Dani Reiss likes doing things the hard way — and it shows at Canada Goose Holdings Inc., which posted better than 30 percent revenue growth in the second quarter and boosted its outlook for the year.
The president and chief executive officer is getting into footwear, not through a relatively quick and easy license, but by buying the cold-weather specialist Baffin and learning the business from the ground up. Likewise, the brand is not just selling its Canadian-made jackets in China, but working to build a real organization there with infrastructure to drive the business forward on a local level.
Nothing in that approach is new to Reiss, who joined his family’s Toronto business in 1997 and helped keep its domestic manufacturing base despite higher costs and ultimately found fertile soil for a new category — luxury winter jackets — in Europe.
Now the business is a global enterprise.
In an interview with WWD on Wednesday after reporting quarterly results, Reiss said the company has plenty more room to expand — both in terms of geographic markets and new product categories.
“We have so many vectors of growth,” Reiss said. “Our responsibility is to make sure we management them.”
And that means staying focused on product and the company’s core.
“We’re a function first company,” the ceo said. “We aren’t a fashion brand, we’re function-first all the time. We are the Land Rover of clothing.” And while he noted a Land Rover could be given luxury appointments, like leather seats, it is at its core still made to handle harsh conditions.
That’s the thinking that’s going to steer the company’s move into footwear, which started earlier this month when it bought Baffin for 32.5 million Canadian dollars.
“Baffin makes the best cold-weather footwear in the world, in my opinion,” said Reiss, calling president Paul Hubner, who will continue to lead the business, an “insulated footwear mastermind.”
Baffin, which sells through different channels than Canada Goose, will be operated separately and instead serve as something like a master tutor in footwear.
“We’re going to leverage their experience in constructing the best footwear in the world and use that as a platform to build Canada Goose footwear and sell it through our own channels,” Reiss said. “It’s very difficult to get into footwear, it’s a completely different business.”
But he said it was important for the company to take on the category itself.
“We just don’t want a pair of boots that don’t work with our logo on it, we want best-in-class production,” Reiss said. “Out footwear is going to function.”
That’s in keeping with the brand’s parkas, which are known for their warmth. The company recently added cold rooms to some of its stores, which can bring the temperature down to minus-17 degrees Fahrenheit. “It’s the real deal,” Reiss said. “It’s cold and you need one of our jackets in there.”
It’s not clear whether investors truly appreciate the brand’s purity and its focus on function, but they like its growth and sent shares of the firm up 9.8 percent to close at $64.32 in trading Wednesday after a strong quarter of growth.
Canada Goose’s comprehensive profits rose 35.8 percent to 52 million Canadian dollars in the second quarter as revenues increased 33.7 percent to 230.3 million Canadian dollars.
Most of the company’s sales still come from its wholesale operations, which saw an increase of 18.3 percent to 179.9 million Canadian dollars as retailers spent more and bought earlier.
But it’s the smaller direct-to-consumer channel that’s showing the fastest growth, expanding by nearly 150 percent to 50.4 million Canadian dollars.
That growth helped prompt the company to boost its outlook for the year. It is now projecting revenue growth of at least 30 percent, up from the 20-plus percent previously forecast. Adjusted net income per share is slated to grow by at least 40 percent, up from the 25-plus percent the company had penciled in.