-changing idea hits you out of nowhere, but bear in mind that innovation often takes much less time, energy, and resources.

13. Requiring hard evidence. Sometimes, identifying the right decision is clear as day; other times, the right decision is murkier than the liquid in a Magic 8 Ball. How should you proceed? Many entrepreneurs simply avoid making a decision at all if the information they have isn’t pointing clearly in one direction. In my personal opinion, this is a mistake; you need to keep your business moving forward regardless of whether you have the hard evidence you may think you need. Sometimes, you’ll have to bring intuition into the equation, make a gut call, and then embrace the risks that come with that move. If your gut call turns out to be the wrong one, it doesn’t mean you’re defeated—it’s simply a part of leadership. Ultimately, a willingness to seek out opportunity and accept responsibility for all outcomes—including mistakes—is the mark of a true leader. If you can learn to live with risk and even use it to your advantage, you’ll be setting yourself up for entrepreneurial success. Tom Panaggio is the co-founder of Direct Mail Express and Response Mail Express. He is also the author of The Risk Advantage: Embracing the Entrepreneur's Unexpected Edge. (River Grove Books). For details, please visit www.TheRiskAdvantage.com

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"We believe the Imprint industry will do well in that time period. The beauty of the last few years is that tightened budgets forced corporate promotional buyers to look for the best value for their money. The good news is that decorated apparel simply has no equivalent in terms of cost efficiency in promoting a brand or a message. We believe the pressures that have prompted consolidation within the industry will continue. There are increasing demands on brands to remain current and relevant with changing demographics and new consumers (millenials) coming into the business. These new customers arrive in the industry with new and challenging ideas of what they want and how they want to buy our products." - Garry Bell, Gildan Activewear

"A big challenge is the lack of ability to get well trained employees. Our customers are having a challenging time hiring people at affordable rates to run and manage their business. Companies are competing for labour with high priced industries with high margins, and it's becoming difficult to find and retain those well trained employees. This challenge exists in both in western and eastern Canada" - Kevin Price, RB Digital

"We believe the next 12 to 24 months will be very challenging for 'traditional' distributors that don’t create value for their clients and employees alike. Clients are looking for a more complete distributor with multiple service and capability offerings." - Remo Niceforo, Add Impact "We will continue to see a renewed interest in domestically produced products. Similar to what's happening in the retail landscape, middle market space is shrinking, so businesses will have to focus on either high-end products that are of superior quality, or lower-end goods in order to produce larger quantities at lower price points. I also think we will see more consolidations where businesses band together to create greater value propositions for customers." - Kathy Cheng, Redwood Classics Apparel "I believe the promotional market will continue to grow in the low single digits. In combination with this, the expectations of key accounts will continue to increase, forcing larger suppliers to develop larger collections and additional services. These additions will include more in-depth compliance and social responsibilities, along with other service extensions. This will increase the service, or capability gap between smaller suppliers and those suppliers that can leverage their size. This will force margin pressure through our entire industry and a likely response will be further consolidation towards 'Full Service' models." - Will Andrew, Trimark Sportswear "Over the course of the next year, the GTA market will expand. One of the main reasons is because of the Pan Am Games taking place in Toronto in 2015. The amount of government funding will create growth in the marketplace which will in turn spark growth in our industry."  - Michael Filice, FM Embroidery

"One of the biggest challenges we face this year, versus last, is the decline in the Canadian dollar. We have hedging in place, however our costs have been negatively impacted and the economy is reacting slowly as it shifts to markets that are positively affected by this change. This foreign exchange rate has added further pressure on gross margins across our industry." - Will Andrew, Trimark Sportswear " The challenge is distributors self-destructive approach. The ability to work with customers in a consultative selling process seems to be a lost craft. The deterioration of  margin will have a negative impact on the industry as a whole. Offering a value proposition in delivering the highest level of service is in all distributors' best interest." - Remo Niceforo, Add Impact "A major challenge is offsetting the race-to-the-bottom prices by adding value and trust with our clients and prospects." - Warren Kindellan, Sudden Impact

