Canada Goose – Keep Warm, Be Cool

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\"RRLike most New Yorkers I made it through last winter’s Polar Vortex with many layers and ‘Hot Hands’ in my pockets, but going into this season, I knew I had to replace my very well worn 10-year-old Bogner and 12-year-old Moncler down jackets. I asked a friend, younger and hipper than I, what she recommended. “Canada Goose” she said, “cheaper and cooler than Moncler.” I’d never heard of Canada Goose, but, once aware, the red white and blue Canada Goose expedition patch logos were suddenly everywhere in New York City. The parkas are more function than fashion, many trimmed with coyote fur around the hood. PETA has objected, but celebrities, including Matt Damon, Daniel Craig and Claire Danes have been photographed in theirs. Last season, Canada Goose was featured in the US Magazine “Who Wore it Best” section. Was it Lucy Liu, Cameron Diaz, Maggie Gyllenhaal or Emma Stone? Kate Upton wore a white Canada Goose parka over a white bikini bottom on the cover of the 2013 Sports Illustrated Swimsuit issue. Photographed in Antarctica, the headline reads, “Kate Upton Goes Polar Bare.”

Entry level pricing for Canada Goose is about $675, and most styles are over $750 placing the brand in the high end of the market. Distribution is top tier department stores, Bloomingdale’s, Nordstrom, Neiman’s, Saks; specialty stores, including both upscale fashion boutiques like Intermix and activewear outlets like Paragon; and online at Amazon and various other web sites. When I started shopping, I found that many stores were sold out. “They’re hard to get,” one young woman told me.

Bloomingdale’s is on its third reorder. “We were able to secure a large amount of replenishment stock from them this year,” a Bloomie’s executive confided. Bergdorf, sold out of all but a few size large styles, is expecting a reorder, “but, we don’t know what we will get when it comes,” a sales associate said, adding, “I’ve never seen anything like it.”

Bain Capital bought a majority stake in Canada Goose last December. Bain’s investment closed just ahead of the Italian luxury brand Moncler’s IPO, the most successful in Europe last year; the stock advanced 47% in its first day of trading raising over $1 billion and enriching its private equity investor, The Carlyle Group.

Metro Sportswear, the precursor to Canada Goose, was a Canadian firm founded in 1957 by Sam Tick, a Polish immigrant who had worked as a cutter in other firms. Tick’s son-in-law, David Reiss, purchased the firm from his father-in- law in the early 80s and built it into a supplier of heavy-duty down-filled coats. The company has a heritage in cold weather gear; in 1982, Reiss collaborated with Laurie Skreslet, the first Canadian to summit Everest, making the down jackets for the successful expedition. By the 1990s, the firm was primarily a private label manufacturer of down-filled clothing for brands like Eddie Bauer. Dani Reiss, grandson of the founder, joined the firm in 1997 after graduating from college in Toronto with a degree in English, hoping to become a writer. It is Dani, CEO of the company since 2001, who created the brand’s Canadian cold weather narrative. After travelling in Europe where Canada Goose had some popularity, Reiss realized that customers associated the brand with pristine images of Canada and there was a deep and positive emotional response to be mined there. “My whole life was like a focus group,” Dani told an interviewer, “the customer’s experience of owning one of these jackets was like trying on a piece of Canada.” Correctly, Dani realized that this image was authentic and had real value. He made a critical and bold decision to keep all manufacturing in Canada instead of seeking less expensive Asian suppliers. “We stay in Canada because that’s who we are,” the company’s web site proclaims.

To maintain authenticity for its core benefit, warmth, and its Canadian heritage, Canada Goose has developed a crafty marketing approach. The company supports Polar Bears International and the Conservation Alliance in Canada. Through its Canada Goose Resource Centers, established in 2009, the company provides excess materials — fabric, zippers and fasteners, to Inuits across the Arctic so they can continue the tradition of making clothing for their cold climate communities.

Then there are the Goosepeople. Not the Asian tourists on Fifth Avenue who gobble up the brand, or hipsters sporting their jackets in line outside of nightclubs — an early Canada Goose marketing tactic was to provide jackets to security workers at sports and concert arenas. Goosepeople are authentic outdoor adventurers and other inspirational folk who wear the clothing purposefully. Canada Goose sponsors Lance Mackey, a cancer survivor and four-time winner of both the Iditarod and the Yukon Quest. Kevin Spreekmeester, an outdoor photographer, replete with a north-country accent, discovered the brand while on assignment. Now Canada Goose’s CMO, Spreekmeester says, “When a Gooseperson succeeds, so do we.”

I asked consumers if they’d heard of Canada Goose and what they thought of it. Many had never heard of the brand and some confused it with Grey Goose vodka, “I’ve heard of it, but I don’t drink vodka” said a Manhattan woman. But, those who own it have become fans and advocates, “as an owner of the coat, I am a huge fan and have sung its praises to all of my friends. It’s what got me through last year’s brutal winter.” A transplanted French banker told me “my friends said this is what I had to have when I came to New York,” adding, “the brand is very big in Paris and London.”

The consumers I spoke with loved their coats for their warmth, the company’s singular benefit. “Freeing people from the cold,” is one of the company’s mantras as is their commitment to “producing the best extreme weather outerwear in the world.” Canada Goose is standard issue attire for the United States Antarctic Program.

Right now, demand for Canada Goose exceeds supply. Sales are reported to be about $200 million, somewhat minimal by big brand standards these days, a 4000% increase over the last decade. The company is targeting the US and Asia for growth, fairly low hanging fruit, but before the infusion of capital from Bain’s investment, it was likely easier said than done.

Canada Goose opened its US headquarters in Denver at the end of May 2014 and just opened a New York sales office and showroom in early December in Chelsea’s iconic Starrett Lehigh building. The addition of a new manager of its wholesale division (with plenty of US experience) and doubling of its Canadian manufacturing facilities should help the company fulfill orders, although the allure of “not being able to get it,” seems to be enhancing the desirability of the brand.

Certainly there are many other growth options including line and product extensions and opening its own stores. Luxury competitor Moncler now has seven US stores including one recently opened in Hawaii. Go figure! But, growth must be managed wisely and well. It will be key to maintain the brand character and integrity as well as the inspired marketing that has made Canada Goose iconic.

Consumers can be loyal and they can be fickle. The fact that this jacket is actually warmer than others is its primary asset – and a distinct and singular product benefit, although its current celebrity-wearing cachet, which too has been carefully built, should not be overlooked. And cold winters help. Of course we don’t know about the Polar Vortex. Was last winter a fluke? Global warming is a reality, just look at those poor polar bears whose ice caps are melting. Still I’m not taking any chances. I’m definitely going to buy a Canada Goose jacket this year. As soon as I can find one in my size.



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