The following research report contains market research, analysis, statistics and business intelligence relating to research on Men's Apparel Industry In Canada.

Order the 2008 Edition of this report now by adding this item to your cart or for faster service call us at 212-398-5505 to speak to a customer service representative.

ABSTRACT
The Canadian Apparel market, with a population of approximately 30 million, was valued at US$6.1 billion in 1998. Approximately 54.1 percent of market demand was satisfied by domestic production and 45.9 percent by imports, as Canadian manufacturers continued to lose market share to imports. Domestic apparel sales dropped from 60.4 percent of the total market in 1994 to 54.1 percent in 1998 a 6.3 percent loss to imports over the four year period. Canada's apparel market is projected to expand at an annual real rate of two percent through 2000.

Canadian apparel imports were valued at US$2.8 billion in 1998 and accounted for 45.9 percent of the total apparel market. Between 1994 and 1998, the share of the market satisfied by imports grew 6.3 percent, from 39.6 percent to 45.9 percent.

The United States is Canada's second-largest supplier of apparel after China. Asian suppliers of low-cost apparel constitute the strongest foreign competitors to U.S. apparel exporters to Canada. U.S. competitiveness in Canada has, however, increased due to the total elimination of duties and tariffs on U.S. -origin goods under NAFTA. U.S. exporters also enjoy several other advantages over Asian competitors in Canada, such as: geographic proximity, similar consumer habits and fashion trends; a higher quality image; and brand name recognition. U.S. exporters of competitively priced, high quality, niche apparel products with the right marketing strategy can expect to do very well as the Canadian market expands moderately and imports continue to satisfy an increasing share of market demand.

The key to successful marketing of apparel in Canada is quality, style, price and service. The Canadian market for apparel differs significantly from that of the United States, not only in size and price, but also in the variety of consumer preferences among regions and provinces. U.S. suppliers should work closely with Canadian buyers to best respond to local preferences within Canada's distinct regional markets.
Canadian Men's and Boys' Apparel

The Canadian Apparel Industry is comprised of 5 sub-sectors: Men's and Boys' apparel; Women's Apparel; Children's Apparel; Fur Goods; and Other Apparel. This analysis addresses the Men's and Boys' segment of the Apparel Market.

The Canadian Men's and Boys' apparel segment, serving a population of 15 million males, continues to out perform all other sectors of the Canadian apparel market and is expected to lead the moderate two percent growth projected in the Canadian apparel market through 2000. The Men's and boys' apparel market accounts for nearly one third, or 33 percent, of the total Canadian apparel market and has increased moderately as a percentage of total market sales over the last few years. In 1997 the men's and boy's apparel market was valued at C$2,891.6 (US$2,088.6) million, and increased by 1.7 percent to C$2,941.0 (US$1,999.9) million in 1998. The men's and boys' apparel market is projected to grow to C$2,990.4 (US$2,033.5) million, or 1.7 percent, in 1999. A projected annual real growth rate of 2 percent is forecasted for the period 2000-2001.

Domestic shipments have consistently lost market share to imports, declining from 55.1 percent of total market in 1996, to 52.8 percent in 1997 and 50.8 percent in 1998. The market share of imported men's and boys' apparel increased from 44.9 percent in 1996 to 47.2 in 1997 to 49.2 percent in 1998. These imports are projected to account for 51.1 percent of the total Canadian men's and boys' apparel market in 1999.

The United States and China continue to be the largest suppliers of men's and boys' apparel to Canada, followed by Hong Kong, India and South Korea. Total 1997 imports in this sector were valued at approximately C$1,365.6 (US$986.4) million, and increased 5.9 percent to C$1,446.8 (US$983.8) million in 1998. Imports are projected to grow another 5.6 percent to C$1,528.0 (US$1,039.0) million in 1999. Imports of men's and boys' apparel are also projected to grow at an annual real growth rate of 2-4 percent between 2000-2001.

Canadian imports of men's and boy's apparel from the United States have grown over the last few years primarily due to the North American Free Trade Agreement (NAFTA). U.S. imports were valued at C$279.4 (US$208.1) million in 1997 and increased 2.4 percent to C$286.0 (US$194.5) million in 1998. Imports from the U.S. are projected to grow a significant 4.4 percent, to C$298.7 (US$203.1) million, in 1999. Furthermore U.S. exports to Canada are expected to grow at a real annual rate of 2-4 percent, same as the total growth in imports, from 2000 through 2001.

While Canadian apparel imports have increased so have their exports of men's and boys' apparel over the last few years. Exports in this category grew 13.7 percent from C$678.8 (US$490.3) million in 1997 to C$771.8 (US$524.8) million in 1998, and are projected to expand 12 percent to C$864.8 (US$588.1) million in 1999. According to industry experts, the slow growth in the domestic market coupled with a weak Canadian dollar has prompted domestic manufacturers to target export markets with a particularly strong focus on the United States. In 1998, approximately 95 percent of total Canadian apparel exports went to the United States, up from 89 percent in 1993.

