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Roots: A Second Look at One of Canada’s Largest Clothing Brands University of Windsor Professor Ali Abdulhussien: STEN1000 - 1:00pm December 6th, 2020

2 Executive summary As a front runner in e-commerce, Roots successfully implemented mobile integration, grasped product presentation, and personalized virtual dressing rooms. Utilizing the lasting effects of the 2002 Winter Olympics, Roots did not have to put extra effort into marketing the diversity of the Canadian brand in America. Similarly, Roots’ adaptability and creativity shows in the Asian market with the creation of fabrics to accommodate the market climate. There has been an established understanding of the competition from Hudson’s Bay Company and Joe Fresh in Canada and generally the North American market, Gap, and its subsidiary, Old Navy, Nike, Under Armour, and Puma. Attempts to increase the social media presence, on Twitter and other platforms have to take priority within the business. Adaptability to the reality of the Covid- 19 effects, Roots employees agreed to wage cuts, and Roots has maintained a healthy number of stores. Roots ended the Fourth quarter with 114 corporate retail stores in Canada, 8 in the US, and 144 partner-operated stores in Taiwan, 36 in China, and 1 in Hong Kong. There has been an increased emphasis on the delivery platforms as a result of e-commerce. In 2019 Roots has been able to bring in a total profit of 29.1 million dollars, which is also available on the Toronto stock exchange. Today, Roots continues to invest in the corporate infrastructure and work on minimizing potential legal issues. Striving to appeal to a newer target demographic of the 25-30 age group has become important to show that Roots products are the new fresh and trendy everyday clothing items for consumers. Environmental consciousness is the center of the Roots Corporation and their heritage in diversity continues to set Roots apart from other brands today. Table of Contents

3 1.0: Introduction 2.0: The Strategic Discussion 3.0: Competitive Situation Analysis 3.1 - Roots’ Corporate Strategy 3.2 - Roots Business Strategy 3.3 - Competitors and Industries 3.4 - Environmental and Core Operational Capacities 4.0: The Big 3 Cs of Roots 4.1 – Company 4.2 – Customers 5.3 – Competitors 5.0 Value Chain Analysis 5.1 – Primary Activities 6.0 Looking Forward: 5 Year Environmental Projections 7.0 Strategic Adaptations 7.1 – Store Improvements 7.2 – Goals and Expectations of 2017 and 2018 7.3 – International Awareness 8.0 – Conclusion and Phase Two

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4 Intro - What does Roots Do? In the previous assignment, we discussed what Roots is - what it sells, how it sells its products, where it started, and how it got its start, etc. But now we are going to discuss what exactly does Roots do? Beyond, ‘sell clothes,’ at least. Roots can be seen as a frontier in e- commerce since it was one of the first Canadian companies to understand and thus establish an e- commerce platform. Roots successfully blends e-commerce with the “Canadian “ identification and merges it with the diverse “sweat style” and then combines all of this with environmental sensitivity. Given Roots’ success from these angles, it should be a successful company, right? Strategic Discussion Roots uses many different means, sources, and dynamics to approach value creation and sustainable competitive advantage in their market space. A few of the means they use are having a targeted customer base, which is Canadians, being known as a large partner of Target as they made their move into the Canadian market. Ahead of US retailer Target’s move into Canada, Roots was selected as one of its Canadian partners with the goal of providing limited collections in the newly opened 124 stores. The partnership between Target and Roots had been a year and a half in the making and gave both retailers an opportunity to tap into a new market. For Target, it would help with its introduction to Canadians and for Roots, it provided an initial foray into a mass merchandising space and the opportunity to align itself with a top American retailer. ( Roots Canada , 2011) A few sources that enable Roots Canada to gain a sustained competitive advantage are through their large sums of money donated to different organizations. One of these is Brands For Canada and United Hearts For Canada. This year due to covid, Roots Canada partnered with Brands For Canada's United Hearts For Canada campaign and program, donating

5 more than $1.0 million in products to support charitable organizations across Canada that directly impact the communities where Roots does business ( Roots Donates More Than $1.0 Million in Products , 2020). This helps Roots become better known as a company that cares about its customer base. This leads to many new customers and many loyal customers. Roots Canada uses the different dynamics they face to improve their sustained competitive advantage and value creation in many ways over the years that they have been in existence. One of the most recent ways was their generous donation of clothing which was stated in the following statement put out by Roots Canada, “We strongly believe in supporting one another, the communities where we live, work and do business. In these unprecedented times, we are giving back in the best way we know how – through comfort. As part of our continuing efforts to show our heartfelt appreciation for our frontline healthcare workers, we have donated $500,000 of existing Roots clothing to be used as scrubs at medical facilities. We have also partnered with our friends at Fairmont Royal York, creating Roots comfort kits, to help make the temporary stay of frontline workers who cannot go home between shifts a little more comfortable. Community and Comfort have always been at the heart of what we do. With these initiatives, we hope we are providing some extra comfort to these brave individuals that are caring for others in their time of need. We sincerely thank these heroes for all that they do. Please continue to do your part to help flatten the curve. We will get through this together.” ( Giving Comfort , 2020). This statement helped them with their sustained competitive advantage because it showed the new customers and the loyal customers that they do care what happens to them and they want to support them and their community as much as possible. This also helped the value creation because they were able to make a move that would stand out in the marketplace, thus bringing in more people to their storefront resulting in the possible purchase of an item from their business.

