May 26, 2017

GOOS - Western Europe Leads Positive Feedback on Winter Jacket Demand

By Elizabeth Blumberg
Buyer and store manager response to Canada Goose in North America and Western Europe was upbeat, particularly on demand and outlook for its down winter coats, and sources noted the brand's business is concentrated in cold-weather months.

Western European Buyers Mostly Positive on Canada Goose
Feedback from Western European buyers on Canada Goose Holdings Inc. was upbeat, especially in relation to the brand’s winter jackets. Sources noted brand recognition had grown and lauded it for improved offerings and, in France, popularity among Chinese tourists. Sentiment on the brand was positive during 1Q17, boosted by favorable weather. “We sold vast amounts [of Canada Goose] over Christmas, and that momentum carried on in January and probably until March. We only stock coats, and the parka is by far is the most popular,” said a U.K. buyer.

European buyers also gave positive feedback on Canada Goose orders for fall and holiday delivery, and a French source pointed out the brand had made some smart adjustments to fall offerings. “Collections are even trendier for the young audience it targets, but it also introduced new products more for an older woman, like longer lengths, a smaller logo, and colors like eggplant.”

Demand for Canada Goose products was strong enough that three sources said its fall shipments would include price increases. “[Canada Goose] is raising prices on some items, around 20-50 euros on a garment priced at 750 euros [$840],” said a French source, who cautioned, “It can still increase some styles for tourist purchases, but if it wants to keep the locals it should not increase further.”

While feedback on the brand’s winter offerings was largely positive, several sources said they weren’t sold on Canada Goose’s spring and summer offerings. “We are not so convinced about the non-winter items, so we did not increase our orders,” said a German buyer. One U.K. buyer expressed concern around the brand having a faddish quality. “Orders are flat at the moment, but we haven't finalized the order yet. I think it might be fading out already. I mean, it's just coats, there's not much to build on. Once you buy one, then what? Especially when you're talking over £800 [$1,036] for a coat. Besides, we don't always have cold winters. It is difficult when you don't get the cold and snow to sell such a big winter coat,” said the source. 

Addressing Canada Goose’s support of its brand through marketing, several buyers said its growing name recognition was driven by the consumer, not the company. “Sales and sales growth [for Canada Goose] rely not so much on marketing, but word of mouth or people finding out about the brand themselves,” said a German source.  

All European sources said they bought Canada Goose directly from the company, and none reported any issues. Some sources said selective distribution helps the exclusive image of the brand, but two French sources felt lead times on orders were excessive and were also put off by the brand's inability to restock popular items. 

North America Somewhat Hindered by Mild Winter Trends
Like Western European sources, three North American buyers were also upbeat on sales and order trends for Canada Goose’s winter jackets. Buyers said the jackets occupy a niche in the marketplace and had been in high demand, driven in part by word-of-mouth promotion that’s been aided by social media. “It does really well. It sells well and at full price. It's not just the [Canada Goose] patch; the quality of the product is very good. It's been there for a long time,” said a Canadian buyer. All three buyers agreed that currently the winter jackets are the brand's driver, and none had plans to carry Canada Goose's lightweight jackets. 

In contrast to European results, North American sources said mild winters made them feel less upbeat about the entire outerwear category. "Our orders for next winter are flat to higher. I don't see it getting any less right now, but I'm not sure we'll see growth due to mild winters," said a source. 

No Clear-Cut Competitors
Western European sources listed a wide array of Canada Goose competitors but often conceded that because of Canada Goose's higher price point combined with its emphasis on performance, there was no brand it was facing head to head. Brands mentioned in Europe included Moncler S.p.A, Sportswear Co. S.p.A's Stone Island, Skis Rossignol S.A., Schott AG, Woolrich Inc., Duvetica Industrie S.p.A., VF Corp.'s Napapijri and Amer Sports Oyj's Salomon. A North American source said Canada Goose potentially could take share from high-end, niche ski brands, listing Amer Sports' Arc'teryx Equipment Inc. as an example. 

European Buyers

“I buy for women, and sales are strong; I know the same goes for the men's range as well.” France

"Products sold very well, in particular some styles like the Chateau parka. Colder temperatures also fueled sales." France

“They are gaining, taking shares mainly from Napapijri and to some extent from Moncler.” France

“Chinese customers are back in France and up versus last year. [Canada Goose] also added some new silhouettes targeted to Asian customers and they have been a big hit.” France

“Canada Goose has handled its own distribution for the past two years, and it does a good job. However, it requires very early orders, and at times, it’s very tricky to commit that far in advance. Also, it’s not equipped to restock, and when that happened last year, we lost sales.” France

“I am not sure how much potential for growth there is. We have to see what will be done to increase brand awareness.” Germany

“I don't know if it can grow -- not unless they invest in a broader collection here.” United Kingdom

North American Buyers
“We carry the full line, but 99 percent of our sales of Canada Goose are the down jackets.”

"I would consider the lightweight jackets. I guess maybe I should have for this year, but it didn't even cross my mind."

“Canada Goose and Moncler have a very different customer base. The Moncler customer is more concerned with the luxury aspect. Canada Goose has more customers who are concerned with function."

“It does really well. It sells well and at full price.”

North American Department Store Managers
“Most of our sales of Canada Goose and Moncler are to tourists because the image of those brands is much higher where they are coming from. I don't think Canada Goose is a brand that most people here even know.”

"I think when we start getting in fall jackets we are going to carry some of the lighter jackets, but not during spring and summer."

“In spring, [Canada Goose’s] main competition is Hunter [Boot Ltd.] rain jackets.”

Contributors: Pascal Benazet, Enrico Gualandi, Karsten Knothe and Michelle Noble

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