There’s more than enough chaos to go around — from COVID-19 to the sinking economy to the coast-to-coast protests in the U.S. decrying institutionalized racism that sometimes turned into looting.
To get Canada Goose Holdings Inc. through it, president and chief executive officer Dani Reiss is focusing on the things he knows for sure.
“We’re living at a time where there’s so many different things happening at the same time,” Reiss told WWD in an exclusive interview after the company reported solid annual results, but said first-quarter sales would be “negligible.” “There’s so many unknowns. It’s a crazy time. The best way to live in a time like this, especially from a business point of view, is to focus on the things that we do know.”
At Canada Goose, the known factors are “very compelling,” said Reiss, adding, “I’m up for the challenge.”
The knowns that Reiss has identified now and is basing his thinking off of include:
- The first quarter is likely to be the most heavily impacted by the COVID-19 shutdown.
- Canada Goose came into the crisis with “the financial strength to weather the storm” and with a “strong balance sheet.”
- That the parka-maker’s products are “best in class, authentic and they work.”
- That e-commerce is going to be more important than ever and that the company’s direct-to-consumer channel is based on an e-commerce first strategy.
At the same time, there are also more than the usual number of variables for Canada Goose — and the rest of the fashion industry.
“It’s just an impossible time to speculate exactly what the recovery will look like, when it will happen, what shape it will be,” the ceo said.
In the midst of it all, Reiss sees brands stepping up into key roles that were traditionally played by government and taking a much more active role in society.
Reiss said some Canada Goose stores sustained damage during the looting that followed largely peaceful Black Lives Matter protests in the wake of George Floyd’s death in Minneapolis at the hands of police.
“At the end of the day, all that stuff can be fixed and will be fixed,” Reiss said.
He is looking ahead to a brighter day and a bigger role for brands.
“This is a conversation about what the future of retail looks like,” Reiss said. “The future is going to be dominated by real brands that stand up for real change and for a better future.”
The company has made donations to civil liberties groups and, Reiss said, is “taking a deep look at our own business and own culture.”
Along with that Canada Goose is continuing to push hard in the area of sustainability.
“We know that the apparel business has to change,” said Reiss, adding he wants to look back in 20 years and see that Canada Goose was one of the companies leading that change.
During the COVID-19 crisis, the Made in Canada brand has pivoted to making personal protective equipment and is currently churning out 100,000 units a week.
“The narrative of society and the change in society that used to be driven by government is now being driven by business,” he said. “People are relying on business to do that and people are voting with their dollars. Brands have to stand up and become political, they have to lead the conversation…helping society march forward in the right direction. Companies have an obligation to society.”
Canada Goose also has shareholders, but right now they’ll have to exercise some patience.
For the fourth quarter ended March 29 — shortly after the coronavirus sent millions home on lockdown — revenues fell 9.8 percent to 140.9 million Canadian dollars and net income fell 72 percent to 2.5 million Canadian dollars.
The full-year results showed how Canada Goose came into the crisis in a relatively strong position. Sales were up 15.4 percent to 958.1 million Canadian dollars and net income gained 5.6 percent to 151.7 million Canadian dollars.
Canada Goose expects only “negligible” revenues for the first quarter, which last year represented only 7.4 percent of annual sales.
Fifteen of the company’s 20 stand-alone stores were temporarily closed throughout the first seven weeks of the quarter and the two Hong Kong stores that were open were hit by restrictions on inbound tourism.
Like almost every other company faced with the COVID-19 shutdown, Canada Goose did some serious belt tightening, cutting first-quarter cash expenditures by 90 million Canadian dollars.
As part of those cuts, Reiss is foregoing his salary indefinitely, and the company’s stores and down-filled jacket manufacturing has been temporarily closed. The company has also eliminated its typically large seasonal inventory investments and reduced investments in its retail and manufacturing expansion.