6 Competitive Situation Analysis Roots Corporate Strategy Seeking to leverage competitive advantage in the clothing and apparel industry, Roots became one of the first Canadian companies to establish an e-commerce platform in 1999. To ensure that this online store is able to promote digital customer connectivity and drive traffic and conversion, Roots consulted a leading firm to redesign their online store in 2017. These new features were added to Roots through “improved website functionality, enhanced mobile integration, product presentation, personalized virtual dressing rooms and expanded editorial content to increase customer engagement and site-visit frequency” (Roots Corporation: Annual Information Form , 2018). In addition to this platform allowing Roots to branch out across Canada, America, and for that matter the whole world, they can use e-commerce data to identify key markets that they should set up stores in, like Boston, Washington, and Chicago where they can establish corporate retail stores and be closer to their target markets (Roots Corporation: Annual Information Form , 2018). Root’s retail stores and e-commerce platform then blend together as one to form their seamless omni-channel approach - seamless meaning that the channel between physical and online stores is consistent. This omni-channel offers to their customers to enhance their shopping experience through allowing their customers to view product availability before going to the store, order online and collect in the store or order in the store and have it shipped to their house, shop online any time of the day, and make returns and receive refunds easily (Roots Corporation: Annual Information Form, 2018 ). The enhanced customer experience and versatility that their omni-channel strategy offers makes the process of buying easier than ever, especially in today’s society where time is valuable, intriguing customers to purchase through them instead of other retailers.

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7 Another business strategy Roots has recently implemented is the movement from their old DC to a new DC. Different from their old DC, the new DC is able to combine both Roots’ retail store and e-commerce operations, allowing Roots to further enhance their seamless omni- channel. The other upside is that this DC is much more spacious, as well as technologically enhanced, improving speed, productivity, and output within the workplace (Roots Moving to New Integrated Distribution Centre, 2020). Roots Business Strategy Roots caters to their Canadian customers by offering four different themes of merchandise for each of their stores - Comfort, Canadian, Open Air, and Experience. According to Roots, they “use these four themes to thoughtfully cater to local market demographics, depending on whether our stores are located in urban centers, student towns, or targeted tourism gateways. With this approach, they are able to curate our offering to the specifics of each local market and customer profile in order to maximize store sales and profitability” (Roots Corporation: Annual Information Form , 2018). To demonstrate the versatility of their products, they showcase annual video campaigns called “My Sweatstyle”, which feature emerging artists from different backgrounds spreading the idea that Roots products cater to all styles. Keep in mind these are only measures taken by Roots to cater to Canadians. As for the United States, Roots’ insufficient efforts towards marketing stems from their long lasting effects from their investments in the 2002 Winter Olympics in Salt Lake City, Utah, and close proximity to Canada. This has helped them develop a solid customer base in America (Roots Corporation: Annual Information Form , 2018). Unfortunately in April 2020 Roots decided to permanently shut down 7 of their 9 stores in America in order to reduce their expenses and capital expenditures to COVID-19. The pandemic was the final breaking point for Roots as those 7

8 stores created a $6 million adjusted EBITDA loss in their most recent financial year (“Roots closing seven U.S. stores”, 2020). With only 2 stores left, Roots will have to focus on its e- commerce sales in America, meaning Roots will have to undergo intensive marketing initiatives within the American market if they wish to stay relevant and competitive with other American brands. As opposed to American markets, Roots demonstrates higher performance in Asian markets. During the emigration of Tawainese people to Vancouver in 1990, they received their first exposure to Roots’ products. The combination of both style and quality that Roots’ clothing and apparel offered was much desired by the Tawainese, leading to Roots’ decision to venture into the Asian markets (Chiang, 2016). Recognizing Taiwan’s closer proximity to the equator than Canada, Roots adjusted their products through the usage of lighter fabric to promote airflow. Roots even partnered up with its Taiwanese partner “Branded Lifestyle” to celebrate 20 successful years in the Tawainese market. (Chiang, 2016). In doing this, Roots are establishing a deeper and more personal connection with their customers, increasing the likelihood of these customers staying loyal to the brand. These are the business strategies that Roots have implemented to cater to a variety of markets across the globe. Competitors and Industries It is difficult to give mention to all of Roots’ competition as they are involved in monopolistic markets. Through offering a diversified array of products and their global reach, Roots competes with global brands and smaller regional brands that sell goods including apparel, leather goods, accessories, and footwear (Roots Corporation: Annual Information Form , 2018). One of the most prominent companies in the Canadian market is The Bay, who first started their operations in 1670 in the fur-trading industry and are now involved in the merchandising and

