Canadian sportswear brand Roots posts $12.3 million profit in fourth quarter thanks to online sales

Roots reported a profit of $12.3 million in the fourth quarter of 2020, even as total sales fell to $99.4 million from $127.5 million in the fourth quarter of 2019, but its e-commerce sales grew 60% in the quarter.

Founded in Toronto, Canada in 1973, the company is known for its high-end brand sportswear and leather goods. It has more than 120 stores in North America and more than 150 stores worldwide, providing online delivery services to more than 70 countries or regions.

Although some Roots stores were forced to close due to the epidemic , the company still achieved profitability in the last quarter of 2020 despite a decline in total sales, thanks to the strong momentum of its online sales .

“Our fourth quarter profitability was in line with last year despite the closure of the majority of our retail stores during one of our busiest and most productive times of the year,” Roots CEO Meghan Roach said in a statement.

Roots said the fourth-quarter sales decline was due to temporary store closures caused by the pandemic, but this was partially offset by strong online sales. "While we continue to face temporary government-mandated store closures in the first quarter of 2021, we are confident in our ability to manage the business through these challenging times," Roach said.

Even as the company moves increasingly online, physical stores remain a focus for the retailer. “We’ve spent a lot of time over the last year really understanding our customers, their lives, their lifestyles and what they want from a product perspective,” Roach said, noting that 60% of Roots customers say they still want to go into a store to try something on.

Canada's e-commerce boomed in 2020, with 6.9 million online shoppers. Some organizations predict that in 2021, Canada's online shoppers will exceed 7.9 million. During the epidemic, online sales helped companies earn revenue. As the epidemic blockade is reduced, offline stores will prosper again, but the changes brought about by online sales are irreversible, and a large number of consumers will still choose to shop online.

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