Case study: Canada Goose

Apologies folks, I’ve been a bit slack. I’m away as well busy so blog activity has not been good. Will be trying to rectify it somewhat over the coming weeks hopefully.

I came across something worth discussing yesterday, the luxury brand Canada Goose went public yesterday. The company managed to raise $255 million with their shares ending the first day of trading 25% over the IPO price.

The money involved is some way off from what Snap achieved a few weeks back (Canada Goose is ‘only’ valued at $1.72 billion), but it’s still the second biggest of the year. And guess what? The company is profitable!!! Gross profit last year was $146 million. Suck on that Snap!

For those unaware of the brand, they are known for making expensive winter jackets/parkas. By expensive think above $900. And like any aspiring high end brand, they’ve had some good publicity with celebrities seen wearing their coats with the famous arctic circle logo. I remember when I first saw the jackets a few years ago, it must be a chavy brand with so many people wearing them. Then I realised there were a lot of fakes around.

Maybe thats when you know a company has ‘made it’, when the fakers go after you…

The company is a great example of how to grow a luxury brand. It’s got a story (also made in Canada and not in Asia), It maintains real tight supply on their jackets and it sells direct to customers via their own web store. They’ve managed to combine being a bit traditional along with more modern selling methods.

The company has it’s controversies, they trap kill coyotes for the fur which animal rights groups are against. It hasn’t hindered their success however, and if you do not want a fur coat don’t buy one is kind of their message.

That aside, I think the company has a lot going for it. It can expand it’s range into different seasons, can further expand into wider markets which it has yet to do fully and lastly it seems the brand has been managed well to maintain it being ‘exclusive’ and not diluted. Finally in a world of tech over inflation, Canada Goose is actually making money and the valuation is probably fair based on their numbers. I reckon it’s a good example for any readers out there that go into clothing or selling to consumers in general.

Let me know if you have one of their jackets (too rich for my blood) and if they live up to the hype. Also if you have a startup that relies on a few key things to grow in retail!

J

 

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