Booming Canada Goose to open new stores in London, the USA, Canada and Tokyo - News : Retail (#861876) canada goose london

Booming Canada Goose to open new stores in London, the USA, Canada and Tokyo

When Canada Goose, the Canadian specialist in high-end down j rasptsgi. canada goose expeditionackets and parkas, was listed on the stock exchange last year, it also heralded its intention of building a monobrand retail network. In just a few months, Canada Goose has turned the plan into reality, by launching in Toronto and New York and announcing further openings in London and Chicago for the autumn.


Canada Goose appreciates the margins from direct sales to customers - Canda Goose

On top of this, the label has announced another couple of new stores in North America for the end of 2017: one in Calgary, Canada, inside the Cadillac Fairview Chinook Centre, and another inside Boston's Prudential Center. But the marquee event will be the inauguration of Canada Goose's first Japanese store. In a press release, the label wrote that "the new, 300 m2 flagship store will be run by the company's distribution partners, and will be located in the Sendagaya district, recognised as one of the hubs of high-end fashion in Japan."

Undeniably, Canada Goose's revenue growth is being driven by its direct-to-consumer expansion. In the first quarter, closed at the end of June, the label posted strong sales growth, notably thanks to its monobrand stores and to e-tail. Sales grew from CAD12.5 million to CAD28.2 million (€18.8 million), while gross margin skyrocketed, rising from 29.7% to 46.9%. Despite this, operating income remained in the red, with losses for nearly CAD15 million in the quarter, the same as in the previous fiscal year.

 

Translated by Nicola Mira

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Luxury - Ready-to-wear, Retail

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Baby, It's Cold Out There: Canada Goose Rolls Out Direct-to-Consumer Strategy

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Credit: Bloomberg

Dani Reiss, who runs Canada Goose Holdings Inc., used to be so anti-logo that he would cut the little crocodiles off his Lacoste shirts. Today, a prominent North Pole crest is emblazoned on the shoulder of each parka his company makes, enhancing their cachet with consumers as Amazon.com Inc.'s shadow looms large over the traditional retail landscape.

"I didn't like brands, which is very ironic I realize given our large logo," Reiss said in an interview from Canada Goose's Toronto head office. "What I learned when I started working here was that the stories behind these products were phenomenal, the reputation we had built was phenomenal, anybody who knew about it really liked it—but nobody knew about it."

Canada Goose turns 60 this year, but as a hot consumer brand it's a relative youngster. After selling through wholesalers for most of its history, it's only just beginning to roll out its direct-to-consumer strategy. The company is doing this in the midst of a growing threat from Amazon and declining mall traffic, giving it the ability to tailor its approach to the changing retail reality. Its strategy: rapid growth of e-commerce bolstered by a few flagship stores that Reiss says will help close the 15-point profit margin gap with its luxury peers.

A Canada Goose factory in Toronto.
A Canada Goose factory in Toronto. Credit: Cole Burston/Bloomberg

The direct-to-consumer approach has the added advantage of reducing Canada Goose's reliance on the struggling retailers that accounted for all of its sales just three years ago. Department store chains like Hudson's Bay Co.'s Saks Fifth Avenue, Bloomingdale's, Harry Rosen and Holt Renfrew are at the front lines of Amazon's assault on the industry, which has been forced to shutter stores and lay off employees amid declining mall traffic. This summer, Amazon said it would launch a service called Prime Wardrobe that lets consumers try on items at home before they buy, causing department-store shares to slump.

Retail Slump

"There's no doubt that the wholesale landscape today is languishing," said Reiss, who has been chief executive officer of Canada Goose since 2001. He's the third generation of his family to run the company, founded by his Polish immigrant grandfather in 1957.

He emphasized that Canada Goose still has a strong relationship with its wholesalers, while its popular outerwear and new line of knitwear are attracting shoppers in department stores. But Reiss believes the direct-to-consumer category, which accounted for 29 percent of Canada Goose's revenue in the fiscal year ended March 31, will grow faster and could one day overtake wholesale as the biggest source of sales.