9 retail sector, accumulating $1.9 billion in revenue in 2019, (Paddon, 2019). The advantage that The Bay has over Roots is that they sell a variety of brands while Roots can only sell their brand. This compared with The Bay’s long and successful history that displays to potential buyers their impeccable reputation, effective business model, and burning desire to stay relevant in today’s society, prompts consumers to choose them over Roots. Aritzia and Lululemon Athletica are other dominating clothing brands in the Canadian market that earn greater revenues than Roots, and it’s clear to see why. For example, Roots’ sells their sweaters at about $70 - $90 while Aritzia is selling their sweaters for between about $70 - $200 and Lululemon for $90 - $180. These higher prices are due to the extraordinary quality, style, and value of the brand name that comes with the product. Furthermore, Roots isn’t bringing in customers with their “lower” prices since consumers claim Roots’ products are priced too high for such low quality (The coming demise of Roots?, 2020). Keep in mind that these comments come from Canada - Roots’ most successful market where they have gained their status as an ‘iconic’ clothing brand. If Canadians, Roots’ primary source of income, are starting to stray away from Roots products, it can be inferred that Roots is overshadowed by the majority of their American-based competitors such as Gap and their formidable subsidiary - Old Navy, who is viewed as one of the most successful clothing brands in America. Old Navy is able to capture the interest of consumers through their extremely low retail prices, and on top of that, their willingness to discount their already cheap goods. For example, Old Navy sells T-shirts at $15 and at a discount of 50% (Taylor, 2019). Though prices may be low, it serves as an incentive to bring customers through the door and intrigues them to keep coming back to the store, resulting in Old Navy bringing in a revenue of over $8 billion in 2019. As previously mentioned, consumers are not able to justify prices like $30 - $70 for a

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10 single low-quality T-shirt, which is why Roots has less revenue and customer loyalty than Old Navy. To further solidify Old Navy’s dominance over Roots and the rest of the industry, they have built 1100 stores that extend across all 50 states and the globe and have over 4 million people visit their website every day, all working in unison to establish a competitive advantage over other competitors in the industry (Mens Womens & Kids Clothing & Jeans: Old Navy Store Locator). Speaking of brands that overshadow Roots in the clothing and apparel industry, Louis Vuitton, a company with a long history, outclasses Roots in all areas of the industry, especially in the bag sector of the market. From the purchase of one bag, Louis Vuitton offers the customer the bag itself, their brand name value, and a piece of their history. As for Roots, they offer Americans a product that is based on the beauty of Canada and a smaller quantity of history. A similarity between these companies is their reputation for being durable. However, this similarity doesn’t balance these two companies competitively since Louis Vuitton’s bag quality is second to none in terms of quality. Tying everything together, Louis Vuitton’s history and product quality offers customers extra value that helps their high bag prices ($2,000 - $5,000) be seen as justifiable, a conclusion that Roots customers struggle to reach. Old Navy and Louis Vuitton are examples of some of the many companies in America that overshadow Roots Corporation in the American market. Environment + Operational Core Competencies The environment is the establishment that Roots has based their business activities around. Since the beginning of their operations, Roots has been showing Canadians their proudness to be a Canadian brand through the selling of products that are inspired by the beauty of Canadian culture, nature, and diversity. Each product that Roots sells gives their customers a chance to feel all the aspects of their heritage that make them unique compared to other cultures

11 and nationalities. It is this message of being truly proud of who we are as Canadians that makes Roots one of the most iconic Canadian brands, provoking Canadians to pick Roots over their rivals. An important operational core competency of Roots that sets itself apart from other clothing brands is the actions they take to help the environment. Throughout their 47 years as a business, Roots has teamed up with various different environmental groups, such as Environmental Defense, the Evergreen Foundation, Friends of Earth, Canadian Wildlife Federation, etc, to help promote environmental sustainability (A History Of Roots, Canada's Iconic Store, 2016), giving this company a reputation for being eco-friendly. Roots then used their eco-friendliness to their advantage in China during their grand opening to separate them from all their environmentally unfriendly competitors. Steps taken by Roots to start marketing to the Chinese consisted of a $5,200 donation to a Chinese ecological group to help plant trees in northern China, them selling eco-friendly products made from bamboo material and other biodegradable material, and giving away reusable stainless steel chopsticks to prevent people disposing wooden chopsticks irresponsibly (York, 2007). The Three Big C’s of Roots The Company Roots as a company has already been discussed ad nauseam with regards to this project. If you’re reading this and you’ve read the previous assignment and the previous parts of this particular project, you know what Roots is and what it does as well as all the ins and outs that makes Roots as a corporation successful.

