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Will the poor sales of Canadian geese disappear the charm of layoffs?

王俊杰2017
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Canadian down jacket brand Canada Goose recently announced a 17% layoff, mainly targeting office employees, but did not disclose the specific number of layoffs. After the announcement of the layoff plan, the stock price of Canada Goose fell 3%. In the past 12 months, the stock price has cumulatively fallen by 12%.
Dani Reiss, CEO of Canada Goose, stated that the team is currently being restructured to ensure that the resources at hand can drive the brand's further development across different regions, channels, and product types. "The decision to lay off employees is difficult and also the right one to put our business in the best position in the future," he said.
According to the third quarter financial report for the 2024 fiscal year released in February, Canadian goose sales revenue increased by 6% year-on-year to CAD 610 million in the three months ended December 31, 2023. The Asia Pacific market, including China, recorded a 61.5% increase in revenue, with a total sales revenue of CAD 271 million, surpassing the North American market for the first time.
However, in Canada, the United States, and the Europe, Middle East, and Africa regions, quarterly sales revenue decreased by 13.1%, 13.8%, and 25.9%, respectively, mainly due to the decline in e-commerce and wholesale channel sales. In the financial report, Canada Goose expects its revenue for the entire 2024 fiscal year to be between CAD 1.285 billion and CAD 1.305 billion, an increase of 5.6% to 7.2% compared to the previous year.
Compared to the past, this is not a bright number. According to the plan, Canada Goose will achieve a sales revenue of over 3 billion US dollars by 2028. Based on this, its sales must achieve an annual growth of about 20%, but now the growth rate has slipped to single digits. The goal is highly likely to fall through.
Whether it's performance or stock price, the pressure on Canadian geese is gradually increasing. A pessimistic signal is that the cold third quarter is usually the season when down jackets are hot selling, and about half of Canada's annual revenue is usually contributed by this quarter. However, sales have declined in other global markets except for the Asia Pacific region.
As a comparison, Moncler's sales revenue in the fourth quarter of 2023 increased by 17% year-on-year. In 2023, Moncler Group's revenue also increased by 17% to 2.984 billion euros, while revenue in Asia and Europe, the Middle East, and Africa increased by 30% and 14% respectively, with only a 1% decline in the Americas market.
The luxury goods industry is indeed responsible for the poor performance of Canadian geese in the face of a downturn. But when even the income earned during the autumn and winter seasons declines, Canadian geese have to face the reality that their attractiveness has gradually declined. The sustained high growth trend for many years will also come to an end.
It took Canada Goose less than 10 years to grow from a regional family company to a global luxury brand. Its sales revenue in the 2015 fiscal year was only CAD 218 million, but by the 2023 fiscal year it had reached CAD 1.217 billion. Other brands with similar volumes include Ferragamo and Valentino, but their performance growth has already stagnated for many years.
If only from the perspective of store expansion, Canada Goose has indeed taken on this wave of heat. Since opening its first store in China at the Hong Kong Guojin Center in 2018, Canada Goose has had over 20 stores in China, surpassing the domestic market in Canada and making it one of the markets with the most stores worldwide.
But in addition, Canada Goose seems to be learning how to become a scaled luxury brand.
For a considerable period of time, Canada Goose has been a high-end outdoor brand based on usage and winter warmth needs. When it attempted to transform into a luxury brand during its expansion, its style design failed to keep up with the pace of transformation. The fashion industry has always been an industry that pays for "appearance", and many high-end outdoor brands have realized this and cater to this demand of consumers to support brand premiums.
The solution for Moncler is to launch the Moncler Genius project and collaborate with designers including Jonathan Anderson and Simone Rocha. Canadian geese are also doing similar things, but neither the appeal of collaborative designers nor the novelty of collaborative styles have brought much response.
When consumers walk into the stores of Moncler and Canadian Goose respectively, they will find that this contrast is even stronger. The Moncler store is covered in marble, and the display windows are filled with large art installations. In the newly renovated Sanlitun Taikoo Li flagship store of Canada Goose, the goose yellow log style is dominant - with a strong outdoor feel, but not closely related to luxury brands.
While the image of Canadian geese was not yet fully established, they encountered a wave of high-end outdoor sports brands and a cold wave in the luxury goods industry. The former has diverted many high-end outdoor brands that also sell down jackets to Canadian Goose customers, while the latter has put many high-end luxury brands with unclear positioning in a difficult position.
Other details also demonstrate the immaturity of Canadian geese in the process of rapid global expansion.
For example, the "Overlord Clause" incident in 2021. The consumer was asked by the clerk to sign "replacement terms" when buying clothes. The terms show that unless otherwise specified by relevant laws, all goods sold in special stores in Chinese Mainland are not allowed to be returned. For a Canadian goose that had been in the Chinese market for three years and positioned as a luxury brand, its arrogant attitude could easily provoke consumer backlash, especially when it targeted the most picky group of consumers.
In addition, compared to Moncler and the similarly sized but stagnant performance of Ferragamo, Canadian Goose's marketing activities in China and globally are not too many. To some extent, it can be said that over the years, it has been lying down to enjoy the constant influx of heat. But when consumer preferences change, it won't be easy to get up again.
Furthermore, although Canadian geese frequently emphasize the growth momentum of seasonal clothing and footwear accessories in their financial reports, the reality is that these new categories have not achieved particularly significant success, nor have they made Canadian geese more diversified. The situation of obstacles in transitioning from high-end outdoor brands to luxury brands will naturally lead to a decrease in the attractiveness of Canadian geese to consumers.
Nowadays, Canada Goose is trying to drive further transformation through layoffs, but this is clearly not the solution to the problem. This approach can save labor costs in the short term, but the key to determining whether it can achieve sustained growth beyond its cycle is how this money is used and how the entire brand's strategy is coordinated.
Perhaps Canada Goose will become a true luxury brand by then.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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