STATISTICAL DATA
TABLE I Canadian Market for Men's and Boys' Apparel (CDN$ millions)

Estimated Average Annual Real Growth     1997   1998   1999   2000-2001

Import Market     1,365.6   1,446.8   1,528.0   2%

Production     2,204.8   2,266.0   2,327.2

Exports     678.8   771.8   864.8

Total Market     2,891.6   2,941.0   2,990.4   2-4%

U.S. Imports     279.4   286.0   298.7   2-4%

Exchange Rate:     0.7223   0.6800   0.6800

Inflation Rate:     1.6   1.0   1.5

Receptivity Score (1-5) 5 - extremely receptive

Canadian consumers are very familiar with U.S. brand name apparel and are very receptive to U.S. fashion, designs and product quality. Canada's close proximity to the United States; similarities in consumer behavior and lifestyles; and benefits derived from the NAFTA; make U.S. apparel exports very competitive in Canada, despite the current differences in currency exchange. Hence a receptivity rate of 5 is assigned.

TABLE II

Canadian Men's and Boys' Apparel Market (US$ Millions)

    1997   1998   1999

Import Market     986.4   983.8   1,039.0

Production     1,592.5   1,540.9   1,582.5

Exports     490.3   524.8   588.1

Total Market     2,088.6   1,999.9   2,033.5

U.S. Imports     201.8   194.5   203.1

Import Market Share (%)  1997   1998

United States     20.4%   19.7%
China     19.0%   19.8% Hong Kong     9.0%   6.8%
India     6.2%   6.8% South Korea     5.1%   6.1%

Notes to Statistical Table

1. Total Market equals Imports plus Local Production less Exports.

2. Apparent discrepancies in percentages and dollar values between the two tables result from currency conversions. Due to exchange rate fluctuations, the overall annual real growth rate will appear to differ when examining the statistical data in U.S. dollars.

3. Data Sources: Import, export and local production figures contained in Table I and II originate from a variety of sources including Statistics Canada, Industry Canada, Associations and Trade Publications. Where data was not available or incomplete, best estimates were utilized.

4. Men's and boys' apparel included in this subsector analysis are classified under the Harmonized System (H.S.)

Codes listed below:

H.S. 6101.10 - 6101.90   Men's and boys' overcoats, car coats, capes, cloaks, anoraks, wind breakers, and similar articles, knitted or crocheted, of wool, cotton, synthetic fibers, and other textile materials

H.S. 6103.11 - 6103.19   Men's and boys' suits of wool, cotton, synthetic fibers and other textile materials, knitted

H.S. 6103.21 - 6103.29   Men's and boys' ensembles of wool, cotton, synthetic fibers and others, knitted

H.S. 6103.31 - 6103.39   Men's and boys' suit-type jackets and blazers of wool, cotton, synthetic fibers and others, knitted

H.S. 6103.41 - 6103.49   Men's and boys' trousers, bib and brace overalls, breeches and shorts of wool, cotton, synthetic fibers and others, knitted

H.S. 6105.10 - 6105.90   Men's and boys' shirts, knitted or crocheted, of cotton, man-made fibers and others

H.S. 6107.11 - 6107.19   Men's and boys' underpants and briefs of cotton, man-made fibers and others, knitted

H.S. 6107.21 - 6107.29   Men's and boys' nightshirts and pajamas of cotton, man-made fibers, and others, knitted

H.S. 6107.91 - 6107.99   Men's and boys' bathrobes, dressing gowns and similar articles, knitted or crocheted of cotton, man-made fibers and others

H.S. 6109.10 - 6109.90   Men's and boys' T-shirts, singlets, tank tops and similar garments, knitted or crocheted, of cotton, man-made fibers and wool

H.S. 6110.10 - 6110.90   Men's and boys' pullovers, cardigans and similar articles, knitted and crocheted, of cotton, wool and fine animal hair

H.S. 6112.31 - 6112.39   Men's and boys' swimwear of synthetic fibers, other textile fibers, knitted

H.S. 6201.11 - 6201.19   Men's and boys' overcoats and similar articles of cotton, wool, man-made fibers, not knitted

H.S. 6201.91 - 6201.99   Men's and boys' anoraks and similar articles of cotton, wool, man-made fibers, not knitted

H.S. 6203.11 - 6203.19   Men's and boys' suits of wool, fine animal hair, synthetic fibers, other textile materials, not knitted

H.S. 6203.21 - 6203.29   Men's and boys' ensembles of cotton, wool, fine animal hair, synthetic fibers, not knitted

H.S. 6203.31 - 6203.39   Men's and boys' jackets and blazers of cotton, wool, fine animal hair, synthetic fibers, not knitted

H.S. 6203.41 - 6203.49   Men's and boys' trousers and shorts of wool, cotton, fine animal hair, synthetic fibers, not knitted

H.S. 6205.10 - 6205.90   Men's and boys' shirts of cotton, wool, fine animal hair, man-made fibers, other textile materials, not knitted

H.S. 6207.11 - 6207.19   Men's and boys' underpants and briefs of cotton, other textile fibers, not knitted

