It’s hard to separate the Roots brand from Canada, and right now that brand is seeing strong demand at home and abroad.
According to company president and CEO Meghan Roach, the country and the 52-year-old clothing retailer both share core values: community, integrity, freedom, authenticity.
They’re also closely associated with the great outdoors.
“How you describe a Canadian,” says Roach, “is probably very similar to how you describe Roots.”
Roach says she was tapped for the top job in 2020 for her international perspective and focus on long-term investing, both of which she developed at a young age.
The Pembroke native was first exposed to capital markets by her grandfather, a Bell employee who took advantage of the company’s stock program to gift shares to his grandkids.
Roach also attended a boarding school with classmates from around the world and, after earning a commerce degree from Queen’s University, moved to the U.K. where she earned an MBA at Oxford.
After graduating business school, Roach worked for Searchlight Capital Partners, the private investment firm that bought a majority stake in Roots in 2015, and was appointed as a board member, then interim CFO, then CEO in 2020.
After a couple of years focused on stabilizing the struggling company and managing through the pandemic, Roach says Roots is now focused on growth, both at home and abroad, including expanding from its cosy winter-wear to all-season clothing.
Founded in Toronto in 1973 by Michael Budman and Don Green, Roots now employs 2,000 year-round, and up to 2,500 during its busier fall and winter seasons. The company currently has 221 retail outlets, including two in the U.S., 109 in Taiwan, and 110 in Canada, and ships to 75 countries.
Despite leading one of Canada’s most iconic brands, however, Roach jokes all anyone wants to talk about is Bo Bichette’s home run baseball, which she caught during Game 7 of the World Series.
The Star recently spoke with Roach from Roots’ leather factory in Toronto about how her long-term international thinking matches the ambitions of the legacy brand, its new direction under her leadership, and plans for the latest piece of stitched leather in her collection of Canadian heritage.
What first attracted you to investing?
My grandfather left his family’s farm to work for Bell Canada when he was 15. His job was to take this big metal pole with handles and knock out chunks of ground so they could put in telephone poles.
It was a difficult job, and they didn’t expect him to last very long, but he ended up spending his career working his way up there.
One thing he learned about early on was the employee stock program. When we were kids, he would gift us stocks and then create books for us where he tracked when he bought it, the dividend and the adjusted cost.
That interested me in the idea that there are two ways to earn; working and investing.
My dad, meanwhile, had a dental practice, which taught me a lot about entrepreneurship, and my mom, who was a retired nurse, managed his books, which introduced me to accounting.
Is that what inspired you to study commerce?
I studied commerce because it let you look at the business from all angles, not just economics but statistics, marketing and technology.
I studied German, Spanish and French, and that globalization piece was also interesting having gone to a very international boarding school with classmates from all over the world.
Were you planning to work in accounting?
Originally, I was thinking of either going into investing or consulting, but I started my undergrad right after the dot-com crash.
At the time, investing and consulting jobs were hard to come by, so there was a stability factor with accounting. I also really liked understanding company financials.
In third year, I did an internship at KPMG and then returned full time after graduating, while getting my accounting designation. I actually got my fellowship designation two years ago.
It feels like my career has been shaped by economic crises.
How so?
I left KPMG and joined the Ontario Teachers’ Pension Plan just as Lehman Brothers crashed in 2008.
There were significant job losses across the board, but finance was hit particularly hard, and from a private equity perspective a lot of portfolio companies were too.
After I left Teachers, I was in Europe during the sovereign debt crisis — first to do an MBA at Oxford and then working for a private investment firm called Searchlight Capital Partners — so those things shaped my career and shaped the way I look at investing and risks.
Did that prepare you for the pandemic?
I joke that I’m a wartime CEO.
At Searchlight I invested in heritage brands; the first portfolio company I worked on was M&M Food Market, before they acquired Roots on the day my first daughter was born in 2015.
I was put on the board of directors helping the Roots founders transition to a professional management team until it went public in 2017. Then, in 2019 the company was having challenges, the CFO left, and since I had an accounting background and knew the business I was asked to come in as interim CFO.
In January of 2020 the board decided they wanted to make a change and started recruiting a new CEO, and I stepped in as interim CEO. I was part of the team looking at candidates, but then they asked me to make it permanent that May.
I had spent my entire career in private equity and there was a lot that needed fixing at Roots, but the board and the founders had faith in me, which meant a lot.
As soon as I started our distribution centre in Wuhan, we started to see something happening in Asia, and we knew it was going to have a major impact.
Working in private equity really requires you to think long-term, and I knew that no matter how bad things got we would eventually get back to normal, and that’s how I approached the pandemic.
We focused on health and safety, financials and operations, and then we built teams to executive on each. By that point, managing through crisis felt comfortable.
What’s the focus now?
Growth, across multiple facets.
When I came in, I restructured a few aspects of the business, closed a few stores in the U.S. and China with the anticipation of a future return as we focus on reaching customers digitally.
Our biggest business is in Canada, but I think there’s more of an opportunity to think globally. It’s been a challenge; first because of the pandemic, which lasted a lot longer in China, and now with the situation in the United States. We’re investing in things like consistency, branding, marketing and preparing the business to be more global.
As far as products, we’ve made some significant changes, and today 95 per cent are made with sustainable materials, which has been a big area of focus. We’re also looking to expand certain product lines, like our ‘Active’ line, or our water-resistant ‘Roam’ line, investing in more technical properties to make items more suitable for outdoor activities.
We also continue to focus on our sweats lines, which is always a big part of our business, investing in new logos, developing softer plush fleece for our ‘Cloud Collection,’ and evolving that category to be more fashion forward.
We’re also driving growth by investing in branding and marketing, not just in terms of advertising but how we show up for things like store openings, renovations or events, like with our recent Seth Rogen campaign, where we’ve invested in a big celebrity partner for the holidays.
Canadians know us — 95 per cent say they’re familiar with Roots — but if you haven’t visited in a while you might be surprised. We’ve changed a lot from the sweats brand from your childhood.
Many also know Roots from the Olympics. Any plans to outfit Team Canada in the future?
At one point we also outfitted the British team, the U.S., and Barbados, which goes back to the founder’s global mindset.
I never say never. We’re incredibly proud of our athletes, we’re very proud to have been an Olympic sponsor, and if there’s an opportunity for us to get involved again, we would be open to it. We’re also proud of HBC and Lululemon, who took it on after us.
For the meantime, our Canada Collection, which we’ve always had, continues to sell well, especially around moments like the Olympics and Canada day.
To what extent is the Roots brand tied to the country’s?
There’s obviously a strong association.
The founders came up with the brand at summer camp in Algonquin Park and they had something called the ‘Algonquin Test,’ where they pick up a piece of clothing and say, “Could you wear this in Algonquin Park?” and if the answer was “no,” they wouldn’t make it.
People associate Canada with the great outdoors, and that brings authenticity to the brand, because we’ve taken it from Algonquin Park to the rest of Canada and now the world.
What are you going to do with Bo Bichette’s Game 7 home run baseball?
I’ve been CEO of Roots for six years and when you Google my name now that’s all that comes up.
I haven’t had time to think about it, so right now it’s in a Ziplock bag in a safe, but I’m hoping to get it authenticated and display it at some point.
