Aritzia shifts some supply from China amid U.S. tariffs, CEO says

The Vancouver-based apparel company said Thursday that the Asian nation is one of the top three countries it relies on to make its clothing.

Aritzia Inc. says it is shifting some of its supply chain away from China, which has been hammered with triple-digit tariffs from the United States.

The Vancouver-based apparel company said Thursday that the Asian nation is one of the top three countries it relies on to make its clothing, but it intends to cut its China production from 25 to 20 per cent for its upcoming fall-winter season.

Its reliance on China will fall even further by next spring, when Aritzia predicts just a “mid-single-digit percentage” of production will happen there, chief executive Jennifer Wong said.

“We are taking the word diversification right down to the very epitome of what diversification means,” she told analysts on a call.

As part of that diversification, she said the business will turn to long-standing partners in the 12 other countries, like Vietnam and Cambodia, where Aritzia produces clothing. It will also explore new countries and broker relationships with new suppliers that can improve its existing products.

While she positioned some of that work as a reflection of the company’s decade-long diversification plan, she also credited tariffs with spurring change.

U.S. President Donald Trump has been lobbing tariffs at Aritzia’s home country, Canada, for much of the year. China has also fallen into his crosshairs and been charged a 145-per-cent duty, which it responded to with its own 125-per-cent rate.

For Aritzia, the higher fees pose a problem because the company’s web-like supply chain leaves its apparel crossing the globe to enter either its home market or its biggest expansion target, the U.S.