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Canada Goose's biggest business risk: itself

March 16,2017 17:20

In a series of black-and-white, vintage-style photographs included in its IPO filing, parka-maker Canada Goose used words like “heritage,” “craftsmanship,” “timeless,” and “adventure” to describe its brand. But its brand could be the very thing that ...and more »

In a series of black-and-white, vintage-style photographs included in its IPO filing, parka-maker Canada Goose used words like “heritage,” “craftsmanship,” “timeless,” and “adventure” to describe its brand.But its brand could be the very thing that hurts Canada Goose after it goes public.The 60-year-old, Toronto-based company is set to hit the New York Stock Exchange and Toronto Stock Exchange on Thursday under the ticker GOOS. On Wednesday, it priced its shares at C$17 (about $12.77 USD). But under “risks related to our business” in its Feb. 15 F-1 filing, Canada Goose cautioned: “Our business depends on a strong brand, and if we are not able to maintain and enhance our brand we may be unable to sell our products.”That may sound like a run-of-the-mill, pro forma caveat for any apparel brand to include, but in Canada Goose’s case, recent news shows a real risk to the company’s brand.View photosProtestors call out Canada Goose over coyote fur (Getty Images)In November, Canada Goose opened its first New York City retail store, in Manhattan’s SoHo neighborhood. Protesters from PETA (People for the Ethical Treatment of Animals) crashed the grand opening.Since that time, protests and marches have continued, and signs have popped up around New York that slam the company’s use of coyote fur to line its parka hoods. (“Fur trim kills.”) And PETA intends to buy $4,000 worth of shares in the company when it hits the market—the minimum number needed to attend Canada Goose shareholder meetings.PETA has done the same, in the past, with brands like Louis Vuitton, Hermés, The North Face, and even Tesla. Once PETA is a Canada Goose shareholder, it will aim to use its voice to change the company’s fur-trapping methods.View photosA sign in Brooklyn protesting Canada Goose“It’s preposterous to claim coyotes whose legs are ensnared in steel traps for up to 72 hours are being treated humanely,” PETA campaigns director Ashley Byrne told Yahoo Style. “Cruelty is found in every stitch of those jackets.”If a large volume of consumers decide that they agree with PETA, they may move away from the trendy $900 coats. And that would be a problem for Canada Goose sales—and its shares.As Canada Goose acknowledges in its risks section, “Our brand may also be adversely affected if our public image or reputation is tarnished by negative publicity.”View photosImages from Canada Goose’s F-1 filingWhen you think of popular parkas, you might think of The North Face, Patagonia, or Columbia, but Canada Goose’s price point makes it more high-end than those brands—a more direct competitor is Moncler.The “premium brand image” of Canada Goose, in the words of its IPO filing, is “integral to the growth of our business.” But as it grows, and opens more stores (and becomes a public corporation), that premium image may fade, a separate problem from the backlash over fur.“As we penetrate these new markets and our brand becomes more widely available, it could potentially detract from the appeal stemming from the scarcity of our brand,” the company warned in its filing. (A spokesperson did not reply to requests for comment for this story.)For now, the protests are most concentrated in New York. Canada Goose is a 60-year-old brand and lately its popularity has been spurred by Hollywood celebrities wearing the parkas. There is a strong chance the protests don’t harm the company in the long run.But in the short term, as animal-rights folks continue to bash the brand, it’s certainly sparking some of the “negative publicity” that the company knows could be a real problem for its public offering.—Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.Read more:How Uniqlo’s brand strategy involves key athletesAdidas goes all in on Kanye WestHow sneakers are driving Adidas’ comeback in America

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