Personal Accessories in Canada

Challenging trading environment amid economic uncertainty suppress growth in personal accessories

The trading environment remained challenging for Canada’s personal accessories companies in 2019. The 2017 bankruptcy of Sears Canada sent shockwaves throughout the country’s retailing industry and beyond, while the entry and expansion of numerous international retailers has largely redefined the country’s retail environment.

Rapidly evolving retailing environment presents challenges and opportunities

The challenging and somewhat polarised retail environment that characterised sales of personal accessories for much of the review period remained in effect in 2018. In particular, the strong growth seen in sales through internet retailing is a clear indication that Canadian consumers are now fully prepared to embrace online shopping.

Diverse competitive environment defines personal accessories

The competitive personal accessories is highly fragmented and includes a diverse mix of foreign and domestic retailers and manufacturers, international retail chains and independent retail stores and branded and private label players. During the review period, the entry and expansion of high-end department stores such as Saks Fifth Avenue and luxury brand boutiques including Breitling and Hublot has transformed the way that people shop for personal accessories in major urban centres such as Toronto, Montreal and Vancouver.

Internet retailing continues to significantly outperform the industry

Internet retailing recorded double-digit current value growth in personal accessories again in 2018, significantly outperforming the sluggish industry sales growth. This is a reflection of the major shift in the purchasing habits of Canadian consumers, specifically the increasing propensity to shop online and complete purchases through internet retailing, rather than purchasing items in-store.

Improving economy and challenging competitive environment mean a mixed outlook

The forecast period is likely to see personal accessories remain a challenging industry to operate in, although with the economic situation set to improve somewhat, there is likely to be less pressure on volume sales and unit prices. The defining industry trend is likely to be the shift towards internet retailing for the distribution of personal accessories as the desire to research products and compare prices online in order to get the best deals slowly develops into the desire to complete purchases online as well.

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