H.S. 6207.21 - 6207.29   Men's and boys' nightshirts and pajamas of cotton, man-made fibers, other textile materials, not knitted

H.S. 6207.91 - 6207.99   Men's and boys' bathrobes, dressing gowns of cotton, man-made fibers, other textile materials, not knitted

H.S. 6210.20 - 6210.40   Men's and boys' overcoats and similar articles, not elsewhere specified

H.S. 6211.11   Men's and boys' swimwear of textile materials, not knitted

H.S. 6211.31 - 6211.39   Men's and boys' garments of wool, fine animal hair, not elsewhere specified, not knitted

H.S. 6215.10 - 6215.90   Men's and boys' ties and cravats of silk, silk waste, not knittedA. MARKET ASSESSMENT

Market Demand

The Canadian apparel market is projected to grow two percent through 2001. This growth will be spurred mainly by changing demographics as well as economic and lifestyle factors. The men's and boys' apparel market, serving a population of 15 million males, accounts for nearly one third, or 33 percent of Canada's total apparel market and is also projected to grow at a annual rate of two percent, in step with the total apparel market through 2001.

The highest penetration of imports in the Canadian apparel market has been in the men's and boys' subsector. Canadian men have been building wardrobes consisting of better men's casual wear and sales to the 35 and over segments have been particularly strong in recent years. The greatest growth in the men's market during this decade has been in the 45 to 54 year old, and 65 and over categories.

In 1998, all men's merchandise categories registered retail sales growth. The largest increases were in men's sweaters and shirts, which were up 20 percent, and men's pants, which increased eight percent in sales. The men's suits and sport coats segments registered a decrease in unit sales and an increased in revenues. Over the past five years, the suits and sports coat category has been the only segment to continually lose share in the men's wardrobe. Since 1996, outwear has also declined in importance, while sweaters and shirts have increased. In the last two years fleecewear and activewear have lost market share in men's sports apparel. The "casualization" of the men's clothing sector continued unabated in 1998, as seen by the abnormally large increases in golf shirt sales and men's casual pant sales. Dress shirt sales also continued to grow by double-digits in 1998 as men expanded their wardrobe to include a growing array of colored dress shirts.

Changing demographics in Canada have played a significant role in the apparel market. Canada's growing population due to increased immigration and its aging baby boomers bode well for the apparel industry. As baby boomers enter their years of highest earnings, apparel producers need to address their evolving demands, which place a greater emphasis on quality, comfort, functionality, value and service. The children of baby boomers also constitute an important market element in Canada. Today's Canadian teenagers have greater amounts of spending money than ever before and account for a growing proportion of apparel purchases. Teens are also responding to Internet marketing promotions, creating new opportunities for suppliers with e-commerce capability. The 65-and-older segment of the Canadian population also presents significant export opportunities for U.S. apparel manufacturers. This growing segment is fit and active in Canada and has disposable income to spend on clothing suitable for its increasingly active lifestyle.

The Canadian economy grew by 3.1 percent in 1998. A consensus of private sector forecasters estimates that growth will ease to 2.9 percent in 1999 and 2.4 percent in 2000. These growth projections are in line with an anticipated slowdown in the global economy and lingering financial uncertainties. The Canadian economy is, however, expected to outperform its G-7 counterparts, with the exception of the United States.

Private consumption has been forecast to grow by a least two percent in 1999 and again in 2000. While consumer spending is threatened by record high consumer debt and a low savings rate (2.3 percent in 1998), impetus for growth should come from relatively low interest rates, net wage and employment gains, and fiscal stimulus provided in the fiscal year 1999-2000 Canadian federal budget introduced in February 1999. Business investment should also benefit from low interest rates and firming commodity prices, which bodes well for corporate profits, employment, and consumer spending.

Growth in Canada's export sector should continue to be fueled by ongoing strength in the U.S. economy and Canada's low dollar. Global disinflationary pressures have more than offset the negative impact of the low Canadian dollar on import prices and consumer price inflation. Consequently, Canada's inflation rate is at the lower end of the Bank of Canada's one-to-three percent target band.

There are great similarities between Canadian and U.S. consumer behavior, tastes and lifestyles. Overall, Canadian consumers are familiar with U.S. brand names and are very receptive to U.S. fashion, design and product quality. However, there are regional differences in consumer behavior in Canada. Quebec's largely French-speaking population is heavily influenced by European styles and responds favorably to avant-garde fashions. Many new European fashions have actually worked their way into the North American market after their first appearance in the province of Quebec. Consumers in Ontario and other provinces on the other hand tend to be more conservative, with a preference for basic fashion lines. On a provincial level, Canadian apparel sales are strongest in Ontario, followed by Quebec, the Prairie Provinces of Alberta, Manitoba, and Saskatchewan, British Columbia and the Atlantic Provinces of Nova Scotia, Prince Edward Island, Newfoundland, and New Brunswick in descending order, in line with Canada's population centers.

