Dani Reiss sees Canada Goose as a lifestyle play — and with a growing knit and apparel business and footwear set to launch this fall, the vision is taking flight.
“Lightweight down, which was our first real product extension, is now over 20 percent of our business,” said Reiss, who is president and chief executive officer, in an interview with WWD on Wednesday.
“Our apparel business is expected to exceed 45 million [Canadian] dollars in this fiscal year,” he said. “It’s primarily knitwear — we launched that only four years ago. I’m very pleased to be able to grow a business from zero to 45 million [Canadian] dollars in a category that we’ve never been in before. That demonstrates our ability to get into new categories. That right there shows we are a lifestyle brand.
“It’s a big challenge,” he said. “I love big challenges and have always been up to them.”
The company, which reported growing fiscal first-quarter sales momentum along with the expected summertime losses, is still seen primarily as a parka-maker, a luxury outerwear pioneer with a certain obsessiveness about making the warmest jackets (soon completely without fur).
But Canada Goose has been stretching out, expanding into China with three stores and three more coming soon. And the aperture on the brand will get a little wider with footwear this fall.
Canada Goose bought footwear-maker Baffin in late 2018 and has been steadily building up to the new category.
“Most brands are one or the other and we are actually both,” Reiss crowed. “We’ve cut no corners in creating the ultimate footwear.
“As long as we maintain our Canada Goose DNA and as long as we maintain our function-first mentality and it also has the right aesthetic, then we will be successful in these categories,” the CEO said. “What’s important about us is that, from Day One, it’s been very important to me that we’re a pure brand, meaning undiluted. And it’s very important to me that as we add categories, we continue to remain undiluted.”
That methodical approach to brand has helped Canada Goose weather the pandemic and build in e-commerce.
Revenues increased 116 percent to 56.3 million Canadian dollars from 26.1 million Canadian dollars a year ago, when the first rush of pandemic lockdowns kept consumers home.
Losses for the quarter — which ended June 27 and is typically a slower time for the parka-maker — expanded to 58.4 million Canadian dollars from 48.1 million Canadian dollars reflecting increased marketing and strategic spending, higher performance-based compensation and unfavorable currency changes.
Canada Goose’s own direct-to-consumer sales tallied 29.4 million Canadian dollars while wholesale revenue totaled 25.8 million Canadian dollars. The company’s own global e-commerce revenues increased by 80.8 percent. The company’s direct-to-consumer operating losses narrowed while the wholesale business posted a modest operating income.
Reiss painted the pandemic as something of a stress test for the company.
“In the last year, we’ve proven our model is strong,” he said. “No matter what happens, we’re set up to capture demand. This quarter is a really great leading indicator of what this company can do.”
Investors were a little more wary, sending shares of Canada Goose down 12.9 percent to $38.71 after the company did not revise its outlook for the year up following a strong quarter.
On a conference call, chief financial officer Jonathan Sinclair pointed analysts two two changes at the company.
“It’s clear that we are much more [direct-to-consumer]-centric today,” he said. “We expect the channel to approach 70 percent of our revenues this year. And I think that naturally puts a lot more revenue into the third quarter and fourth quarter when consumer buying is at its peak. Last year, 89 percent of our annual d-to-c revenues were in the second half of the year. Now in parallel to that, as you know, we’ve also resized and refocused our wholesale business, and that’s much more weighted to the second quarter.”
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