"Consumers of apparel will continue to demand more transparency from brands to ensure their apparel is made in ethical and safe environments. The Bangladesh tragedies that have affected the apparel industry in the last year have reinforced a movement that was already underway. As a vertically integrated manufacturer, our business model is built on the premise that we own the vast majority of our facilities and we take pride in our employees’ working conditions, health and safety." - Garry Bell, Gildan Activewear

FWPc fX[[ QT cWT cWT QXVVTbc X]Sdbcah RWP[[T]VT X] cWT ]Tgc $ c^ hTPab. "Inventory management and fulfillment. As attractive as it is to buy high volumes in order to secure the lowest prices, heavy inventory is a risk. As well, pressure to offer the lowest price in the marketplace continues to increase, which creates a business environment where companies risk lowering prices without seeing an increase in sales. Finally, as service and product demands from customers continue to rise, suppliers face a higher costs of goods sold, inventory holding costs and cost to serve." - Kathy Cheng, Redwood Classics Apparel

"While there are concerns about Asian suppliers surfacing, it is my belief that this fear is not yet fully realized. Today our business provides a high level of service for small quantities of decorated apparel and this will be a challenge for an overseas vendor. Having said that, I think the possibility of a new entrant from an adjacent market is a possibility. Today, Amazon does not personalize or customize products, however it is not far fetched. As a result, I believe we need to focus on increasing and leveraging connectivity with our customers with web-enabled applications. As an industry we need to be ready to be very transparent with our information so that we streamline the sales cycle. In doing this we will likely centralize operations and enable accelerated time lines with innovative finished products." - Will Andrew, Trimark Sportswear

"Customers are likely to look for faster delivery, more personalization and will want better quality products while driving us for lower prices. We believe that successful brands will thrive under these pressures by investing in new

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technology and innovation and collaborating with their partners to create the most optimal supply chains for the marketplace. We do not think the traditional challenges we have faced will disappear. Volatility in raw materials and inputs (energy, cotton, polyester, transportation) will continue to create challenges. The correlation of economic factors in promotional spending will likely remain in place as well." - Garry Bell, Gildan Activewear

"While we believe current industry challenges will persist in this time frame, a long term obstacle our industry faces is the inability to attract the highest level of talent to an industry that cannot support salary expectations." - Remo Niceforo, Add Impact "A long term challenges is the shift of decoration from service providers to large manufacturers. In the past, there was always a layer of service providers across Canada that would buy product from manufacturers and provide it to their customers. Today, some of those manufacturers are either decorating the product themselves or having it done offshore. This shift has already started, and the question is over the next five years, will it continue or will it shift back to the service provider? Some people think this trend will continue, but China continues to change in the types of orders they like to do and we don't think this is a finished story. We think that there will eventually be a shift back to the local service provider." - Kevin Price, RB Digital

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Direct-to-Garment printing with the Epson SureColorŽ F2000 features precision, reliability, and high-quality garment printing. Deliver on-demand and never turn a job away again. Quick turn-around, short-orders, and multicoloured jobs are no longer a problem—they’re a way to profit.

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VAPOR APPAREL

Sublimation Friendly, Screen Printing, Embroidery, Heat Transfer and much more. High-quality performance apparel. Manufactured with PURE-tech™ permanent moisture wicking technology. Does not fade or wash away with time. Partnered with Unifi, Inc. to develop the Eco line. Men, Women and Youth lines. Other features include: UV Protection, Microbacterial Resistant, Stain Resistant, Reduced Static and Fast Drying.

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WE LOVE FLOWY 8815 Women’s Flowy Simple V-Neck Tee, Blue Marble

WHOLESA LE.BELLA.COM

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Tees for the Entire Family From Babies to Boomers smooth print surface | quality construction | colour consistency

Go online to explore the 23 new features of alstyle.com! 866.275.7860 Toronto | 800.353.3470 Edmonton | 800.663.1807 Vancouver

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WHOLESALE & RETAIL SALES; SURVEY OF LARGE CANADIAN RETAILERS SOURCE: STATISTICS CANADA

