- Canada Goose's newest store has no inventory for shoppers to take home.
- Instead, the coatmaker wants consumers to have a multisensory experience to feel why the outerwear is worth the price-tag, which can top $1,000. It's called "The Journey."
- If "The Journey" does its job, shoppers will leave empty-handed, but filled with the anticipation that a new coat or accessory will arrive at their home that night, or the next day, if purchased after 2 p.m.
Luxury brands have long leaned on brand history, and the storytelling that surrounds it, to sell the image and associated pricey merchandise.
In today's retail world, "experience" is the keystone for retail and Canada Goose is taking it literally at its latest Toronto concept location.
Although located in the CF Sherway Gardens Mall, the Canada Goose store has no inventory for shoppers to take home. Instead, the coatmaker wants consumers to have a multisensory experience to feel why the outerwear is worth the price tag, which can top $1,000. It's called "The Journey."
The entrance to the concept store is called "The Crevasse." There are OLED panels under glass flooring that simulate cracking ice as consumers walk forward. The walls are made to look and feel like rock. There's an accompanying soundtrack pumping out the sounds of the Arctic.
There's an "Elements Room," with two curved walls — one 60 feet wide and one 30 feet wide — that play seasonal nature films shot in British Columbia from 4K laser projections in the ceiling. In the middle of the room, mannequins wear merchandise that complement the season.
The "Gear Room" is a "re-interpretation" of a seed vault in Norway, which holds seeds from around the world in case of a pandemic. In this room, consumers will store their personal belongings and select a Canada Goose coat and accessories to try out in the "Cold Room." There's a quick explanation by brand ambassadors of the cold room and Canada Goose's "Thermal Experience Index," which is a rating scale for its outerwear based on the temperature range for which it's best suited.
While Canada Goose has other "Cold Rooms" where Arctic conditions are simulated, it will snow daily in the new Toronto experience. The brand says that's a first for North America.
When consumers enter the room, it's dark and cold, 10 degrees Fahrenheit (-12 degrees Celsius). The walls are projection screens with original films about the cold and nature, narrated by Lance Mackey, an Iditarod champion, and Sarain Fox, an artist and indigenous activist from the Anishinaabe nation.
After leaving the "Cold Room" consumers will head to the retail area, where brand ambassadors are available to answer questions and help navigate through the product inventory, digitally on kiosks.
If "The Journey" did its job, shoppers will leave empty-handed, but filled with the anticipation that a new coat or accessory will arrive at their home that night, or the next day, if purchased after 2 p.m.
Canada Goose is more than 60 years old, and continues to make its coats in the country of origin, because, as the company says "cold weather is part of our national identity."
"The Journey" store is part of Canada Goose's growing retail business segment, which includes its own stores and website, and accounts for around a quarter of its total revenue.
In its fiscal second quarter ended Sept. 29, revenue from its retail operations grew 47%, while revenue from its wholesale business, or sales of its brand through other retail partners, grew 22%. Profit was also stronger than expected.
Despite topping analysts' forecasts, Canada Goose shares took a hit as the premium coatmaker merely reiterated its forecast, suggesting the current quarter would fall short of previous expectations.
Demand for the pricey outerwear from wholesale partners led the brand to send inventory earlier. While strong demand is good, Canada Goose said the result boosted its second-quarter results, but the timing shift could hurt its current quarter's wholesale results. The current quarter, Canada Goose's fiscal third, represents more than 40% of its annual revenue.
In a note to clients, Susquehanna analyst Sam Poser wrote "while [Canada Goose] management excels as operators, poor communication with the Street is weighing on the stock." He added, the guidance is "very conservative" and he expects "significant upside potential" as the brand "remains one of the few true growth stories in the consumer discretionary sector."
Shares of Canada Goose are up 120% since it went public in March 2017, but are 45% below an all-time high hit in November 2018.
China is a key growth area for Canada Goose, with its business there nearly doubling in the most recent quarter. However, the continued unrest in Hong Kong has pressured local sales. On its earnings call, Chief Financial Officer Jonathan Sinclair said the brand is "being very prudent" with decisions in the region, including exploring "accommodations with our landlords and service providers alike."
Cowen & Co. analyst Oliver Chen noted protests in Hong Kong add uncertainty to Canada Goose's performance there, and the key holiday quarter marks the anniversary of previous important store openings, making it a harder year-over- year comparison to beat. Still, the firm recently reiterated its outperform rating on the stock, citing for its call the "continued belief" that Canada Goose's strong brand following, expanding assortment and geographic expansion beyond North America can drive 20% earnings growth over the medium term.
Meantime, Wells Fargo analyst Ike Boruchow is less confident in the growth story, writing in a recent note to investors "until we see signs of greater stability at wholesale we will remain sidelined" with regard to an investment recommendation.
While there are consumers that swear by the warmth of the expensive down-fill coats, there are others that strongly oppose the use of real goose-down feathers and coyote fur.
When new stores have opened in recent years in New York City and China, consumers lined up around the block. But animal rights activist group PETA also often shows up, protesting outside Canada Goose stores. The group threatened to protest at the ShopTalk 2019 conference in Las Vegas where CEO Dani Reiss was scheduled to speak. Reiss ultimately canceled that appearance.
Like other trends, popular fashion to some is the butt of jokes for others, like recent articles that poke fun at those that sport a coat with the recognizable red, white and blue logo patch, warning a Canada Goose coat "may keep you single."