Garage, a Canadian fashion brand with cult status among Gen Z, opened a new store in London this week and two in Manchester last month, according to Glossy. The brand is running at a pace of 20 profitable stores per year, with recent locations added in Louisiana and Hawaii since November. While most fashion brands treat physical retail as a cost center or brand exercise, Garage is reporting unit-level profitability on every door.
The mechanics are deliberate. Garage stores sit inside malls where Gen Z already congregates, not in standalone street locations. The brand stocks trend-responsive pieces at accessible price points and turns inventory fast. Store staff are trained to engage groups, not solo shoppers, because Gen Z shops in pairs or packs. Each store functions as both a transaction point and a content backdrop — fitting rooms are designed to be filmed, displays change weekly, and the brand seeds TikTok creators in new markets before opening day.
This works because Garage aligned the store format with how the customer already behaves. Gen Z never abandoned physical retail; they abandoned stores that felt like showrooms for an e-commerce operation. Glossy reports that Gen Z values the social experience of shopping together, trying things on in real time, and walking out with product the same day. Garage gives them a space to do that without friction. The profitability comes from high visit frequency, in-store conversion, and eliminating the return rate that crushes online-only apparel margins. A store that turns 20-30 times per year on fast fashion velocity can cover rent and labor in 90 days, then print contribution margin for the remaining nine months.
The steal for a small physical product brand: open one test location in a format where your customer already spends time, staff it to serve groups instead of individuals, and build the space to be filmed. If you sell outdoor gear, that's a farmer's market or festival circuit booth, not a lease. If you sell kitchen tools, it's a demo station inside a Sur La Table or Williams Sonoma on consignment terms. If you sell pet accessories, it's a corner inside a high-traffic doggy daycare. The rent model matters less than the traffic guarantee. Garage proves you can skip the $15,000/month lease and instead pay 10-20% of gross sales in a shared or pop-up format, then scale only the locations that hit $40,000+ in monthly revenue within 60 days. Staff one person who can work a group of three customers simultaneously, not one-on-one. Design your display so customers pull out their phones. Record what people ask for in the first 30 days, then stock only those SKUs in the next location. Garage didn't open 20 stores on a hunch; they refined a format that worked, then repeated it.
The broader pattern: physical retail is not dead, but the old model is. Brands that treat stores as community access points with transaction capability will win the next five years. Brands that treat stores as billboards with a register will close them.