TORONTO, Canada — Canada Goose shows no sign of letting up on its aggressive growth strategy. This week, the brand unveiled a knitwear collection, the first time it has diversified from its core outerwear product.
The launch represents a critical new avenue of expansion for the company, which went public in March of this year at a valuation of CAD $2.3 billion ($1.72 billion). It also follows a run of impressive growth. In June, Canada Goose posted first quarter revenues of $28.2 million, an increase of 79.7 percent, with direct-to-consumer sales up to $8.3 million and its wholesale business increasing by 38.2 percent.
Canada Goose’s new status as a publicly traded business puts extra pressure on the knitwear expansion: shareholders demand profits and growth. And while its goose down parkas retail for around $1,000 apiece, the knitwear will start from $295, with the most expensive item being a hybrid knit at $650, allowing the brand to explore a more entry-level price point.
“We see great potential for knitwear globally and that it could become a meaningful category for us over time,” Canada Goose president Dani Reiss tells BoF. “This is part of executing on our vision to become a multi-season brand, adding new products for different seasons and climates. It’s a natural next step that builds on our function-first design philosophy.”
The range — comprising 15 styles across men’s and women’s — was a project 36 months in the making. Fans of its specialist refinements will appreciate the collection’s ability to perform: the knitted threads are specially woven to regulate body temperature, designed for both warmth and breathability.
While the brand might have lent its name and technical skill to Vetements for Autumn/Winter 2016, Canada Goose's new knitwear range is focused on its core customer, with a collection that is neutral in tone and includes zip-up sweaters, hoodies and fisherman jumpers.
“We’ve often heard from our customers saying that they’d like to experience more from us as a brand,” continues Reiss. “We have succeeded at introducing lighter weight outerwear so this is a continuation of moving beyond the parka.” And it appeals to its core customer values, in-line with the brand’s commitment to using only fully traceable fur and down, the collection’s launch on Monday was accompanied by a minute-long craftsmanship video showing production in reverse, from customer to sketch.
This is part of executing on our vision to become a multi-season brand.
With new flagship stores opening in Toronto and New York, and additional outposts planned for Boston, Chicago and London, it makes sense to expand the product offering and to harness those direct-to-consumer sales by having additional garments hanging alongside the jackets.
It’s not the first time a performance brand has broadened its offering. In 2015, Alasdhair Willis, creative director of Hunter, announced the company was restructuring to focus solely on festival engagement — with an intention to capitalise on the success of Hunter’s classic rubber boots and offer a range of outerwear. It made sense; waterproof jackets were the next logical step for the brand. And while the privately-owned company doesn’t release revenue figures, outerwear is now one of its fastest-growing categories, with the rubberised hunting coat, and vinyl windcheaters and ponchos being some of the brand’s best sellers.
Following the launch of its outerwear offering, the brand reported a sales increase of 50 percent. “When I arrived in 2013, virtually 100 percent of sales came from the iconic boot,” says Willis. “But we are having huge success with our outerwear and accessories… Many people thought it would be impossible, but we have diversified from a single-product business into a multi-category brand.”
Similarly, the skiwear brand Perfect Moment, launched in 2007, expanded into surfwear in 2016, and athleisure in June this year, using breathable, quick-dry fabrics with muscular compression power for its range of sports leggings and gym tops. Creative director Jane Gottschalk described surfwear as a “natural choice” when looking to introduce a summer range; the popularity of athleisure also makes it a bankable category. Happy Socks, the sock company founded in Sweden in 2008, expanded into underwear; the brand now retails in over 90 countries and was valued at $80.9 million earlier this year.
These brands are diversifying, but each has made a relatively safe expansion and none have deviated too far from its core offering. “It seems appropriate that Canada Goose tries to branch out into knitwear, as this is a category closely linked to outerwear. Moncler is doing the same,” says Luca Solca, head of luxury goods at Exane BNP Paribas, of the Italian outerwear brand that posted revenues of over €1 billion in March. “One has to consider, though, that it may take a long time before these brands [are] as desirable in knitwear as in outerwear.”