Canada Goose parkas have become synonymous with wealth, celebrity, and Hollywood, but the brand wasn’t always the luxury label it is today. What started out as a little-known manufacturer of utilitarian outerwear went through decades of transformation and three generations of leadership before becoming a status symbol. Since taking over as CEO in 2001, Dani Reiss has leveraged the brand’s reputation for quality to foster a cult following of folks who covet these coats. Here’s how Canada Goose went from making jackets for its competitors to selling parkas that cost more than some used cars.
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00:00Less than three minutes into the 2004 thriller The Day After Tomorrow, we see our first Canada Goose logo.
00:08No one so much as shivers throughout this entire sequence.
00:12And when Dennis Quaid breathlessly props himself up,
00:15we see a nice clean shot of that pristine logo on an unblemished parka.
00:21The film was a turning point for Canada Goose, part of a careful marketing strategy
00:26implemented by CEO Danny Rees that allows the brand to sell parkas for more than $2,000.
00:33But with the company under fire for its use of animal products,
00:37and with increased competition from other brands,
00:40can Canada Goose weather a changing luxury outerwear industry?
00:45So how did a Canadian outerwear manufacturer transform into a globally recognized luxury fashion brand?
00:53And why are these coats so expensive?
00:57When I think of Canada Goose, one thing that really sticks out is how quickly it's managed to move
01:03from a real utilitarian private label company into the luxury space.
01:08Before Canada Goose was Canada Goose, it was Snow Goose.
01:11And before that, Metro Sportswear Limited.
01:14Started in 1957 by Danny Rees' grandfather,
01:18Metro Sportswear began in a tiny Toronto warehouse with a focus on high-performance outerwear for Canada's working class.
01:27Unlike the prominently branded coats modern-day Canada Goose offers,
01:32most of Metro Sportswear's products were meant for other companies to slap their logos onto,
01:37like L.L. Bean and Eddie Bauer.
01:40But then Danny's father, David Rees, joined the company in 1972,
01:45filled with ideas that would set Metro Sportswear on the path to becoming Canada Goose.
01:51This was just one of his innovations,
01:54which changed the game not just for the company, but for the industry.
01:58David invented one of the first ever down-filling machines,
02:02which revolutionized Metro Sportswear's manufacturing process.
02:06Instead of filling every garment by hand, a slow, messy, and inexact process,
02:13this machine allowed workers to ramp up production with more control over quality.
02:19The company became known for its down-filling expertise.
02:22It even sold the machines to other factories for a time.
02:26But crucially, the down-filling machines opened the door for the company to start making more parkas,
02:32its signature item to this day.
02:35So in our production lines, we have the capability to manufacture multiple styles.
02:40But at any given time, we are producing one style.
02:44When Business Insider visited, the factory was focused on the Snow Mantra parka.
02:49This $1,895 parka takes eight and a half hours, 247 pattern pieces,
02:57and 45 craftspeople to come together.
03:00Unlike most garments, which might be sewn together by a handful of people,
03:05a single Canada Goose jacket requires a small army.
03:10The sewing is the most critical part of it.
03:14The fabric must first be cut.
03:16In order to support our cutting operations here of approximately 2,000 jackets every day,
03:21we consume about 14,000 meters each and every single day.
03:27The down stuffed and fluffed.
03:34And don't forget the iconic logo.
03:37Each production line can pump out up to 300 jackets a day.
03:42But Canada Goose declined to tell B.I. how many finished jackets are stored in the warehouse at any given time.
03:53Each jacket goes through rigorous testing to make sure it will perform as advertised.
03:58Tests for strength, color transfer, and resistance check for flaws.
04:03This machine rubs up to 40,000 circles on a piece of sample fabric.
04:08And after the test is finished, we check the appearance of the fabric to see if there's any pilling
04:14or any noticeable change to the look of the fabric.
04:18To capitalize on the company's reputation for quality,
04:21in the late 1970s, David started selling Metro Sportswear's parkas under an in-house brand, Snow Goose.
04:28You don't probably know the name of any private label company. I don't.
04:32All of the luxury brands that we think of rely on branding.
04:37It sounds obvious, but they have a logo. You think of Louis Vuitton's LV.
04:41You think of Gucci's Horsebit.