12 But the company is not the only factor of success in regards to business. A company can be run exquisitely, but as long as two other very important factors are not included in how the company plans out its strategy, that company is almost certainly doomed to fail. However, what has yet to be discussed about Roots is their financial situation – revenue and stock market value and all the things that make business, business . How is the company, financially? In the first quarter of the year of 2019 – which is January 1 st to March 31 st – Roots made $54.4 million in revenue (Investors, 2019), and a total profit of $28.1 million after all expenses. Compared to the previous year’s Q1 – where Roots made $51 million in revenue and $29.1 million in profit – you can deem a few important facts from this. Namely, while Roots had more sales in Q1 of 2019 than Q1 of 2018, they had more expenses too. There are a number of reasons why this is: Investors say that it was a result of more discounting in 2019 than 2018 as a result of a move to another distribution center (Investors, 2019). Roots is also a publicly-traded company on the Toronto Stock Exchange – the TSX. Now, an IPO is obviously not the end-all, be-all of a company, and some of the most valuable companies on the planet are not publicly traded: Chinese technology giant Huawei is not listed on any stock exchanges, not even in Asian-centered ones like Tokyo or Shanghai or Hong Kong. But even so, the company’s IPO is a good barometer of how well it is doing. Unfortunately for Roots, who went public, their official IPO was not what they desired. On October 25, 2017, Roots went public at roughly CAD$12 a share, but prices fell to under CAD$10 by the end of the day (Critchley, 2017). Of course, that is far, far above how their shares are faring now – trading on the TSX for roughly CAD$1.50. Obviously, the ongoing COVID-19 pandemic has affected

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13 TSX prices, and it is entirely possible that Roots issued more shares and accidentally caused share dilution as a result. Stock market value is not a perfect barometer, but it is a useful one. The Customers In the previous paragraph, it was mentioned that even if a company is run immaculately, if it does not take two important factors into account then that company is doomed to fail. The first of those two factors are the Customers . That is you and me and everyone who buys from Roots. The executives at Roots need to know who is buying their products and how to market towards those specific people. Ever since the company sold its first pair of boots, Roots has been trying to reach younger, less formal demographics. After all, selling a boot where the sole is declining towards the heel is far from traditional when it comes to shoemaking. Roots has long tried to target younger markets, mainly the 20-35 demographic. After all, having young adults wearing your clothing is good for a brand – it means that you’re hip and cool. One of their central marketing pitches involved partnering with Canada Post, to try and get more people from the 28-35 demographic to actually shop in their stores (Canada Post: Deepening Roots, 2018) through the Canada Post’s Postal Code Targeting System. By offering coupons and discounts and advertisements aimed directly at a portion of Canada’s population, at the most lucrative time (back-to-school, late August and early September), Roots was able to greatly increase their sales. By being able to market to the right people at the right time, the company found enormous success. Of course, Roots is in a crowded market, so it has occasionally undertaken rather left- field ventures in order to stand out. Most notably was the first product line from a drug company

14 to partner with a non-pharmaceutical company, Roots Multivitamins (Strategy Online, 2001). However, due to it being an extremely weird idea from 2001, not much information is available on the topic. But it does show Roots’ creativity as a brand to expand their reach to other demographics. After all, business is about getting the right product to the right person, but the right person needs to know about that right product, and that’s where marketing comes in. The Competition Roots happens to be in a very crowded market. The market for clothes - specifically casual, non-athletic wear clothing is a highly trafficked one, and even though Roots didn’t start out in that market, the forces of the market at large eventually forced it towards its current position. As mentioned prior in a previous section, Roots has many competitors in its market. With regards to Canadian brands, Roots faces stiff competition from the Hudson’s Bay Company and Joe Fresh, the latter which is owned by Loblaw Companies Limited. Of course, Roots’ competition in Canada is not limited to Canadian companies. As mentioned in the previous version of the assignment, its biggest and most direct competitor in North America is likely Gap, and its subsidiary, Old Navy. It also merits mention that Roots also has competition from clothing brands that may not completely fit the definition of leisurewear, namely brands that sell athletic wear such as Nike, Under Armour, and Puma. The long and short of it is that Roots operates in an extremely dense market, one that punishes any failures or slipups harshly. The fact that Roots has been able to operate and survive and grow and even thrive is a testament to the competence of its executives, strategists, and designers.