BEST SALES PROSPECTS

The men's apparel category that continues to offer U.S. exporters the best sales potential is knit shirts (golf shirts). Sensational sales in this category have grown 245 percent from 1990-1998 on an annual basis. Also registering gains in excess of 100 percent over the same period were men's shorts and casual pants. Other standouts were sales of men's underwear and socks. Men's sweaters and dress shirts also experienced sales increases in 1998 at 20 percent, followed by men's dress pants at eight percent.

The following categories accompanied by corresponding harmonized codes represent the best sales prospects for U.S. exporters of men's and boy's apparel to the Canadian market.

HS. 6110.10-6110/90 Men's and boys' pullovers, cardigans and similar articles, knitted and crocheted, of cotton, wool and fine animal hair

HS. 6105.10- 6105.90 Men's and boys' shirts, knitted or crocheted, of cotton, man-made fibers and others

HS. 6203.41 - 6203.49 Men's and boys' trousers and shorts of wool, cotton, fine animal hair, synthetic fibers, non-knitted

HS. 6205.20 - 6205.90 Men's and boys' shirts of cotton, wool, fine animal hair, man-made fibers, other textile fibers, not knitted

HS. 6207.11 - 6207.19 Men's and boys' underpants and briefs of cotton, not knitted

In 1998 Canadian retail sales of men's and boys' apparel totaled US$4.1 billion. Men's apparel accounted for US$3.5 billion and boys' apparel accounted for US$646.2 million. In terms of retail channels of distribution for men and boy's clothing, department stores realized strongest growth while specialty stores showed growth across the board

Canada's top 10 retailers of men's and boys' apparel based on 1998 market share were:

Men's Wear Boys Wear

1) Sears 11.2 % Sears 19.2 % 2) The Bay 9.5% Zellers 11.6% 3) Zellers 7.1% Wal-Mart 9.9% 4) Eaton's 6.1% The Bay 5.4% 5) Moores 4.3% Eaton's 4.1 % 6) Wal-Mart 4.2% Northern Getaway 3.5% 7) Mark's Work Warehouse 3.9% SAAN 3.1% 8) Harry Rosen 2.0% Bi-Way 2.2% 9) Costco/Price Club 2.0% K-Mart 2.1% 10) Tip Top 1.8% Costco/Price Club 2.1%

(Source: Canadian Soft Goods Index, Trandex North America (Toledo, Ohio)

B. COMPETITIVE SITUATION

Domestic Production

According to the Canadian Apparel Federation, approximately 60 percent of apparel firms are located in Quebec, 30 percent in Ontario and 10 percent in Manitoba. Major cities such as Montreal, Toronto, and Winnipeg are considered the "fashion hotbeds" of Canada. However, an increasing number of companies are locating in rural regions and there is strong growth in other provinces, particularly British Columbia and Alberta.

According to industry analysts, Canadian apparel firms are predominantly small and medium-sized enterprises. Close to 80 percent of these firms employ fewer than 50 employees and 90 percent employ fewer than 100 employees. Of the estimated 2,000 Canadian apparel manufacturers in business in 1996, approximately 25 percent of these were contractors that cut and sew garments for others. Industry statistics indicate that contractors are more pronounced in women's wear than in men's wear. Many large contractors are located in Quebec's eastern townships. Approximately 98 percent of these firms are Canadian owned. The remaining two percent are primarily controlled by U.S.-based multinational corporations and tend to be larger firms concentrating on manufacturing high volume staple products such as jeans, and underwear.

Canadian production of men's and boys' apparel was valued at C$2,204.8 (US$1592.5) million in 1997, and increased 2.8 percent to C$2,266.0 (US$1,540.9) million in 1998. A further 2.7 percentage increase in production is projected for 1999, bring the value of Canadian output to C$2,327.2 (US$1,582.5) million. Canadian production of men's and boys' apparel has increased only marginally over the last three years, due to strong competition from lower-cost imports. This situation has focused a large number of Canadian manufacturers on new export markets, as evidenced by the dramatic increase in Canadian exports in this sector over the last three years.

Design, quality and effective marketing remain critical to the future success and the growth of apparel manufacturing in Canada. Apparel manufacturers carrying out marketing strategies in Canada endeavor to influence the purchasing decisions of consumers. In addition to strategic pricing, manufacturers also attempt to adapt products to perceived consumer needs; alter designs to enhance fashion appeal; and use branding to project a specific product image. As consumers spend less time shopping, or revert to the Internet, product brand, quality and service have become more important elements of the marketing mix.

Canadian manufacturers strive to improve their design capabilities. Many firms have shifted from making knock-off products with mass appeal to producing designs for targeted markets, in order to achieve sales growth and increased profitability. The shift in product bases from standardized garments produced in mass production, to medium and upscale fashion produced in short runs for rapidly changing demand is nothing less than a shift from the industrial age to the knowledge economy. The primary consideration is no longer production cost per unit, but quality, continuous creativity, responsiveness to the market and the ability to carve out a unique niche. As in other knowledge industries, future success in the apparel industry will be built less on rivalry and more on product and company differentiation.