"It's more clear to me today than ever how big that opportunity is," he said.

Select Stores

The pillar of its consumer strategy is e-commerce. Canada Goose has four country-specific sites -- in Canada, the U.S., U.K. and France—and plans to roll out seven more European sites this year with a plan to eventually be "online everywhere around the world," Reiss said.

Canada Goose is supplementing that online presence with a smattering of flagship stores. So far it's opened two, in Toronto and New York. Four more stores -- in London, Chicago, Boston and Calgary—are coming this year with a goal of 15 to 20 worldwide by 2020.

"We have been very disciplined over the last 20 years in every decision we've made," Reiss said. "We're going to apply the same discipline with our real estate decisions to make sure we don't sign any leases that we're going to regret in a few years."

Potential Growth

Analysts are encouraged by the potential growth trajectory of Canada Goose, which has seen its shares gain 42 percent since its trading debut in March, boosting its market value to C$2.58 billion ($2.16 billion).

"Canada Goose is the first ever hyper-growth softlines brand to arrive fully in this new digital era, and it should be amazing to have front-row seats to watch what happens when you incubate one of these young rocketships in a totally digital landscape," Evercore ISI analyst Omar Saad said in an April note initiating coverage of the retailer.

Saad estimated that Canada Goose's e-commerce sales already account for more than 20 percent of its total revenue, up from zero in 2014. This is well ahead of Burberry Group Plc, which has the next highest digital penetration of the luxury brands at 10 percent.

That has big implications for Canada Goose's gross margin, which was 53 percent in the fiscal year ended March 31. By contrast, Moncler SpA's was 77 percent in its last fiscal year, while Burberry, Hermes International and LVMH Moet Hennessy Louis Vuitton SE ranged from 65 percent to 70 percent.

For every 5 percent mix shift to direct-to-consumer, Canada Goose gains 120 basis points of margin, estimated BMO analyst John Morris.

A direct-to-consumer jacket sale provides two to four times more operating income than a sale of the same product through a wholesaler, according to Canada Goose's annual report. Revenue in the direct-to-consumer channel more than tripled in the 12 months ended March 31, compared with 12 percent in the wholesale channel.

"We believe that the shift of a greater percentage of our business to direct-to-consumer will be one of the things that helps improve our margins, for sure," Reiss said.

Winter Gear

To pull this off, Canada Goose needs to maintain the cache that has consumers across the northern hemisphere willing to spend up to $1,495 on its made-in-Canada parkas. For most of its history Canada Goose was a utilitarian brand, selling practical winter gear for use in the Far North.

"We made a best-in-class product but nobody really knew about it outside of the people who lived and worked in those places," Reiss said.

Reiss, 43, who joined the company in 1997, recognized its potential to be more than just a maker of utilitarian outerwear and became obsessed with the idea of brand authenticity.

He tried hard to raise Canada Goose's profile in Toronto but everyone told him the products were too utilitarian, too expensive, or both.

Coldest Place

"But when I traveled to Europe I found that in Europe they really understood it," he said. "They're like, 'Oh, this is a parka made in Canada that is used in the coldest places on Earth by anybody who knows. This is almost the platonic image of a winter jacket."'

Canada Goose's jackets took off in Stockholm first and quickly spread to Italy, Germany and even Japan but took longer to take root in their home market.

"In typical Canadian fashion, Canadians adopt their own things after everybody else does," Reiss said.

Canada Goose's next big frontier is China, where many upscale consumers are familiar with the brand through their travels.

"We're working on a China strategy as we speak," Reiss said. "China's a huge potential market for us."

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'Chilling cruelty, unspeakable suffering and corporate denial': Is this the TRUE cost of the season's must have fur-trimmed Canada Goose coat?

  • US sales of Canada Goose expected to top $30million this year
  • Company President Dani Reiss views America as the market with the 'greatest potential in the world'
  • Family founded business says it provides vital support to North Canada communities where trapping has been practiced for 300 years
  • But animal rights campaigners slam company's practice of trapping Coyotes for their fur as inhumane
  • Claim their efforts to address allegations have been stonewalled and have this week appealed for the brand to stop its use of fur

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They have made America their new frontier, forging into the US clothing market to become one of the season’s most recognisable brands with sales of Canada Goose outerwear expected to top $30million this year alone.