15 The Value Chain Analysis of Roots A Value Chain Analysis is rather self-explanatory. It is an analysis of the value chain of a company. The more important question is instead, “What is a Value Chain?” Simply put, the value chain is the various processes that a company engages in to offer their products to the public (Jurevicius, 2013). As a result, a Value Chain Analysis (VCA) is an analysis of those processes. The Value Chain is split into two distinct parts: Primary Activities and Secondary Activities, and a VCA takes both into account. There are five Primary Activities: Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Service – in that exact order. One cannot happen before another. Comparatively, there are four Secondary activities: Firm Infrastructure, Procurement, Human Resource Management, and Technology. There is no real order to these four, because they all exist at the same time in order to support the primary value chain. Without any of these nine elements, the company is unable to make a profit, so one could argue that the Value Chain is the most important aspect of any business. A proper VCA takes into account not only those nine elements, but also the value chain of the industry the company operates in. As a result, a proper VCA can be quite lengthy, and as a result, this one will be abbreviated. Primary Activities Roots is in a rather interesting position with regards to primary activities. Inbound Logistics, Operations, and Outbound Logistics all occur at the same place, which is their Integrated Distribution Center (Investors, 2019) – which was mentioned prior as a reason why

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16 their profits fell in Q1 2019 compared to Q1 2018. Instead of relying on third-parties to handle all the work, they mainly do it themselves, first by shipping their products to the distribution centre, and then proceeding to, well, distribute them. Like many other clothing manufacturers, Roots makes sales through three avenues: through online shopping – usually from their website, through department stores like The Bay (which is oddly enough owned by the Hudson’s Bay Company, one of Roots’ main Canadian rivals), and through company-operated outlet stores, like the one at the Windsor Outlet Mall. Root’s marketing has already been discussed previously in this article. And finally, what is the service that Roots offers? Well, it is that they sell their clothes to you. The same way that McDonalds sells you food – as in you pay for it and then you get it – and the same way that a tent rental company operates – you pay and they come and set up the tent you ordered – is the same way Roots works. After all, you have to pay first, and then they take the security tags off of the clothes you buy and then they give it to you. With regards to Roots, the sale happens before service. The service is effectively their employees packaging it up and giving it to you in a nifty little bag – alongside other smaller aspects, such as helping shoppers along in their stores. Looking Forward: 5- Year Business Environment Projections Roots have taken opinions, estimates, and assumptions that are reasonable and have turned them into statements about the future projections (Annual Information Form, 2019). It is also based on known and unknown risks, uncertainties, assumptions, and other factors that can be considered risk factors with future operations (Annual Information Form, 2019). Within the legal and regulatory area, Roots has not faced any major legal proceedings but they have had

17 minor litigations which they consider as a normal part of the business.(Annual Information Form, 2019). Currently, Roots operates in compliance with the laws of their respective countries and with all other applicable rules and regulations, including those dealing with labor, worker health and safety, and the environment (Roots Workplace Code of Conduct). At Roots the changes in laws, rules, regulations, and global standards are factors that will impact the business environment in the future (Annual Information Form, 2019). To overcome this Roots must maintain in compliance with any new law or regulation as well as ensuring that subcontractors are following regulations too. Roots currently have a code of conduct that must be signed, and they expect suppliers to post the code of conduct somewhere that employees can regularly view these principles (Roots Workplace Code of Conduct). With respect to the technological aspects, Roots projects that there may be risks associated with upgrading or replacing core technology systems, as well as security breaches that may affect the technology systems as well as the e-commerce business (Annual Information Form, 2019). This could affect Roots regarding their business environment so over the 5-year projection time the company will have to plan and implement cautionary measures as well as have an idea of what they will do if the security is breached. Another issue they may come across is the inability to successfully manage and grow their e-commerce business (Annual Information Form, 2019). In 2018, Roots e-commerce site was affected by the Canada Post strike, and to minimize the impact they developed agreements with other carriers (Annual Information Form, 2019). Moving forward, Roots should continue to look out for potential issues with carriers so that the e-commerce site does not get affected in the future. Within the social and global factors Roots needs to be aware of the changes and trends in their industry or the global economy (Annual Information Form, 2019). Regarding the global factors, Roots must be aware of their

