‘The Range Rover of clothing’: An inside look at Canada Goose after going public

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This article was published 28/10/2017 (2935 days ago), so information in it may no longer be current.

Many Winnipeggers woke up on Friday morning shuddering at the frigid temperatures nearing -10 C. But not Dani Reiss.

The president and CEO of Toronto-based Canada Goose Holdings Inc. was in town visiting the company’s two Winnipeg manufacturing facilities.

“It’s awesome,” Reiss said about the below-zero October Winnipeg weather. “I love it.”

And well he should. His company, which has been around since the 1950s, makes some of the best — and most expensive — winter wear in the world.

Canada Goose and its now-famous “Arctic Program” parkas, in particular, have become one of the most valued outerwear brands in the world.

A successful public offering and stock market launch in March has goosed the Canada Goose brand that much more and with recent high-end store launches in the highest of high street locations — Yorkdale Mall in Toronto, Soho in New York, the Miracle Mile in Chicago (that just opened this week) — consumers who are waiting for a budget line of Canada Goose coats are going to be out of luck.

This is a luxury brand company. There is no longer any attempt to pretend otherwise. As if to prove the point, the former CEO of Chanel just joined the Canada Goose board of directors.

Reiss likes to characterize the brand as “performance luxury.”

“We are the Range Rover of clothing,” he said.

Reiss is clearly proud of the fact that at least some of the perceived value of the brand is its made-in-Canada bragging rights. The company’s Winnipeg production operations are increasingly key to ensuring that remains the case.

“We have been committed to making products in Canada for many years and we are as committed as ever to continue doing that,” he said.

A quick peek inside its two-year-old production facility on Mountain Avenue is at least partial evidence.

Hundreds of sewing machines are manned by workers in different rows distinguished by the colour of the workers’ smocks — mauve, taupe, lime-green — like different teams.

The pattern-cutting side of the floor operates 24/7. Finished garments leave the plant every day.

Along with another factory on Bannatyne Avenue that Canada Goose has been operating out of since 2010, the company has about 1,000 workers in Winnipeg.

With the two plants roughly equal in size — at about 100,000 square feet, Mountain Avenue is slightly larger — workers make garments from start to finish. Reiss said the Mountain Avenue location is capable of making everything in the company’s portfolio.

It owns six production sites across the country but that still only accounts for about 30 per cent of its total volume. A number of contract manufacturers, some of whose production is exclusively for Canada Goose, continue to be an important part of the process. The company has made it clear it would look at additional acquisitions or potential future greenfield developments but it has no intentions to move production off-shore.

That is one of the distinguishing characteristics of the company that has prided itself in swimming upstream for some time.

Not so long ago, Winnipeg had a booming garment sector employing several thousand people, but it was almost entirely wiped out in a few short years when import regulations changed, making off-shore manufacturing far more economical.

“Winnipeg is an important apparel hub historically,” Reiss said. “We have been able to build it back at this sort of scale and it is something we are really proud of.”

Perhaps more than many of its peers in the domestic clothing manufacturing business, Canada Goose has much at stake in its investment in brand-Canada. It has benefitted from that connection and has used it to grow its global appeal and has done so with style.

No amount of expertise from Bay Street corporate finance types could have foreseen the rise in Canada’s standing in the world as perhaps one of the last virtuous liberal democracies standing. Having a sexy Prime Minister doesn’t hurt either.

“I’ve felt like an unofficial ambassador for Canada for many, many years,” Reiss said. “The world loves Canada and has loved Canada for many, many years. But I would say there has never been a moment where people love Canada more than they do today.”

That has helped inspire Canada Goose to work more efficiently at getting its expensive, well-made garments to customers around the world. It has invested in an e-commerce platform and its direct-to-consumer channel has quickly captured almost 30 per cent of its total sales. As recently as three years ago the wholesale business accounted for a full 100 per cent of revenue.

After raising $340 million in an initial public offering in March — after previously selling off majority ownership of the company to private equity firm Bain Capital in 2013 — the company has not disappointed, with the share price jumping since the opening bell. Investors in the IPO are enjoying a 57 per cent return in just seven short months.

And unlike other scenarios where private equity takes over a long-standing company, loads it up with debt and then takes it public and cashes out, Bain Capital remains the largest shareholder and Reiss continues to hold more than 20 per cent of the equity.

Perhaps most important is that the company’s vision has not changed.

“We have expressed to the public markets that we intend to continue running the company the same way,” Reiss said. “We have a long-term vision. Our goal has always been to build an enduring global brand. We don’t believe there is any Canadian brand like us on the global stage. Our intention is to continue to do that.”

martin.cash@freepress.mb.ca