Canada Goose raises China presence
Canada Goose Holdings Inc. stores in North America and Europe used to be a magnet for Chinese travellers before the pandemic brought global tourism to a halt. The company is now banking its recovery on bringing stores to them.
The Toronto-based parka maker said Tuesday it is doubling its footprint in mainland China this fiscal year by adding four stores, out of seven planned openings globally. After suffering the world’s first COVID-19 outbreak, China’s economy is now rebounding faster than North America.
“The retail recovery in mainland China is ahead of other regions,” chief executive officer Dani Reiss told analysts Tuesday. As a result, he said it’s “increasingly crucial” to serve the world’s largest market for luxury goods in their home market.
Canada Goose first announced its expansion plans in the region in 2018 and had three stores in mainland China and two in Hong Kong at the end of its fiscal year in March. Still, its exposure to the country is smaller than brands such as Moncler SPA, a competing maker of high-end ski jackets, according to Bloomberg Intelligence analyst Maxime Boucher.
“Favouring mainland China for near-term store openings could bolster a winter recovery,” Boucher said. “Two-thirds of Chinese luxury purchases were made abroad prior to the pandemic, so reaching these consumers while tourism remains heavily clipped will be key for all global brands.”
Canada Goose’s revenue for the first quarter ended June 28 fell 63 per cent to $26.1 million), hurt by a near 75 per cent decline in its wholesale unit, but beat Wall Street estimates of $18.34 million. The wholesale channel represented 74.2 per cent of sales in the second quarter last year.
Sales at its nascent direct-to-consumer business that includes online operations declined about 70 per cent.
The company’s net loss widened to $50.1 million from $29.4 million, a year earlier. Excluding items, it reported a loss of 35 cents per share, smaller than anticipated.