18 dependency on their international operating partners and be aware of any foreseeable changes that may happen in the future with these partners (Annual Information Form, 2019). In the social aspect, Roots must look at the seasonality of sales and inventory purchases, the possible inability to anticipate and respond to changing consumer demands and fashion trends as well as the possible failure to adequately connect with their customer base (Annual Information Form, 2019). For their 5- year environment business projections the changes in social factors could risk the loss of customers so they must keep up with what the consumer wants. Businesses are heavily dependent on economic factors and Roots can be affected by them all the time. Roots takes into consideration their ability to continue investing in infrastructure to support the growth of the company as well as looking at the currency exchange and interest rates (Annual Information Form, 2019). As a part of the economic factor, Roots is aware that there may be additional taxes that could affect their operating results as well as payment and insurance-related risks that can be factored in at any time (Annual Information Form, 2019). Roots also deals with market shares and have noted that there could be volatility in the market price for shares as well as their shares possibly declining due to future sales of their securities by existing shareholders (Annual Information Form, 2019). Since Roots’ have locations in many regions, they must be aware of the risk created by fluctuations in the value of the Canadian dollar in relation to the U.S. dollar and other currencies as well as the changes in the general economic conditions in the regions they operate (Annual Information Form, 2019). In the competitive factor, Roots wants to maintain an advantage over other companies within the business environment. Some things that they must take into consideration for the future within their highly competitive industry, are the impacts the competition will have on their company as well as the size and resources of their competitors (Annual Information Form, 2019). There are

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19 risks that Roots may face moving forward within their competitive factor such as lower customer awareness of the brand in new target markets, being unfamiliar with these markets, and the inability to obtain merchandise on a timely basis at competitive costs from their suppliers (Annual Information Form, 2019). Overall, Roots has a good understanding of where they stand currently as well as the risks that can be associated with each factor of the business environment. With this level of understanding, Roots can create future plans, giving the company a solid foundation for their forward 5-year business projections. Strategic Adaptations Store Improvements To maintain an upstanding image, roots have been keeping up with restructure and renovations of stores and outlets to keep a high standard for their customers., Roots intends to modernize their store's appearance so it can appeal to current day customers. During Fiscal 2015, 2016, and 2017 Roots renovated, relocated 15 stores with a total investment of $9.9 million which resulted in the growth of sales at approximately 26%. which motivated Roots to continue the evaluation of expanding or maintaining the store portfolio for further opportunities. Roots expected their sales growth to be driven by opportunities such as brand power, upside in investments, and white space opportunities (Annual Information Form, 2018). As a part of the United Brand Range Roots Intend to Optimize their supply chain and manage inventory eliminating duplicated and low impact SKU while adding SKU to areas with high growth opportunities, which in turn help Roots realize high margins and growth in sales. Roots intend to grow retail presence by aiming at premium street and top tier malls by working with a third-party consultant to identify promising areas to open stores while closing ordinary courses of business

20 through real estate portfolio or finding lease opportunities. During the 2018 Fiscal Roots intended to open four to five new stores and three to four new stores by Fiscal 2019(Annual Information Form, 2018). Goals and expectations of 2017 & 2018 Strategic expansion in the US. In Fiscal 2017 Roots had been successful with their e- commerce platform having sales in each of their retail stores in every state in the US. Roots believe they are attractive for a long-term opportunity. The investment in the 2002 Winter Olympics in Utah and the proximity of Canada with the US created a solid base for consumer Awareness by Roots Canada (Roots Corporation: Annual Information Form , 2018). Roots plans to Expand in the US are very immediate targeting more northeastern and midwestern locations. Roots have signed leases with four US states including The Greater Boston Area and Washington DC and evaluating markets in places like Detroit, Philadelphia, and Chicago before entering a specific market with a specific target of 3250 to 3750 square foot stores and expecting a return in less than 3 years investing almost up to $171 per square foot. By the end of Fiscal 2019, Roots are expected to open 10 -14 new stores in the US (Roots Corporation: Annual Information Form , 2018). In Canada, Roots were able to renew leases of 8 new stores to optimize the overall foothold here and continue to deliver expected standards. Alongside the additional stores, they continue to keep the high performing pace. Roots have renovated four stores, relocating and expanding around 6 stores ending the year with a total of 114 stores all over Canada. (Gabel, 2018). Roots has analyzed the 2018 Fiscal for all quarters and intended to enter the 2019 Fiscal period with a sharper focus. Some of the statistics explained by Roots are that they expect from