04:44Snow Goose really took Canada Goose from something that only people in the clothing industry,
04:49in the garment industry, the manufacturing industry would have heard about,
04:52into something that everyday people on the street would recognize and hear about.
04:57They didn't cost a grand yet, but the private label gave the company a stepping stone to the Canada Goose prices we see today.
05:05But how do you convince folks to buy your new brand name label?
05:10Prove you can keep people warm.
05:13In the 80s, Metro Sportswear did.
05:16It developed the Expedition parka for the United States Antarctic Program.
05:21This was the company's warmest parka yet,
05:24with a windproof outer shell and resistance to temperatures down to minus 30 degrees Celsius.
05:30And a logo that looks incredibly similar to the Canada Goose logo we see today.
05:36Scientists nicknamed the coat Big Red, and it became standard issue for the Antarctic Program.
05:42You'll still see bright red scientists and staff scuttling through the snow at McMurdo Base and South Pole Station today.
05:50Canada Goose sells a civilian version of the Expedition parka.
05:54For $1,950, you can be as warm as an Arctic researcher.
06:00Until the early 90s, Metro Sportswear mainly served the Canadian market.
06:05But the early success of the Snow Goose brand helped the company take its first steps into Europe.
06:11Under current CEO Danny Rees, he discovered that Snow Goose was already trademarked in the region.
06:18So in 2000, Snow Goose became Canada Goose.
06:22One really important question, is Canada Goose prepared to provide people with parkas if we hit an apocalyptic ice age?
06:30Absolutely. That's a question I don't get every day.
06:35Before Danny took over as CEO in 2001, he was already pushing the company into the future.
06:43I was our company's first customer service representative, answering phones.
06:48I set up our first email. I cannot operate a sewing machine.
06:51But other than that, I've done pretty much every role, from packing jackets to sweeping floors,
06:58taking out garbage as a kid, to answering the phones and typing letters.
07:02When Danny asked his father to step aside so he could run the company, revenue sat at just $2 million.
07:10Danny told Forbes that at the time, Canada Goose had a cult following in the coldest places on Earth.
07:17But that cult following made for a small market.
07:20He wanted to cast a wider net, but first he needed to convince regular people they needed high-performance outerwear.
07:28So he made it a luxury.
07:33Probably the most recognizable symbol of that shift is the logo.
07:38The first Canada Goose logo was a nod to the Snow Goose logo, featuring a goose with its wings outspread.
07:45But in the early 2000s came the emblem we know today.
07:49The patch is supposed to make wearers feel like they belong to a club.
07:54Instead of solely catering to a niche market of folks who need these parkas,
07:59he shifted the company's focus to high-income urbanites in cold climates who might want these parkas.
08:06So going upmarket for Canada Goose meant going from something that people bought because they needed it
08:12to people buying it because they want to buy it.
08:16It means raising prices, marketing to a more luxury clientele, selling in more luxury stores.
08:24The price of luxury came to about a grand.
08:27The issue was Canadian city dwellers didn't seem to be interested.
08:32Every Toronto store owner Danny pitched the company's new catalog to turned him down.
08:38So he tried his luck abroad.
08:41Danny managed to persuade a handful of high-end retailers in Europe to purchase some parkas.
08:47And funnily enough, once Canadian retailers noticed the coats catching on abroad,
08:52they started placing orders, leading Canada Goose to re-import its product.
08:58By 2008, the company's sales revenue had grown to $16.4 million.
09:04And this growth came with next to no traditional marketing budget.
09:09Instead of purchasing prime-time commercials or two-page spreads,
09:13Danny handed out parkas to people who would be seen working out in the cold.
09:18Hockey players, bouncers, valets, even ticket scalpers were gifted jackets
09:23in the hopes that they'd become analog influencers.
09:27While this effort helped the brand build an aura of authenticity,
09:31it didn't quite capture the attention of the luxury consumers Danny was trying to reach.
09:37Things really picked up when Canada Goose entered Hollywood,
09:41with its appearance in 2004's The Day After Tomorrow.
09:46Canada Goose did not pay for this inclusion, according to its former head of marketing,
09:51but it did provide parkas to the entire cast and crew.
09:56Months later, moviegoers saw the logo once again in National Treasure.
