High-end parka maker Canada Goose sees shares plucked amid in­ter­na­tional in­ci­dent

China Daily (Canada) - - ACROSS AMERICA -

Canada Goose coats, which have en­joyed strato­spheric sales around the world, got a les­son in the harsh re­al­i­ties of global mar­kets af­ter Chi­nese ne­ti­zens re­cently called for a boy­cott of the pro­ducer of pricey parkas.

The stock of Canada Goose Hold­ings Inc, which has done busi­ness out of Toronto since 1957, ab­sorbed a 22 per­cent fleec­ing in the past two weeks, prob­a­bly be­cause the coats are quite pop­u­lar with Chi­nese.

Shares fell an­other 6.4 per­cent on Wed­nes­day in New York Stock Ex­change trad­ing, drop­ping $3.35 to $48.75.

The open­ing of a new flag­ship store in the San­l­i­tun sec­tion of Bei­jing’s stylish Chaoyang Dis­trict was de­layed last Satur­day, with a sign on the door at­tribut­ing the nonopen­ing to con­struc­tion.

Maybe that was the rea­son, and if you be­lieve that, I have a Great Wall to sell you.

This is about econ­omy of scale. If your prod­ucts are pop­u­lar in a coun­try with 1.4 bil­lion people, and there are calls for a boy­cott, well, do the math.

Canada Goose is col­lat­eral dam­age to the po­lit­i­cal ten­sion re­sult­ing from the ar­rest at the be­hest of the US of Huawei CFO Meng Wanzhou at the Van­cou­ver air­port on Dec 1. She was de­tained by Cana­dian au­thor­i­ties for 10 days be­fore be­ing granted bail.

The fact that Canada is the first word in Canada Goose’s name makes it an easy mark for Chi­nese con­sumers, many of whom have as­serted their as­pi­ra­tional spend­ing power by pur­chas­ing the win­ter wear.

Credit Suisse sees the con­tro­versy as short-lived, say­ing that it does not over­ride the long-term op­por­tu­nity for the com­pany, ma­jor­ity owned by Bain Cap­i­tal, a Bos­ton­based pri­vate eq­uity firm, nor does it dis­count the high de­mand vis­i­ble dur­ing store checks in China.

Canada Goose had not replied to a re­quest for com­ment by press time.

The com­pany’s trendy coats can be seen across the streets and sub­ways of New York and are prob­a­bly as much an of­fi­cial state­ment of af­flu­ence as they are used to keep warm.

While I don’t own one of the fash­ion­able parkas with the of­fi­cial-look­ing arm patch, I al­ways won­dered why people fork over around $1,000 for one of them. (The Snow Mantra parka on the web­site will run you US$1,550. Even the beanie caps are north of $100.)

But they are fine-look­ing and well-made prod­ucts, and if the mar­ket is there for them, then good for Canada Goose.

De­mand, how­ever, is also sub­ject to the va­garies of geopol­i­tics.

Chen Wei­hua, China Daily’s EU bu­reau chief and the owner of a Canada Goose parka that served him well on a trip to Alaska, said that “while people have the right to ex­press their anger by boy­cotting Canada Goose or other Cana­dian goods, I am not in fa­vor of such a boy­cott. This should be dealt with through diplo­matic chan­nels be­tween China, Canada and the US.

“But I do plan to buy a Huawei cell phone next time to show my sup­port,” Chen said.

It’s not the first con­tro­versy for Canada Goose, which has faced protests from an­i­mal rights ac­tivists for its use of down feath­ers, wool and fur. And be­cause the coats are so de­sir­able, coun­ter­feit­ers have cre­ated some headaches.

The com­pany’s jack­ets of­ten con­tain down from Hut­terite farm­ers in ru­ral Canada. Some of the coats also have coy­ote fur trim on the hoods, which some ac­tivists op­pose be­cause of the use of leg-hold and other traps to ob­tain it.

“Our stan­dards for the sourc­ing and use of fur, down and wool re­flect our com­mit­ment that ma­te­ri­als are sourced from an­i­mals that are not sub­ject to will­ful mis­treat­ment or un­due harm,” the Canada Goose web­site says.

In 2010, People for the Eth­i­cal Treat­ment of An­i­mals crit­i­cized Justin Trudeau (be­fore he was prime min­is­ter) and his fam­ily for wear­ing Canada Goose prod­ucts in a Christ­mas photo. Then there is the issue of coun­ter­feit­ing. “Made il­le­gally in fac­to­ries in Asia, the fake jack­ets are found on many rogue web­sites as well as in the flea mar­kets of Shang­hai, Bei­jing and Bangkok,” the com­pany an­nounces on its web­site. “Key iden­ti­fiers are poor de­tails in the em­broi­dery along with colour vari­a­tions in the stitch­ing and/ or er­rors in the shapes of the maple leaves within our Arc­tic Disc. Amaz­ingly, ‘Canada’ and ‘Arc­tic’ are some­times spelled in­cor­rect.”

Maybe the frost in Sino-Cana­dian re­la­tions will thaw, and for Canada Goose, it would be bet­ter if that hap­pened as win­ter ap­proaches.

Con­tact the writer at williamhen­[email protected] chi­nadai­lyusa.com

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