Canada Goose bypasses saks with sales pitch for Amazon world

Bloomberg

Dani Reiss, who runs Canada Goose Holdings Inc., used to be so anti-logo that he would cut the little crocodiles off his Lacoste shirts. A prominent North Pole crest is emblazoned on the shoulder of each parka his company makes, enhancing their cache with consumers as Amazon.com Inc.’s shadow looms large over the traditional retail landscape.
“I didn’t like brands, which is very ironic I realise given our large logo,” Reiss said. “What I learned when I started working here was that the stories behind these products were phenomenal, the reputation we had built was phenomenal, anybody who knew about it really liked it—but nobody knew about it.”
Canada Goose turns 60 this year, but as a hot consumer brand it’s a relative youngster. After selling through wholesalers for most of its history, it’s only just beginning to roll out its direct-to-consumer strategy. The company is doing this in the midst of a growing threat from Amazon and declining mall traffic, giving it the ability to tailor its approach to the changing retail reality. Its strategy: rapid growth of e-commerce bolstered by a few flagship stores that Reiss says will help close the 15-point profit margin gap with its luxury peers.
The direct-to-consumer approach has the added advantage of reducing Canada Goose’s reliance on the struggling retailers that accounted for all of its sales just three years ago. Department store chains like Hudson’s Bay Co.’s Saks Fifth Avenue, Bloomingdale’s, Harry Rosen and Holt Renfrew are at the front lines of Amazon’s assault on the industry, which has been forced to shutter stores and lay off employees amid declining mall traffic. This summer, Amazon said it would launch a service called Prime Wardrobe that lets consumers try on items at home before they buy, causing department-store shares to slump.
“There’s no doubt that the wholesale landscape today is languishing,” said Reiss, who has been CEO since 2001. He’s the third generation of his family to run the company, founded by his Polish immigrant grandfather in 1957.
He emphasized that Canada Goose still has a strong relationship with its wholesalers, while its popular outerwear and new line of knitwear are attracting shoppers in department stores. But Reiss believes the direct-to-consumer category, which accounted for 29 percent of Canada Goose’s revenue in the fiscal year ended March 31, will grow faster and could one day overtake wholesale as the biggest source of sales.
The pillar of its consumer strategy is e-commerce. Canada Goose has four country-specific sites, in Canada, the US, UK and France, and plans to roll out seven more European sites this year with a plan to eventually be “online everywhere around the world,” Reiss said.