Business Operations

Strategy for Aritzia

CURRENTLY:

Aritzia is increasingly trying to address sustainability throughout its business operations and logistics by:

• Retrofitting all 90 stores with LED lightbulbs, to mitigate energy consumption

• Commitment to reducing the amount of individ-ual clear poly bags, commonly used to transport goods from the factory to the distribution centre

• Signing of the Arctic Shipping Corporate Pledge launched by Ocean Concervancy as a commitment not to send ships through the globally significant habitats of the Arctic25

OPPORTUNITIES:

Aritzia’s Operatonal sustainability goeals are to reduce emissions, waste and packaging impacts on the environment. On both a macro and micro level, there are ways to further optimize and address the larger deficiencies in Aritzia’s day-to-day business operations:

• Waste recycling and adequate garbage disposal in-stores

• Optimizing the amount of units being sent per box from the warehouse to the stores

• Engaging with the idea of ‘localism’ to curb larger carbon footprint due to wide spread global supply chains20

BUSINESS OPERATIONS

Strategy for Aritzia

IN-STORE WASTE RECYCLING

• Aritzia is facing an issue with its in-store waste disposal. Carboard is disposed of in the carboard processor, however, all plastics, paper and organic waste goes into the same garbage. There is no recycling sorting or composting in Aritzia’s stores, and this is due to the way the malls, where Aritzia rents its realestate, have been set up. • With 30 large renovated stores in the GTA that are driving mall foot-traffic, Aritzia has substantial leverage. Signing costly lease contracts with Cadillac-Fairview and Oxford Properties, allows Aritzia to introduce the idea of recycling and proper garbage management systems as a clause. Aritzia employees have certanly been asking for this for a long time and would help champion this change.

OPTIMIZING PRODUCT TRANSPORTATION AND MICRO LOGISTICS

• Although optimizing the number of units packaged in a box has been successfuly done by many large companies, Aritzia still faces opportunities in this area. The box sizes are standardized, while the number of units each box can fit is not, resulting in space wastage and ultimately energy wastage during transport. • This is a low hanging fruit, when it come to optimizing Aritzia’s logistics and busienss operations. A test could be conducted across all product categories to determine how many of each item type and in which combination should be packaged to reduce energy wastage. • Lastly, this system would have to be implemented in Aritzia’s 3PL facilities, as they are directly responsi ble for packaging cartons of merchandise that are bound for the stores.

LOCALISM TO REDUCE SUPPLY CHAIN ENERGY WASTAGE AND CARBON FOOTPRINT

• Aritzia’s current supply chain spans across four continents and countries ranging from India, China, Vietnam to Peru and Italy, Portugal to New Zealand26. Needless to emphasize, transporting products and raw materials across the globe, is hugely impactful when it comes to a company’s carbon footprint. • The notion of localism is a recurring theme in elevating Aritzia’s sustainability performance. By creating a network of local, North American supply chain partners Aritzia would drastically reduce its carbon

BUSINESS OPERATIONS

Industry Trends

IN-STORE WASTE RECYCLING Business case: REFORMATION • All of Reformation’s California stores are Califor nia Green Business Network certified27. Among other things this means they recycle materials by diverting waste from the landfill through reuse, recycling and composting, they avoid waste by eliminating unnecessary packaging, printing, and purchasing and they prevent pollution by eliminating and/or properly disposing of harmful chemicals28. Sustainability involves a wholistic approach, and having your retail spaces reflect the values of the company is mission critical. OPTIMIZING PRODUCT TRANSPORTATION AND MICRO LOGISTICS Business case: ZARA • When it comes to packing delivery cartons of new products for the Ontario stores, Zara Canada like Aritzia relies on a warehouse in Mississauga, ON. Zara has two types of cartons: one that is wider and flatter economically packed with items that are already hanging, and the other that stores generally folded items like knitwear, denim, etc. Zara has developped an optimal amount of units that fits in its boxes, lowering the carton quantity by packacking the box to the brim, with no wasted space within. Thus maximizing efficiency and minimizing waste29 . LOCALISM TO REDUCE SUPPLY CHAIN ENERGY WASTAGE AND CARBON FOOTPRINT Business case: GRAMMAR • GRAMMAR shirts are made from 100% organic cotton sourced from an ethical producer in India and they belive in supporting the excellent local artisans and women and minority-owned businesses in New York City. By producing locally, they are able to minimize the impact of their supply chain, lower carbon emissions and ensure that their extremely high quality standards are met on every garment30 .