Article CEO Aamir Baig at the company's store in Vancouver on Wednesday. Article will open a Toronto location this summer.Jennifer Gauthier/The Globe and Mail
After more than a decade of building its brand primarily online, Vancouver-based furniture retailer Article is launching a brick-and-mortar store expansion plan, in an effort to cater to customers who are hesitant to buy a sofa they’ve never sat on, or a coffee table they’ve never seen in person.
Late this summer, Article will open a Toronto location – its first store outside its home market of Vancouver – with a goal of opening four more in North America by early next year.
Article is just the latest in a slew of digital-first retailers who have realized the necessity of having a physical store presence over the years, including brands such as Casper, Skims, Warby Parker and Canadian retailers Indochino and Knix.
“The confidence factor of purchasing a product without the physical look and feel, is still a barrier to purchase,” Article chief executive officer Aamir Baig said in an interview.
Article has seen that firsthand: after opening its first and only physical store in Vancouver in 2024, annual sales in that market jumped by 47 per cent, making the city its fastest-growing market in North America. The average value of orders placed at that store were 20 per cent higher than online.
In most retail categories, the majority of customers still shop in physical stores, said Angus McOuat, a partner and head of the Canadian consumer and retail practice at consulting firm McKinsey.
“It’s especially true in Canada, and North America,” Mr. McOuat said. “Many companies realize they can only go so far in terms of growth without tapping that customer base.”
Article is looking for growth after a difficult few years. Like many furniture sellers, Article saw a huge demand spike during COVID, as people stuck at home spent more than usual on refreshing their spaces. Mr. Baig compares that period to a tsunami – a gargantuan wave that then crashed.
“It’s been an adjustment period. You build up that demand and the supply to cater to it, and then you adjust to the new realities,” Mr. Baig said.
Furniture sales continue to slump in tandem with real estate market
Sales by furniture stores in Canada totalled $14.4-billion last year, according to Statistics Canada. That was up 2.4 per cent from the year before, but still below the sales peaks in 2021 and 2022. And adjusting for inflation, sales are barely higher than they were prepandemic – up just 0.66 per cent compared to six years before, when measured at 2017 constant prices.
Mortgage rates remain higher than the historically-low levels seen during the pandemic, and home sales have fallen – metrics that closely track demand for furniture.
As it sought to regain financial strength, Article began cutting jobs in 2022, when it announced layoffs of roughly 17 per cent of its work force. The company now has 500 employees, less than half the number employed before those cuts. The company returned to profitable growth in 2024, according to Mr. Baig.
Article is hoping for growth after a difficult few years.Jennifer Gauthier/The Globe and Mail
“Now that we have stabilized ourselves out of the post-COVID demand shock, and are looking to continue to drive growth, physical retail is a very promising channel for us,” he said.
Beyond the first location in Toronto, the company is also planning to open stores south of the border by early 2027. The U.S. accounts for 80 per cent of Article’s revenue, and remains a crucial market for the company’s growth.
That has presented another challenge, as U.S. tariffs have affected the cost of imported goods. A large portion of Article’s manufacturing is in Asia. The company has been shifting some of its production out of China, which is subject to some of the most punishing duties, but Mr. Baig explained that some of the furniture industry’s categories – such as lighting – are still heavily dependent on that market. Exposure to tariffs has introduced “substantial” costs, he said, which affects profitability.
“We as a business have lean operations and healthy margins, so we can absorb it without materially changing prices on our customers,” Mr. Baig said.
In order to continue growing in a challenged industry, Article will have to take market share from other retailers. Physical stores not only serve customers hesitant to make big-ticket purchases online, but can act as a kind of marketing vehicle, giving a retail brand a bigger presence and increasing awareness among shoppers.
“Customers will always want more selection, better products, better price points, better service, more convenience,” Mr. Baig said. “And to the extent a retailer and a brand can do better on those dimensions, it stands to gain more of the share of the pie, even though the pie itself has shrunk.”