Canada Goose, the high-end performance outerwear brand, just announced plans to open 6 new stores. The new locations-one each in Milan, Paris and Minnesota’s Mall of America, along with three in Canada-will bring the fast growing luxury retailer’s store count to 17 spanning three continents.
While Rent the Runway, Stitch Fix, Glossier and other so-called digitally native fashion brands generate the most press, in many respects Canada Goose is outpacing them. In recent years the company has been growing revenues more than 30% annually as it increases wholesale distribution and dramatically grows its direct-to-consumer (DTC) business (online and through owned-stores). Most impressive-and standing in stark contrast to the vast majority of current and hoped for “unicorns”-is that Canada Goose makes money. A lot of money. In the most recent quarter the Toronto-based company reported operating margins in excess of 30%, results which are likely to only improve as the company generates more scale economics and DTC becomes a greater portion of total sales.
Canada Goose is a great illustration of a retailer delivering on being “memorable,” which is №7 in what I call my 8 Essentials of Remarkable Retail. Memorable brands create magic at the intersection of powerful customer relevancy and a truly wow experience. Like many of the best luxury brands, Canada Goose has an interesting and authentic origin story. But the real magic happens through their unique, highly differentiated product design combined with how the product is delivered in person. Canada Goose stores are far from boring. Their stores tell a compelling story, brought to life through beautiful imagery, dramatic product presentation and outstanding customer service.
While many retailers talk about being “experiential,” much of what passes for interesting is often gimmicky. Canada Goose’s “Cold Rooms” are anything but that. These innovative dressing rooms are essentially walk-in freezers where customers can try on the company’s products in simulated weather conditions. So not only are they creating a remarkable experience in the most literal sense, they are delivering something intensely customer relevant and useful. Unsurprisingly, conversion rates have spiked in stores that have added Cold Rooms.
On a recent trip to Manhattan, I was a bit surprised to see a significant percentage of folks hustling to their midtown offices sporting all manner of outwear with the Canada Goose logo. While this highly unscientific market research should be taken with a grain of salt, it does underscore both the appeal and the risks inherent in Canada Goose’s future. Clearly there are vast numbers of additional potential store locations. Moncler, probably the brand most analogous to Canada Goose, has nearly 300 worldwide. And robust growth in e-commerce is a lay up as the brand gains more distribution. It’s also pretty easy to imagine significant upside from product extensions. At face value it would seem that robust sales and earnings growth are likely for many years to come.
While Canada Goose delivers well-designed products that work, it is also a highly logo driven and, some would say, an over-priced fashion brand. Right now, in certain cities, it’s become the outerwear “badge brand.” But we shouldn’t forget that over the years the retail industry has seen plenty of brands that ascend to great heights on their “it” status, only to crater when the cool kids and fashionistas move on the next new thing. Unfortunately, as far as I know, no one has built a reliable model to readily predict which high-flying brands will crash back to earth when trends change versus which will achieve and sustain true iconic status.
While I certainly lack the gift of prophecy, I like Canada Goose’s odds of becoming one of the great global luxury brands over the next decade. People buy the story before they buy the product and Canada Goose’s is compelling and memorable: an authentic history, products that deliver, great customer service and a wow experience. And, at least so far, they have executed in a nearly flawless manner.
A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts and follow me here
Originally published at https://stevenpdennis.com on April 17, 2019.