Wholesale sales up second consecutive month Wholesale sales rose 2.2 per cent to $52.6 billion in May, a second consecutive increase. While higher sales Figure1 were recorded in four subCanadian Wholesale Sales Increase sectors, which together repreBillions ($) 54 sent 72 per cent of wholesale 52 sales, the motor vehicle and 50 parts subsector accounted for 48 most of the gain. Excluding 46 this subsector, wholesale 44 sales rose 0.7 per cent (see 42 Figure 1). 40 The motor vehicle and 38 M J J J J J M parts subsector, which 2009 2010 2011 2013 2014 2012 rose 9.8 per cent to $9.3 bilSource: Statistics Canada lion, accounted for most of the gain in wholesale sales in May. The machinery, equipment and supplies subsector rose 1.2 per cent to $11.0 billion in May, while sales in the personal and household goods subsector rose 1.0 per cent to Figure 2 Provincial Wholesale Sales $7.4 billion in May. The home (% change) entertainment equipment and CANADA household appliance industry NL PEI (+4.7 per cent) led the gain, NS following two consecutive NB declines. QC Sales increased in six provON MB inces in May, which together SK represented 83 per cent of AB wholesale sales in Canada, BC with Ontario accounting for -2 0 2 4 6 8 10 12 most of the gain (see Figure 2). Sales in Ontario increased for a second consecutive month, rising 3.2 per cent to $25.6 billion, the highest recorded level for the province. Quebec had the second Figure 3 Wholesale merchants’ sales & inventory (Textile Clothing & Footwear) largest increase in dollar terms, rising 1.5 per cent 2500 to $9.5 billion, the prov+16.6% ince’s fourth increase in 2100 $2,078 five months. Higher sales million 1700 were recorded in most $1,782 $ millons million subsectors. 1300 Sales in BC increased +9.0% for a third consecutive 900 $963 $884 month, rising 1.9 per cent to million million 500 $5.2 billion on the strength May 2013 May 2014 May 2013 May 2014 WHOLESALE MERCHANTS’ INVENTORY WHOLESALE MERCHANTS’ SALES of higher sales in most subsectors. Source: Statistics Canada

Source: Statistics Canada

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In Saskatchewan, sales rose 4.3 per cent to $2.1 billion in May, more than offsetting April’s decline. The machinery, equipment and supplies subsector and the miscellaneous subsector contributed the most to the increase. Wholesale sales and inventories of Textiles, Clothing & Footwear are up Wholesale merchants’ sales of textile, clothing and footwear rose 9.0 per cent from the same period last year to just over $963 million, while inventories spiked 16.6 per cent from last year to $2.078 billion (see Figure 3). Retail sales increase for third consecutive month Retailers reported sales rose 0.7 per cent to $42.0 billion in May. Gains were reported in 7 of 11 subFigure 4 Retail sales sectors, representing 56 (Clothing & Clothing Accessory stores) per cent of overall total retail trade. Sales at 4 motor vehicle and parts dealers rose 2.5 per cent 3 in May, accounting for $2,047 the largest gain among +1.5% $ all subsectors. +0.8% 2 $2.26 $2.30 billons Sales were up in billion billion $1.78 $1.79 nine provinces in May. billion billion 1 Higher sales in Ontario, Quebec and, to a lesser extent, New Brunswick, 0 May 2013 May2014 May 2013 May 2014 accounted for most of RETAIL CLOTHING & RETAIL CLOTHING STORES CLOTHING ACCESSORY STORES the increase. Source: Statistics Canada Retail sales at clothing and clothing accessory stores were up 1.5 per cent from the same period last year, despite dipping slightly (-0.3 per cent) from April 2014 (see Figure 4). Sales of Clothing & Accessories at large retailers edge upwards In Statistics Canada’s most recent survey of Large Canada Retailers, data reported shows that sales of men’s clothing and accessories totalled $352 million in May 2014, up from $307.1 million and $334.6 million in April 2014 and May 2013, respectively (see Figure 5). Sales of women’s clothing and accessories rose in May 2014 to $767.2 million from $659 million in April 2014. Compared to the same period last year, women’s clothing and accessories at large Canadian retailers were down 0.3 per cent.

Figure 5

800 700

Monthly Sales of Clothing & Accessories (survey of large Canadian retailers )

$769.6 million

$767.2 million $659.0 million

600 500 400 300

$334.6 million

$307.1 million

$352.0 million

200 100

($) millions

May 2013

April 2014

May 2014

Women’s Clothing and Accessories Men’s Clothing and Accessories Source: Stats Canada

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