Backpacks are displayed at Herschel Supply Company’s new flagship and first North American store, in Vancouver, on Monday June 11, 2018. THE CANADIAN PRESS/Darryl Dyck

Canadian backpack makers eye expansion abroad, morph into lifestyle brands

As parents prepare to shell out hundreds of dollars on school supplies ahead of the first day of school, Canadian backpack makers readily await one of the busiest sales seasons for the industry.

Canada’s backpack makers are experiencing a boon beyond the traditionally busy back-to-school season as students and consumers with all types of carryall needs flock to their designs.

That demand is pushing homegrown names like Herschel Supply Co. and Matt & Nat to scale up and open flagship stores, expand their bricks-and-mortar footprints and release products beyond just schoolbags.

The back-to-school lead-up is “hot, hot, hot, hot,” said Manny Kohil, CEO of Montreal-based vegan bag brand Matt & Nat.

“Month of August is always on fire,” he said, adding that flows into the first week of September before slowing down.

Parents plan to spend an average of more than $300 on back-to-school shopping this year, according to an online survey conducted by Maru/Blue for Capital One.

Parents will spend an average of about $45 on backpacks — though that jumps to about $68 for high-school students. About 40 per cent of respondents admitted they’d likely go over budget on supplies.

The survey was conducted between July 27 and 29, and questioned 276 adults with school-age kids. The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Herschel Supply Co. anticipated a line out the door at its flagship Vancouver store, which opened this summer, in the three weeks leading up to the first day of school.

The business certainly benefits from that time of year, said Lyndon Cormack, one of three brothers who co-founded Herschel in 2009.

But it’s not dependent on it, he said, noting backpacks have become more “like an every-day purchase” as people increasingly flock to urban centres, live in smaller spaces, rely on public transit and commute using methods other than cars.

Both brands saw an upsurge in demand that’s led them to open retail stores and plan domestic and international expansions.

“I think that a retail store still hands down does it better than anything in the world in relation to conveying a brand’s purpose and message,” Cormack said.

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Herschel’sfirst shop is a logical step as the company previously only sold its goods online and through other retailers, like department stores, he said.

In the roughly 5,000-square-foot space, the brand can present all its products to consumers rather than a small selection curated by another retailer, like the Hudson’s Bay Co., Cormack explained.

Already, more stores are in the works, though Cormack said there’s no specific timeline for future openings.

The company is eyeing a few spaces in New York City and London, England, at the moment. Within Canada, it definitely makes sense to eventually look at Toronto, he said.

Matt & Nat already operates six locations, including an outlet shop outside of Montreal. It will soon open another discount store near Toronto, said Kohil, and plans to grow its presence to up to 15 stores in Canada and abroad next year. International locations will include the United States, England and the Netherlands, he said.

He opened the chain’s first store more than two years ago “to elevate the brand,” he said.

But the rucksack companies’ expansions aren’t just into real estate. Both are evolving into so-called lifestyle brands.

Matt & Nat branched out beyond handbags and wallets by introducing shoes in the spring of 2016. It now also sells sunglasses and candles.

Meanwhile, less than 50 per cent of Herschel’s sales come from backpacks, said Cormack. The company also makes wallets, laptop sleeves and luggage. It expanded into apparel with packable windbreakers and plans to add other diverse categories into its mix in the future.

Herschel appears to be following a similar trajectory to another Canadian retailer: Canada Goose. The luxury winter jacket company started as an e-commerce business, then opened its own stores at home and eventually abroad before holding an initial public offering.

Cormack doesn’t deny Herschel could eventually go public, but said the company is certainly not looking at an IPO in the near future.

Companies in this story: (TSX: GOOS) (TSX:HBC)

Aleksandra Sagan, The Canadian Press

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