The Canadian apparel industry has responded and adapted to new competitive challenges rationalizing production, increasing its focus on fashion, developing niche products and significantly increasing its export marketing efforts. Canadian apparel producers have clearly demonstrated an ability to compete against imports in the medium-to higher-priced range, and to penetrate exports markets, particularly the United States.

Future growth opportunities for the Canadian industry will exist primarily in export markets, as the growth in domestic demand fueled by increases in population and real income is expected to be fairly modest. At the same time, the phase-out of import quotas on apparel as established under the GATT Uruguay Round Agreements may expose Canadian apparel producers to greater competition from low-wage suppliers formerly restrained under the Multi-Fiber Arrangement.

The recent consolidation and restructuring that has occurred in Canada's retail sector has had an impact on producers product planning and selling strategies, as large retailers use their purchasing power to extract favorable terms and narrow their supplier base. The expansion of U.S. retailers into Canada with their existing supplier base has served to reduce opportunities for Canadian apparel manufacturers in their home market.

Competitive pressures will continue to intensify in Canada, as products from low-wage sources gain market share. Over the next decade, the Canadian apparel industry's gross domestic product is expected to increase at a moderate rate while employment declines slightly. The industry is also expected to decline in the number of operating companies as the focus on design enterprises grows. Success for Canadian apparel firms will be found in their ability to adjust their business strategies in the face of trade liberalization and a rapidly changing commercial environment. Companies that develop a marketing focus, invest in appropriate technologies, adopt efficient production methods, and focus on product design and customer service will prosper in the increasingly competitive business environment.

The following is a partial list of major Canadian manufacturers of men's and boys' apparel in alphabetical order.

Name of Company City/Province Employees

Cluett Peabody Canada   Kitchener, ON   200-499
Cohen, S. Inc.     Saint-Laurent, QC 200-499
Coppley, Noyes & Randall,Ltd. Hamilton, ON.   500 Ð999
De Lingerie Chateau   Montreal, Quebec 500-599
Etac Sales Limited   Toronto, ON   200-499
Fruit of the Loom Canada Trois-Rivieres, Quebec 500-599
Les Tricots Main   Montreal, Quebec 200-499
MWG Apparel Corporation   Winnipeg, Manitoba 200-499
Peerless Clothing Inc.   Montreal, Quebec 100 Ð200
Penmans Incorporated   Cambridge, ON   200-499
Rennie Incorporated   Guelph, ON   200-499
Sport Maska     Saint-Hyacinthe, QE 200-499
Stanfields Limited   Trioro, NS   200-499
The John Forsyth Co.   Kitchener, ON   200-499
Tiger Brand Knitting Company, Cambridge, ON. 500-599
Western Apparel Mfg. Co. Toronto, ON   500

Import Market

Imports of men's and boys' apparel into Canada accounted for 32.6 percent of total market in 1991 and grew to 49.2 percent in 1998. In 1999 these imports are expected to claim 51% of the total market. Total men's and boys' apparel imports were valued at C$1,365.6 (US$986.4) million in 1997, and increased 5.9 percent to CS$1,446.8 (US$983.8) million in 1998. In 1999, imports are expected to grow another 5.6 percent to CS$1,528.0 (US$1,039.0) million. The forecasted average annual real growth in imports in 2000-2001 is 2-4 percent.

U.S. Market Position and Share

The United States continues to rival China as the largest supplier of men's and boys' apparel to Canada, followed by Hong Kong, South Korea, India and other suppliers.

U.S. exports of men's and boys' apparel to Canada increased in value from C$279.4 (US$201.8) million in 1997 to C$286.0 (US$194.5) million in 1998, a 2.4 percent increase over 1998. U.S. exports are projected to hit C$298.7 (US$203.1) in 1999, an increase of 4.4 percent over 1998.

China accounted for 19 percent of Canada's total men's and boys' apparel market in 1997 and increased to 19.8 percent in 1998. Other competitors such as Hong Kong, have lost ground in Canada. Hong Kong accounted for nine percent of total import market in 1997 but decreased to 6.8 percent in 1998. India, on the other hand, gained market in 1998 at 6.8 percent up from 6.2 percent in 1997. South Korea's share also increase by 1 percent in 1998 over 1997 from 5.1 percent to 6.1 percent.

U.S. exports to Canada are projected to grown by 2-4 percent over the period 2000-2001. In the short term, the low Canadian dollar will continue to have a negative effect on imports (currently at C$.68 to US$1.00). However, the benefits derived from the U.S.-Canada Free Trade Agreements and subsequent North American Free Trade Agreement, (NAFTA), coupled with close market proximity, focus on quality products, U.S. brand name recognition in Canada, should all contribute to increased U.S. exports to Canada.

Competitive Factors

New U.S. exporters of apparel will need to take marketing and cultural differences into account when approaching the Canadian market. An understanding of cultural nuances and consumer preferences, including those of Canada's French-speaking and immigrant populations is crucial. U.S. exporters will find that Canadian buyers prefer to make sourcing decisions "on their own turf", rather than at U.S. trade shows, and want to deal directly with decision-makers. Quebec buyers also prefer to discuss their business transactions in French.