In a high profile year in the States, Kate Upton has appeared on the front of Sports Illustrated in one of their fur trimmed, down jackets and nothing much else.

It isn't the only firm to market such coats, yet Canada Goose has rapidly established itself as the label of choice for the well-known and the well-heeled braving the frigid weather blown in on the polar vortex.

But today MailOnline can reveal that allegations of chilling cruelty and unspeakable animal suffering have been repeatedly levelled at this family business turned multimillion dollar concern.

Scroll down for video

The real cost of a $600 coat: Campaigners claim the coyotes that are trapped and skinned for their fur to trim the hoods of Canada Goose coats can be in pain for days. It is unclear whether these images are from Canada Goose trappers but the firm does use the same leg holds

The real cost of a $600 coat: Campaigners claim the coyotes that are trapped and skinned for their fur to trim the hoods of Canada Goose coats can be in pain for days. It is unclear whether these images are from Canada Goose trappers but the firm does use the same leg holds

Exhausted, alone and all out of fight, this Coyote awaits its inevitable fate having been caught in a trap by its right hind leg

Exhausted, alone and all out of fight, this Coyote awaits its inevitable fate having been caught in a trap by its right hind leg

According to animal rights activists, behind every fur trimmed hood and down stuffed coat is a brutal reality of Coyotes trapped and left to suffer in the wilderness.

Many of today's ethically aware consumers would never dream of buying a full length fur. But in an  odd quirk of the current trend for this style of garment those same shoppers pull on a coyote trimmed coat without a moment's concern for the origins of that little flurry of fur.

Lindsay Rajt, Director of Campaigns for People for the Ethical Treatment of Animals (PETA) said:  ‘Canada Goose uses exclusively Coyote fur on the trim of their coats and those animals are trapped in a way that is just inherently cruel.’

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As a company founded and grown in Canada, Canada Goose makes much of their support of North Canadian communities in which, their publicity states, Coyote trapping has been ‘a way of life for hundreds of years.’

According to a spokesperson for the firm: 'The trapping of fur-bearing animals is strictly regulated by the provincial and territorial wildlife departments in Canada.

'We purchase coyote furs from certified Canadian trappers, never from fur farms or endangered animals.

Kate Upton going 'Polar Bare' on the cover of Sports Illustrated's 2013 Swimsuit edition, wearing a smile, a white Canada Goose parka and not much else

Kate Upton going 'Polar Bare' on the cover of Sports Illustrated's 2013 Swimsuit edition, wearing a smile, a white Canada Goose parka and not much else

But PETA has dismissed the standards as ‘window dressing.’

Mr Rajt said: ‘The company’s reference to AIHTS standards is meaningless and a way of placating and silencing people with valid concerns.

‘Leg hold traps are still legal in Canada. Mother animals will chew off their limbs in order to get back to their young. The trapped animal might be there for days before the trapper comes and finds them, they are frightened and starving and in pain during that time. And then they’re bludgeoned or strangled to death or shot.’ 

A trapped Coyote howls in pain, its right forepaw held tight in the jaws of a leg hold trap - legal under the AIHTS but cruel according to PETA

A trapped Coyote howls in pain, its right forepaw held tight in the jaws of a leg hold trap - legal under the AIHTS but cruel according to PETA

Trapped Coyotes can struggle to get free for days until the hunter returns to check his traps. Mother animals separated from their young attempt to chew off their own limbs in a bid for freedom

Trapped Coyotes can struggle to get free for days until the hunter returns to check his traps. Mother animals separated from their young attempt to chew off their own limbs in a bid for freedom

Ms Rajt revealed that PETA is this week appealing to Canada Goose to abandon their use of fur in favour of synthetic alternatives and to dump their use of real down stuffing.

