Canada Goose CEO Dani Reiss is photographed in the company's Toronto offices, Tuesday, July 30, 2024. THE CANADIAN PRESS/Chris Young
TORONTO – When Dani Reiss took over his family’s business, Canada Goose Holdings Inc., in 2001, it had a reputation for clothing made for those needing to brave the coldest of colds.
More than two decades later, the Toronto-based company has evolved into a luxury powerhouse selling everything from sneakers to windwear.
Next on Reiss’s radar? Eyewear and luggage.
“Those sorts of things are natural extensions and at the right time in the right place, we’ll dip our foot into those,” the chief executive told The Canadian Press on Thursday.
While Reiss said the company doesn’t have anything planned for the categories yet, his remarks offer a window into the possible future of the Canadian-brand-turned-status-symbol he helms.
Though Canada Goose’s popularity remains strong, the retail industry at large is battling several headwinds that have pushed some companies like Nordstrom to decamp the country completely and others like Indigo Books & Music Inc., Mountain Equipment Co. and Wayfair to shed staff.
Canada Goose has not been unscathed. It laid off 17 per cent of its global corporate workforce in March to put the company “in a better position for scaling.”
“This is sad news for me to share because we have individuals leaving the organization today who were instrumental in making Canada Goose the business it is today, and I am personally grateful to each and every one of them,” read a LinkedIn note the day of the layoff from Reiss, whose grandfather Sam Tick started the company then known as Metro Sportswear Ltd. in 1957.
The layoff news came after Canada Goose saw a slower start to its busy season – winter – as it took temperatures and snow longer to fall in many of its key markets.
That coincided with high inflation and interest rates that have made consumers less willing to drop cash on big-ticket items, which the company is known for.
Its parkas often exceed the $1,500 mark and a quick scan of its website shows tuques priced at $250 and puffer boots going for $695.
While many Canada Goose customers skew more affluent, Reiss acknowledges its consumer base is not unaffected by the current economic headwinds.
“Today we’re in a time where there are macro pressures on consumers,” he said.
Yet Reiss is optimistic.
“Whatever pressures may exist, I think that the strength of our brand and the size of our brand relative to the market … are greater drivers of our growth than any headwinds,” he said.
His remarks, however, came the same day as Canada Goose reported a net loss of $74 million in its first quarter, compared with a net loss a year earlier of $85 million.
Those results for the period ended June 30 amounted to a net loss attributable to shareholders of 80 cents per diluted share compared with 78 cents a year before.
The company’s revenue totalled $88.1 million over the quarter compared with $84.8 million a year prior.
The numbers pushed Canada Goose’s share price down four per cent, or 69 cents, to $15.24 in mid-morning trading on Thursday, but Reiss characterized the quarter as “really solid” and was particularly enthusiastic about the strength he feels Asia holds.
Canada Goose moved into the market six years ago and its presence there has steadily grown ever since. Its website shows it has 18 stores in Mainland China, two in Hong Kong and one each in Macau and Taipei.
“I think it’s going really well. We’ve built a strong following in China, (but) I think we have a long way to go,” Reiss said. “We’re relatively small in a very large market.”
But even that small toehold carries a lot of importance. The company’s most recent earnings showed it recorded the same amount of revenue – $21.9 million – in its home market of Canada and Greater China in its first quarter.
While the Canadian revenue was a dip from $23.5 million a year prior, the Greater China revenue was up from $19.5 million a year before.
“In Asia, we have so much white space,” Reiss said.
But that doesn’t mean there’s no more potential at home, much of it just lies in Canada Goose’s newest product categories and innovations in its sports, foot, knit and wind wear.
“That’s the growth part of our business,” Reiss said.
“Our classic products continue to grow but not as fast as our new products and that’s really important.”
This report by The Canadian Press was first published Aug. 1, 2024.
Companies in this story: (TSX:GOOS)