When a supplier chooses to sell through a Canadian agent, it is important that the agent be given the authority to make decisions. Canadian buyers are primarily interested in the cost of goods landed in Canada rather than in manufacturers "suggested retail price". They also pay strong attention to product quality. Canada's relatively small and highly diverse population expresses its individuality through a variety of styles and fabrics. U.S. suppliers that can sell in small volumes and offer a variety of high-quality fabrics and prints will be well received in Canada. However, suppliers should not expect to sell the same line to several different buyers. Willingness to offer exclusivity for a line can be an important factor for effective marketing in Canada. Quick response in filling orders is also expected by buyers, as many Canadian manufacturers presently offer a turn-around time of four to five weeks.

Marketing tips: When dealing with Canadian agents and retailers, who may lack broad international trade experience, U.S. apparel exporters should do the following:

1. Develop CIF price lists for the Canadian market. 2. Quote in U.S. dollars. 3. Contract with a Canadian customs broker. 4. Be willing to extend 60-day credit terms, as is common practice in Canada.

C. MARKET ACCESS

The Canadian men's and boy's apparel is sold through two major distribution groups: agents/representatives and manufacturers/importers/distributors. The distinction between the two groups is that agents/representatives place individual orders, in small lots for individual retailers (but do a greater overall volume of business than importers), and do little, if any, direct importation. Manufacturers, importers and distributors, on the other hand, take title to the goods, handle most of the importation documentation, generally buy in large quantities, and are responsible for distribution in Canada. Importers are smaller in number and are more selective, and because they provide value-added services, add significantly higher mark-ups. Both groups sell to specialty stores, department stores, discount stores, and small retail outlets. Canadian manufacturers use their own sales force and distribution networks to service retail accounts, whereas foreign manufacturers rely heavily on agents and distributors to market and distribute their products in Canada.

In the Canadian men's and boys' apparel market, Sears department store typify the middle of the market, while stores like Harry Rosen cater to the upscale market. Retail outlets like Tip Top and Jack Fraser defines the middle of the specialty store segment in Canada, while stores like Moore's cater to the older customer. The most competitive niche of the specialty market is the younger segment. Stores that sell jeans, such as Levi, Guess, Buffalo, compete against the full-line younger oriented stores, such as Saan and Northern Getaway.

Financing

Although specific financing arrangements vary between manufacturers, most companies typically follow the standard North American practice of 30-days-net payment requirements. However, exports should be willing to extend 60-day credit terms, as is common practice in the Canadian apparel industry. In addition to product financing requirements, U.S. exporters must account for additional costs such as potential currency and interest rate fluctuations, Canada's tax requirements, such as GST/PST (discussed in paragraph entitled tariffs and duties), as well as shipping and brokerage fees, when negotiating financing and payment agreements.

Permits

There are no trade barriers to U.S. apparel exports to Canada, although import permits are required. These import permits are used to regulate shipments from countries with which Canada has negotiated quota agreements on apparel imports. Import licenses are also used to monitor shipments from the United States, however, there are no quota restrictions on U.S. made apparel and licenses are granted to all applicants for a nominal fee. For further information regarding Canadian import permits contact the Import Controls Division of the Canadian Department of Foreign Affairs and International Trade (in the Key Contacts section).

Tariffs and Duties

As of January 1, 1998, the North American Free Trade Agreement (NAFTA), eliminated all tariffs and duties on U.S and Mexican made apparel and textile goods imported into Canada. A certificate of origin is required for each shipment. Exporters must distinguish between goods that are of U.S./Mexican origin from those only transshipped through the U.S. or Mexico. Goods falsely identified cannot enter Canada and will be returned to the supplier. Additional information may be obtained from Revenue Canada in the Key Contacts section).

All goods, including apparel goods are subject to a seven-percent Goods and Services Tax (GST). The GST is a value-added consumption tax, which is applied to all domestic and imported goods and services sold in Canada, and is calculated on the duty-paid value of the imported merchandise. The GST is paid to Revenue Canada by the importer once the goods clear customs.

Each province, except Alberta, also has a retail sales tax. The provinces of New Brunswick, Nova Scotia and Newfoundland have a Harmonized Sales Tax (HST) of 15 percent that combines the GST and the retail sales tax. The consumer or end-user of goods and services pays provincial retail sales taxes, and the retailer acts as an agent of the provincial government in collecting the tax. The following is a list of provincial sales tax rates.

Alberta     0
Northwest Territories   0
Yukon       0
British Columbia   7
Manitoba     7
Saskatchewan     7
Quebec       7.5
Ontario     8
Prince Edward Island     10%

Harmonized Sales Tax Rates (HST)

New Burnswick     15
Nova Scotia     15
Newfoundland     15%

Labeling and Advertising Regulations

Under the Canadian Textile Labeling and Advertising Act, all apparel exports to Canada require a label that shows 1) the dealer's full identification and 2) the fiber content of the article. All other information is voluntary.

