Canada Goose’s chief executive Dani Reiss is in no rush to launch the company’s highly-anticipated footwear line.
It was during this time last year that the parka maker announced it had acquired Baffin, a Canadian outdoor and industrial footwear firm, for $32.4 million with the intention of launching a Canada Goose-branded line of products. At the time, Reiss called it “a dream acquisition.”
But don’t expect to be able to try on Canada Goose winter boots anytime soon.
“It’s definitely not next year but probably before five years from now. Somewhere between the two,” Reiss said in a wide-ranging interview with Yahoo Finance Canada last month.
“We have to make sure we get it right, and we’re prepared to wait another year if we have to and make sure the product that we put out is the best product out there. We’re not holding ourselves to specific timelines, but we are working extremely diligently on it. It’s a focus-point for us for sure.”
Reiss is not the type of chief executive to rush into a product launch for the sake of pleasing investors – but, then again, Reiss is not like most conventional CEOs. He somewhat reluctantly took over the family parka business in 2001, and has since managed to craft the company into a sought-after luxury brand worn by both Arctic scientists and celebrities on movie sets. Along the way, he orchestrated a successful initial public offering in a retail environment where many brands have struggled to adapt to changing trends and e-commerce.
Canada Goose has gradually expanded into new clothing categories, including knitwear, lightweight jackets and accessories, as it looks to diversify its revenue. Footwear is the next major step for the company, and one Reiss says fits well with the existing brand.
Reiss has been meticulous when it comes to launching new products, and he isn’t afraid to go back to the drawing board if he isn’t satisfied with what has been developed.
Carrie Baker, the company’s executive vice president and Reiss’ chief of staff, says that the first iteration of Canada Goose’s knitwear line was actually scrapped four years ago, in part because it didn’t meet Reiss’ high standards.
“It was good, it just wasn’t the best,” Baker told Yahoo Finance Canada.
“That was a hard choice. Our development cycle is long and you had a really invested design and merchandise team and an excited sales force. To make the decision to pull it and regroup and rethink was hard, but it was the right choice.”
The company ended up launching its first knitwear collection two years later, which Baker says wouldn’t have been as successful as it is today if the process hadn’t been stalled four years ago.
“When we did it two years later it made sense. It was a much better product, we understood our audience better, we understood how to bring it to market better,” she said.
“Dani is so strong around his communication about only making products that are the best. If it’s not the best, it doesn’t belong with our logo, it doesn’t belong in our stores, it doesn’t belong with our retailers.”
But footwear is just one part of Reiss’ plan for the brand, which has shifted focus from exclusively wholesale to direct-to-consumer. The retailer has launched several branded stores across the country and abroad and expects to open five in China by the end of the year.
Reiss said the store openings in China – a launch that was, again, in the works for years – have been successful, despite occurring in the midst of what has proven to be a tumultuous time for diplomatic relations between Canada and China. Reiss says those issues are largely limited to the political world.
“The facts are our business continued to perform. So we’ll leave the politics to the politicians and continue to focus on our business. It’s worked pretty well for us,” Reiss said.
“The Canadian brand is very strong. Canada and China have a deep and longstanding relationship and we hope that any political issues resolve themselves.”
Despite expansion into China and the company’s success since going public in 2017, some investors still have concerns about how much growth potential there is for such a high-end, luxury brand.
Shares of Canada Goose fell under pressure earlier this year after the company forecast slower sales growth, but the stock has since recovered and is relatively flat year-to-date.
RBC Capital Markets analysts Kate Fitzsimons and Sabahat Khan wrote in a note to clients that a consistent question they hear from investors is “How many $1,000 coats can they sell?” Still, the analysts said they see ongoing market share opportunity in the luxury outwear market.
“Further, with just 12 stores as of [the first quarter of 2020], we see ongoing unit opportunity towards at least 30 to 50 boxes over time, particularly in China with just five stores in that market estimated by year-end,” Fitzsimons and Khan wrote.
“Additionally, we see gains in knitwear, springwear, lighter-weight down and footwear in the coming years as ongoing opportunity as Canada Goose evolves into a three-season brand.”
For Reiss, he’s comfortable with taking the time to launch stores and produce innovative products that are not about “chasing trends.” As Baker said, “he’s just not a typical CEO.”
“Our products are classics... but at the same time, we’re going to continue to innovate and continue to create new stuff,” Reiss said.
“It’s about the alchemy between old and new, being able to find the right balance between classic styles and being innovative and on the cutting edge.”