She said: 'PETA is reaching out to Canada Goose to urge the company to switch to innovative, synthetic fur like their top competitor Helly Hansen, which has been fur-free for many years.

'Additionally, we are asking that Canada Goose dump down and opt for revolutionary synthetic technology like the one recently developed by The North Face - Thermoball, which mimics down but offers superior versality.'

Ms Rajt claimed: ‘We have been trying to meet with this company, we’ve been trying to engage with them since 2006.

‘The CEO originally agreed to meet with us in 2008 to discuss trapping policies and methods but just never confirmed that meeting and then failed to make himself available to any of our follow ups.

'It is a challenging company for us to work with.'

Meg Ryan pictured last month in New York's West Village. Canada Goose's concerted effort to win the US market has seen it become a celebrity brand of choice

Meg Ryan pictured last month in New York's West Village. Canada Goose's concerted effort to win the US market has seen it become a celebrity brand of choice

Andrew Garfield and girlfriend Emma Stone in their Canada Goose parkas on a shopping trip in New York

Andrew Garfield and girlfriend Emma Stone in their Canada Goose parkas on a shopping trip in New York

Actress Clare Danes wearing her Canada Goose parka with its distinctive Coyote trim while braving the New York chill

Actress Clare Danes wearing her Canada Goose parka with its distinctive Coyote trim while braving the New York chill

But according to a spokesperson for the company: 'We've corresponded with PETA on numerous occasions and it quickly became evident that they were not interested in a constructive conversation.'

Canada Goose was founded in 1957 and has enjoyed remarkable success and rapid growth across the past decade when it started marketing it’s ‘truly Canadian’ ethos to Europe.


 'We've been trying to engage with this company since 2006...It is a challenging company for us to work with,'

PETA Director of Campaigns, Lindsay Rajt, on Canada Goose's refusal to meet

Today the company employs more than 1000 people and sells its products in more than 50 countries across the world.

It continues to manufacture its coats in Toronto and Winnipeg but recently opened its first US Headquarters in Denver, Colorado. Last year it became the official sponsor of the Sundance Film Festival and US Equity firm, Bain, recently bought a majority stake in the hitherto entirely Canadian enterprise. 

Real fur real suffering: Canada Goose President Dani Reese flanked by his company's distinctive outerwear. He says the company uses Coyote fur 'because it works'

Real fur real suffering: Canada Goose President Dani Reese flanked by his company's distinctive outerwear. He says the company uses Coyote fur 'because it works'

The extreme weather outerwear is manufactured in Toronto and Winnipeg though US Equity firm, Bain, now owns a majority stakehold

The extreme weather outerwear is manufactured in Toronto and Winnipeg though US Equity firm, Bain, now owns a majority stakehold

Founded in 1957 the family company Canada Goose now employs more than 1000 people and sells its garments in more than 50 countries

Founded in 1957 the family company Canada Goose now employs more than 1000 people and sells its garments in more than 50 countries

Canada Goose President Danni Reiss is very clear in his assessment of the importance of the US market to his brand. He said, ‘The States is a market with one of the greatest potentials in the world. The US is growing faster than the overall company.’

Speaking in a corporate video Mr Reiss explained: ‘We use Coyote fur for a number of reasons. Number one, Coyote fur works – it’s functional, it provides warmth around the face in a way no synthetic fabric can. It does that in the coldest places on earth and it is important to realise that sometimes urban centres and cities can feel like the coldest places on earth.’

Coyote fur doesn’t freeze, doesn’t hold moisture, retains heat and is biodegradable.

Ms Rajt dismissed the necessity of real fur saying: ‘They actually do have some faux fur trim products and there’s a market for that. There’s no reason why they couldn’t switch completely.’

A spokesperson for Canada Goose said: 'We understand PETA's concerns and we respect the right of people to choose not to wear fur, however, we know PETA does not respect our ethical, responsible use of fur so further conversation won't be productive.'

But Ms Rajt insisted: ‘I just don’t believe that half the people wearing these coats understand what’s really involved in the making of them. And I just don’t believe that they would make that same choice if it was an informed one.'

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