A) Fiber Content: The generic name of each fiber used in the fabric, in excess of 5 percent, must be identified as a percentage of the total fiber mass of the item. The Textile Labeling Act requires these fibers to be listed in order of predominance on the label.

B) Dealer Identity: The identity of the dealer by name and full postal address under which the dealer normally carries out business is required on the label.

If the dealer is located in Canada, a CA number may be used in lieu of the company's name and address. The CA number in Canada is the equivalent of the RN number in the United States, and is the identification of the company that handles the product in the market. CA numbers are applicable only to Canadian companies or companies resident in Canada. U.S. companies may use the CA numbers of Canadian companies that represent them in the market, or ideally its own name, city, state and zip. The use of its own name on the label will also alleviate any future problems in the event a change of agent is necessary. CA numbers may be obtained from Industry Canada (see Key Contacts section)

C) Bilingual Requirements: All information regarding the fiber content of the article must be stated in both English and French. The dealer's name, address, and country of origin (when necessary) is required in only one of the official languages.

The Province of Quebec has additional requirements concerning the use of the French language on all products sold within the Province. All products must be labeled in French with French given equal prominence with other languages appearing on products to be sold in Quebec stores. For more specific information on French labeling requirements, contact the Office de la Langue Francaise (see the Key Contacts section).

D) Application of Labels: The labels on many apparel and textile items must be permanently attached and able to withstand at least ten cleanings. However, some articles, such as gloves, scarves and swimwear require a non-permanent label. Industry Canada provides a complete list of items requiring permanent and non-permanent labels (see Key Contacts section).

E) Advertising: Advertisements for apparel and textile articles are subject to the advertising requirements of the Textile Labeling and Advertising Regulations. Fiber content disclosures are not required in the advertising of the product. However, if the fiber content is mentioned, the generic names of all fibers must then be stated in descending order of predominance. False representations in the advertising of apparel and textiles are strictly prohibited. Copies of the Canadian Textile Labeling and Advertising Act may be obtained from Canada Government Publishing (see Key Contacts section).

SIZING AND CARE INFORMATION

Sizing:

Under the Textile Labeling Act, manufactures are not required to use specific size dimensions. The designation of sizes is at the discretion of the dealer, but must be accurate once determined. The Canadian General Standards Board provides information regarding standard Canadian garment dimensions and size designations for specific articles of clothing (see Key Contacts section).

Care Information:

Care labeling, either in symbols or written words, is used on a voluntary basis. If used, the care symbols must be presented in accordance with the National Standard of Canada, Care Labeling of Textiles. The Canadian care labeling program is based on five symbols illustrated in three traffic-light colors. Either of the two official languages may be used to convey special instructions not covered by the appropriate symbol. For further information contact Industry Canada (see Key Contacts section).

Flammability Standards

Under the Hazardous Products Act all consumer textile articles, are subject to a minimum flammability standard. Products not meeting the established standards cannot be sold, advertised or imported into Canada. For further information contact Health Canada (see Key Contacts section).


D. KEY CONTACTS

1) Department of Foreign Affairs and International Trade Export/Import Controls Division Textiles and Clothing Section P.O. Box 481, Station A. Ottawa, Ontario K1N 9K6 Canada Tel: (613) 996-3711 Fax: (613) 995-5137

2). Revenue Canada - Customs, Excise and Taxation Customs Border Services Branch Inspection and Control Division Connaught Building Ottawa, Ontario K1A 0L5 Canada Tel: (613) 954-6819 Fax: (613) 952-1698

3). Industry Canada Consumer Products Directorate Merchandise Standards Division Phase 1, Place du Portage 50 Victoria Street, 16th floor Hull, Quebec K1A 0C9 Canada Tel: (819) 953-3654 Fax: (819) 953-2931

4). Office de la langue Francaise 800 tour de la place Victoria Montreal, Quebec H4Z 1G8 Canada Tel: (514) 873-6565 Fax: (514) 873-3488

5). Canada Government Publishing Public Works and Government Services Ottawa, Ontario, K1A 0S9 Canada Tel: (819) 956-4802 Fax: (819) 994-1498

6). Canadian General Standards Board Sales Centre 22 Queen Street, Suite 1402 Ottawa, Ontario K1A 1G6 Canada Tel: (613) 941-8703 Fax: (613) 941-8705

7). Provincial Offices:

Manitoba: Manitoba Consumer's Bureau 258 Portage Ave., Room 302 Winnipeg, Manitoba R3C 0B6 Canada Tel: (204) 945-3800 Fax: (204) 945-0728

Ontario: Technical Standards and Safety Authority Corporate Services Division Upholstered and Stuffed Articles 3300 Bloor Street West The Mutual Group Centre, 4th fl., West Tower Etobicoke, Ontario M8X 2X4 Canada Tel: (416) 325-4088 Fax: (416) 326-1663

