Canada Goose will open two new flagship stores this fall and further push the company’s e-commerce channel into new foreign markets, moves meant to propel the luxury parka seller’s brand to new heights.
On Thursday, Canada Goose (GOOS) announced it will open flagships in London and Chicago, increasing the number of retail stores to four as the apparel maker last year opened locations in Toronto and New York City. It will also expand the e-commerce channel to seven new colder-weather markets: Germany, Sweden, Netherlands, Ireland, Belgium, Luxembourg, and Austria. The London store is notable because it will be the company’s first retail store in Europe and also the brand’s largest retail space.
Canada Goose—which only plans to open between 15 to 20 stores through 2020—says there is an advantage to slowly rolling out brick-and-mortar stores. It can be selective about which markets to target and also target prestigious real estate. The London store, for example, is opening on popular shopping destination Regent Street. Chicago’s location is on Magnificent Mile, the city’s largest shopping district.
“We have an opportunity to cherry pick the best locations and build world class, experiential stores in those areas,” Canada Goose President and CEO Dani Reiss told Coins2Day.
Throughout most of the brand’s 60 year history, Canada Goose relied on a wholesale model for selling expensive winter outwear. It only first started to tackle the direct-to-consumer model when opening an e-commerce site in Canada. While Canada Goose has generated a lot of buzz because of the brand’s popularity with celebrities and athletes, it isn’t known too well outside of the Canadian home market. Brand awareness in Canada is 76% vs just 16% in the United States. There’s a long potential runway for the luxury brand to expand if it executes successfully on convincing consumers to spend $900 on parkas.
International expansion can be tricky. Take the example of another Canadian export, luxury athleisure apparel brand Kit & Ace. The company, founded by the family that also started Lululemon Athletica (LULU), recently closed all stores it opened outside of Canada after a rapid brick-and-mortar expansion proved to be too aggressive.
But conversely, it is important for stylish, athletic-focused brands to open their own stores at a time when retail traffic to department stores has softened. Nike (NKE) and Adidas (ADDYY) have both increased efforts to sell more via direct-to-consumer channels to have a firmer control on how their gear is presented and sold to their target audience.
Canada Goose says the wholesale channel remains critical and lauds the relationship it has with those partners, but the company wants to also cultivate its own relationship with potential shoppers. “Our direct-to-consumer sales are important because it allows us to have a direct relationship with consumers and control our own destiny,” Reiss said. “And it has been really successful.”
Canada Goose, which launched an initial public offering in March, generates $290.8 million annually but roughly two-thirds of sales are derived from Canada and the U.S. It books revenue in every major Western European market and also in Asian markets, most notably Japan and South Korea. But Canada Goose has said it hasn’t fully extended the wholesale market abroad and is only recently started to test shop-in-shop potential in Europe. If the brand sees strong sales from the e-commerce and wholesale in Europe and additional markets in North America, those cities could see a new store opening in the years to come. France, Germany, and Scandinavian markets look particularly alluring for further physical store expansion.