21 the 2019 Fiscal period in terms of sales is an increase from ($millions) 325 in 2018 to a range of ($million)358-375 which is an increase of around 9-14% (Gabel, 2018). International Awareness In terms of international awareness Roots showed great new progress in the Asian market, specifically the new store in Hong Kong’s premier shopping centre in April 2019, and the launch in Zalora.com which is a leading fashion online shopping. (Gabel, 2018). After Evaluating Fiscal 2018 Roots have taken steps to reduce SKU Count by 40%. With the inclusion of a new material chief, Roots aims to accelerate product vision. In terms of awareness, Roots established relationships with international sensation Shawn Mendes and with Air Canada, a top airline company in Canada. Since Roots, a company in Canada, extends its services worldwide, they continue to hold their superstar status through their strategic marketing and improving fan base on social media. Roots has over 5000 Twitter followers as well as 3900 likes on Facebook and a youtube channel, influences video content as well as a blog. Conclusion Similar to almost every business, Roots was not immune to Covid and other economic factors and thus Roots’ adaptability was not sufficient to shelter it from fiscal problems. Though Roots is known for its environmental friendliness, perhaps this is “the” area that should be focused on and leveraged a little more. One could make the argument that Roots’ biggest flaw is being based in Canada. Being headquartered in a country of roughly thirty million and trying to break into a country of three hundred million is much more difficult than doing the opposite, and Roots has to compete with

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22 American companies operating on what is assumed to be Roots’ own turf, alongside regular Canadian competition. Roots is a company well prepared for the future, but in 2020, is it unclear what the future holds for anything. One would believe that the lessons learned from the past would seemingly innoculate Roots against future troubles, but this year isn’t quite over yet. Phase Two At the start of each phase of this project, all of us group members would get together and discuss each of the sections and decipher exactly what each of the sections were asking of us. This served our group well in the end because during the discussions we were able to help each other pave a clear path for how they should go about answering each section's questions. Throughout this project, and especially in phase two, a recurring theme was writer’s block and citation formatting issues. Due to our coordinated teamwork, however, we were able to overcome this obstacle through offering each other helpful websites, correcting citation errors and layout format, and making additions to their writing. To stem off of this, most of us were not sure how we could possibly go further into depth on the sections that we completed in phase one. To get past this issue, each and everyone of us decided to take on a new part for the second phase. In doing this, we were each able to contribute a new perspective on each section, helping us to voice a deeper explanation on the various different aspects of Roots’ business model and activities. Another problem that we came across through this process was a lack of communication from time to time, especially when it came to the first part of the project. The way we went about solving this communication problem was by setting specific dates where each of us were able to speak for 20-30 minutes to check in on everyone’s progress and answer

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23 any questions. One of our group members was not able to make it out to these meetings, so we always made an effort to keep them up to date with all happenings. To experience improvement in future performance, we as a group know that communication is an essential factor in determining the success of a group. Further collaboration through the use of structured meetings is important to ensure that everyone is on the same page and has full understanding of what is expected of them for their part. These meetings are structured in a way that eliminates non-useful factors like fooling around and chatting off topic, maximizing productivity and efficiency. Along with this, it is instrumental to be checking in with one another to make sure that tasks are being completed within a certain timeframe for the purpose of having leftover time to fix mistakes, like repetition and grammatical and citation errors. This extra time can also give us group members time for reflection on our work and course material, which can then lead to further elaboration on topics. Through the consideration of these improvements, each of us can achieve greater success in future projects.

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24 References A Detailed Look At Gap's Crown Jewel: Old Navy . (2019, November 06). Retrieved November 25, 2020, from https://www.forbes.com/sites/greatspeculations/2019/11/06/a-detailed-look-at- gaps-crwn-jew el-old-navy/?sh=48e03c704701 Annual Information Form . (2019, April 2). Retrieved November 20, 2020 from https://www.roots.com/on/demandware.static/-/Sites-RootsCA-Library/default/dw12f03508/ content/homepage/annual-report/2018/pdfs/AIF_Fiscal_2018_Final.pdf Bizclik, Editor. (2020, May 13). Roots Canada Sets an Impressive Social Media Marketing Standard . Retrieved December 01, 2020 from https://www.businesschief.com/digital-strategy/roots-canada-sets-impressive-social-media- marketing-standard Critchley, B. (2017, October 26). Roots IPO debacle: Who to blame after retail investors lose their shirts on first day of trading? Retrieved December 03, 2020, from https://financialpost.com/news/fp-street/so-how-well-did-the-advisors-on-roots-ipo-earn-their- 11-million-in-fees Davies, K. (2019). Press Release Details. Roots Reports Fiscal 2019 Fourth Quarter and Year- End Results . Retrieved November 15, 2020, from https://investors.roots.com/news-and-events/press-releases/press-release-details/2020/Roots- Reports-Fiscal-2019-Fourth-Quarter-and-Year-End-Results/default.aspx Gabel, J., CEO. (2018). A Word from Jim: FISCAL 2018 FINANCIAL PERFORMANCE [Letter to Fellow Shareholders] . Retrieved November 05, 2020, from https://www.roots.com/on/demandware.static/-/Sites-RootsCA-Library/default/dw12f03508/ content/homepage/annual-report/2018/index.html Gabel, J., CEO. (2018). Fellow Shareholders [Letter to Roots Shareholders] . Retrieved October 28, 2020, from https://www.roots.com/on/demandware.static/-/Sites-RootsCA-Library/default/ dw12f03508/content/homepage/annual-report/2018/pdfs/CEO_Letter.pdf Giving Comfort. (n.d.). Retrieved December 06, 2020, from https://www.roots.com/ca/en/200410-GivingComfort.html

