Canada Goose’s CEO Doesn’t Sweat Warm Winters
Canada Goose’s initial public offering in New York City was ideally timed in terms of weather. There was a chill in the air and snow on the ground in downtown Manhattan ahead of the bell ringing at the New York Stock Exchange. If the expensive outwear seller had gone public just a month earlier, it may have found itself trying to sell Wall Street on cold-weather gear with temperatures hovering near an unseasonable-warm 70 degrees.
While many retailers and apparel makers love to complain about weather when sales trends lag, parka seller Canada Goose says it isn’t a concern.
“Weather these days is more unpredictable than it has ever been, which I don’t think is a negative thing for our company,” President and CEO Dani Reiss said in an interview with Fortune. “Changes to weather patterns haven’t impacted our sales. It isn’t something that we are worried about.”
Reiss couldn’t help but enjoy the fact that when Canada Goose went public in New York, the weather was perfect. The IPO came just a few days after the season’s biggest snowstorm. He added that weather isn’t a motivating factor when it comes to consumers considering the Canada Goose brand. Instead, he believes people buy the company’s goods because they are “best in class product, something people aspire to own and lasts for a long time—that’s very important.”
With just $290.8 million in annual sales and over two-thirds of the business derived from just the Canada and United States markets, Canada Goose has a long runway to fly. It can count on expanded distribution and access to new markets to power growth in the upcoming years. Part of that can also come from Canada Goose’s brick-and-mortar retail store openings. The company has flagships in Toronto and New York City—both cities where it listed shares on Thursday. Longer term, it wants to open 15 to 20 additional locations in major cities through 2020.
But one area of risk: Canada Goose’s high exposure to the cold weather months at a time when chilly weather can’t always be counted on. The company books about three quarters of revenue and earnings in the fiscal second and third quarters, when orders are booked ahead of the holiday and winter seasons.
That’s because many jackets are like the $900 Kensington parka, which is ideal for temperatures ranging between -5 through 15 degrees Fahrenheit. While Canada Goose jackets have become fashionable statement pieces, they were initially popular with scientists and film crew folks that spent hours in extreme colds. It could be a harder sell to convince consumers to buy an expensive cold-weather jacket when the season doesn’t call for it.
Canada Goose sees an opportunity to take the brand even further beyond parkas. Two decades ago, the company had just 20 styles. Today? Over 200, says Reiss. “We’ve extended from the traditional parka to different fits and environments,” he said, pointing to some lighter weight jackets that make up the spring collection. But don’t count on seeing Canada Goose-branded beach gear any time soon.
“We aren’t going to make flip flops or bathing suits,” Reiss said. “There are opportunities to extend but we have to make sure that what we make is a Canada Goose product. In terms of a multi-seasonal brand, beachwear is out of the question.”