Quebec: Gouvernement du Quebec Ministere de l'Industrie du Commerce de la Science et de la Technologie Direction des activites commerciales et des operations 380, rue Saint-Antoine Quest, 4 etage Montreal, Quebec H2Y 3X7 Canada Tel: (514) 499-2176 Fax: (514) 499-2191

8). Health Canada Product Safety 2301 Midland Ave. Toronto, Ontario M1P 4R7 Canada Tel: (416) 973-4705 Fax: (416) 973-1746

B) Trade Associations

Apparel Manufacturers Association of Ontario 130 Slater Street, Suite 605 Ottawa, Ontario K1P 6E2 Canada Tel: (613) 565-3047 Fax: (613) 231-2305

Apparel Manufacturers Institute of Quebec 555 Chabeanel Street West, Suite 801 Montreal, Quebec H2N 2H8 Canada Tel: (514) 382-3846 Fax: (514) 383-1689

Canadian Apparel Federation 130 Slater Street, Suite 1050 Ottawa, Ontario K1P 6E2 Canada Tel: (613) 231-3220 Fax: (613) 231-2305 Internet: http://www.apparel.org

C) Publications

Style Magazine 1448 Lawrence Avenue, East, Suite 302 Toronto, Ontario M4A 2V6 Canada Tel: (416) 755-5199 Fax: (416) 755-9123 Contact: Doris Montanera, Editor

The Canadian Apparel Magazine Publisher: Canadian Apparel Federation 130 Slater Street, Suite 1050 Ottawa, Ontario K1P 6E2 Canada Tel: (613) 231-3220 Tel: (1-800-661-1187, ext. 224 Fax: (613) 231-2305 Internet: http://www.apparel.org

D) Trade Show

MAGIC International/WWD Magic (Annual)

Type of Show:   Trade Location:   Las Vegas Convention Center Products: Fashion apparel and accessories. Organizer:     Joe Loggia, Show Manager     Magic International     6200 Canoga Avenue, #303     Woodland Hills, CA. 91367 Tel: (818) 593-5000 Fax: (818) 593-5020

MAJOR RETAILERS/MASS MERCHANDISERS

Sears Canada Inc. 222 Jarvis Street Toronto, Ontario M5B 2B8 Canada Tel: (416) 362-1711 Fax: (416) 941-2807

Hudson's Bay Company 401 Bay Street Toronto, Ontario M5H 2Y4 Canada Tel: (416) 861-6112 Fax: (416) 861-4720

Zellers Inc. 5100 De Maisonneuve Boulevard, West Montreal, Quebec H4A 1Y4 Canada Tel: (514) 483-7600 Fax: (514) 259-9992

Wal-Mart 33 Adelaide Street West Toronto, Ontario M5H 1P5 Tel: (416) 361-2111 Fax: (416) 361-3282

K-Mart Canada Limited 8925 Torbram Road Brampton, Ontario L6T 4G1 Canada Tel: (905) 792-4400 Fax: (905) 793-4766

Costco/Price Club Eastern Canadian Region 3000 Jacques Bureau Laval, Quebec H7P 5P7 Canada Tel: (450) 686-4444

Costco/Price Club Western Canadian Region 3550 Brighton Street Burnaby, British Columbia V5A 4W3 Canada Tel: (604) 421-8353

Bi-Way 637 Lake Shore Boulevard. West Toronto, Ontario M5V 1A8 Tel: (416) 586-7000 Fax: (416) 586-7277

LARGEST SPECIALTY STORES

Tip Top Tailors 637 Lakeshore Boulevard West Toronto, Ontario M5V 1A8 Canada Tel: (416) 586-7173 Fax: (416) 586-7758

Mark's Work Warehouse Suite 30 1035 - 64 Avenue S.E. Calgary, Alberta T2H 2J7 Canada Tel: (403) 255-9220 Fax: (403) 255-6005

Randy River 100 Mainshep Road Weston, Ontario M9M 1L8 Canada Tel: (416) 742-3590

Jack Fraser Grafton Fraser Inc. 1210 Sheppard Avenue E. Willowdale, Ontario M2K 1E3 Canada Tel: (416) 492-6300 Fax: (416) 502-6313

Moore's - The Suit People 100 Norfinch Drive Downsview, Ontario M3N 1X2 Canada Tel: (416) 736-7520 Fax: (416) 736-4192

Harry Rosen Inc. 11 Adelaide Street W. Suite 200 Toronto, Ontario M5H 1N1 Canada Tel: (416) 361-0336 Fax: (416) 867-1991

Big & Tall 354 Donald Street Winnipeg, Ontario R3B 2H7 Canada Tel: (204) 944-9126

Northern Getaway 100 Mainshep Road Weston, Ontario M9M 1L5 Canada Tel: (416) 742-3590 Fax: (416) 742-2589

Saan Stores Limited - Saan Kids 1370 Sony Place P.O. Box 9400 Winnipeg, Manitoba R3C 3C3 Canada Tel: (204) 474-5300 Fax: (204) 474-5216

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Mens
Region: Canada
Industry: Apparel
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000200