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25 Jurevicius, O. (2013, April 25). Looking at your Value Chain will make you Smarter. Retrieved December 03, 2020, from https://strategicmanagementinsight.com/tools/value-chain- analysis.html MarketBeat. (2020, October 1). Roots Co. (ROOT.TO) Stock Forecast, Price & News. Retrieved November 30, 2020 from https://www.marketbeat.com/stocks/TSE/ROOT/ Mens Womens & Kids Clothing & Jeans: Old Navy Store Locator. (n.d.). Retrieved November 13, 2020, from https://oldnavy.gapcanada.ca/stores Paddon, D. (2019, September 12). HBC reports nearly a $1B Q2 loss, hurt by one-time charges, weaker sales. Retrieved October 28, 2020, from https://www.thestar.com/business/2019/09/12/hudsons-bay-co-reports-984m-second-quarter- loss-19b-in-revenue.html Post, C. (2019, February 05). Generational marketing ebook: Business Matters: Canada Post . Retrieved December 03, 2020, from https://www.canadapost.ca/blogs/business/marketing/deepening-roots-how-an-iconic-canadian- retailer-strengthened-ties-with-millennials/ Roots Canada . (2011, September 22). Retrieved December 06, 2020, from https://www.thecanadianencyclopedia.ca/en/article/roots-canada-ltd Roots Corporation: Annual Information Form . (2018, April 17). Retrieved October 12, 2020, from https://www.roots.com/on/demandware.static/-/Sites-RootsCA-Library/default/ dw9771b439/content/homepage/annual-report/2017/pdfs/Roots_AIF_2017.pdf Roots closing seven U.S. stores, reports $44.6M fourth-quarter loss . (2020, April 29). Retrieved October 28, 2020, from https://www.ctvnews.ca/business/roots-closing-seven-u-s-stores-reports- 44-6m-fourth-quarter-loss-1.4917094 Roots Donates More Than $1.0 Million in Products. (2020, September 02). Retrieved December 06, 2020, from https://www.newswire.ca/news-releases/roots-donates-more-than-1-0-million-in- products-through-a-national-initiative-in-partnership-with-brands-for-canada-s-united-hearts-for- canada-program-861993832.html Roots Reports Fiscal 2019 First Quarter Results . (2019, June 12). Retrieved December 03, 2020, from https://investors.roots.com/news-and-events/press-releases/press-release-details/2019/ Roots-Reports-Fiscal-2019-First-Quarter-Results/ Roots Workplace Code of Conduct (n.d.). Retrieved November 15, 2020, from https://www.roots.com/on/demandware.static/Sites-RootsCorporate-Site/Sites-RootsCorporate- Library/default/dw68b6914f/content/ABOUT_ROOTS_MASTER/workplace.htm

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26 Simply Wall St. (2020, February 6). Those Who Purchased Roots (TSE:ROOT) Shares A Year Ago Have A 52% Loss To Show For It . Retrieved November 02, 2020, from https://simplywall.st/stocks/ca/retail/tsx-root/roots-shares/news/those-who-purchased-roots- tseroot-shares-a-year-ago-have-a-52-loss-to-show-for-it Strategy Staff January 29, 2. (2001, January 29). Roots: Clothes, shoes and...vitamins? Retrieved December 03, 2020, from https://strategyonline.ca/2001/01/29/whatweretheythinking-20010129/ The coming demise of Roots? (n.d.). Retrieved December 02, 2020, from https://urbantoronto.ca/forum/threads/the-coming-demise-of-roots.31205/ York, G. (2007, September 21). Roots plants the flag in China . Retrieved October 28, 2020, from https://www.theglobeandmail.com/report-on-business/roots-plants-the-flag-in-china/ article4107804/ 5 reasons why Louis Vuitton bags are worth the money . (n.d.). Retrieved November 18, 2020, from https://www.designer-vintage.com/en/stories/5-reasons-why-louis-vuitton-bags-are-worth- money

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