10:03In 2012, Danny dove deeper into the entertainment world
10:06by sponsoring film festivals like Sundance and the Toronto International Film Festival.
10:12He gave out hundreds of coats to attendees, filmmakers and actors,
10:16people in the industry who would be seen.
10:20It didn't take long for the Canada Goose logo to pop up in paparazzi photos
10:24of celebrities like Emma Stone, Hugh Jackman and Common.
10:29By the time Canada Goose filed for an IPO in 2017,
10:33it was reporting a revenue of $291 million.
10:38Canada Goose really embraced gifting before the influencer era,
10:44where gifting has become really popular.
10:46It's a lot more authentic to see someone wearing something
10:48because they're choosing to wear it versus being paid to.
10:51One thing that's important to remember is that gifting is a form of marketing.
10:54It is a marketing budget.
10:55It's expensive to send hundreds, thousands, whatever it is,
10:59dozens of these coats to people,
11:01but it's one that consumers believe, probably rightfully so,
11:05is a little more authentic.
11:07At this point, Canada Goose products have appeared
11:10in over 300 film and TV productions around the world.
11:15Industry folks wearing gifted jackets is one thing,
11:18but leveraging that popularity to connect with the brand's actual consumer is something else.
11:24We've been a wholesale brand for so long,
11:27and we decided that we wanted to have direct relationships with our consumers.
11:30We wanted to sell online. We wanted to have stores.
11:33In 2014, the company launched its website,
11:36and in 2016, its first flagship stores in Toronto and New York City.
11:41Luxury is all about experience.
11:43It's about feeling good when you wear the product,
11:45feeling good when you're buying the product,
11:47feeling good when you're browsing for the product,
11:49and you can control that whole experience in a brick-and-mortar boutique.
11:53And what you saw was when Canada Goose started opening brick-and-mortar stores,
11:57analysts reported that they were actively siphoning off sales
12:02from other outerwear brands like North Face.
12:05In just four years, Canada Goose's direct-to-consumer sales
12:09went from zilch to accounting for nearly half the company's revenue in 2018.
12:14And today, it accounts for over 70% of its business.
12:19The company currently operates 72 retail stores
12:23and plans to open more.
12:26And while these plans reach across the globe,
12:29anchoring the company in Canada remains a priority.
12:33As other manufacturers in the industry picked up their operations
12:36and moved them abroad to cut costs,
12:39Danny made a bet.
12:41We thought, well, if we could stick around and stay made in Canada
12:44for, say, five years while everyone else left,
12:47that we would be in this great position five years later
12:50because we'd be amongst the only people left making stuff in Canada,
12:53and that's what happened.
12:54And so, you know, as a result, we had this competitive advantage
12:57where we were an industry leader at made in Canada.
13:02Canada is really cold, and so you trust that if this is made in Canada
13:05and people in Canada wear it, it's going to keep me warm in New York
13:09or it's going to keep me warm in London.
13:13It also is a signifier of quality.
13:16Whether fairly or not, people assume that if something is made in Canada
13:20versus made in China, there's going to be more dedication to quality
13:23and making sure it works as a performance garment.
13:27You see this with Hermès.
13:29Most of their products are still made by hand in France.
13:32You see it with Brunello Cucinelli.
13:34Their sweaters are made in Italy in a factory town.
13:37Yet the company has moved some of its manufacturing abroad.
13:41Its knitwear line, introduced in 2017, is manufactured in Italy,
13:46and some down-filled items come from Romania.
13:49Gloves and mitts are made in China.
13:52If you scroll down to product info on Canada Goose's FAQ page,
13:56you'll see that the company says it intends to find a Canadian manufacturer
14:00for gloves and mitts.
14:02But knitwear will stay abroad,
14:04the official reasoning for this being that's where the experts are.
14:09Losing control over your supply chain,
14:11you just lose some of that authenticity that you have really capitalized on
14:16and kind of sold as your brand.
14:18So far, for Canada Goose, this has not been a problem.
14:22The brand's most notable controversy comes from its use of fur and feathers.
14:29In 2015, the organization Animal Justice filed a complaint
14:33with Canada's Competition Bureau,
14:35saying that Canada Goose's description of its coyote trapping practices as humane
14:40was false and misleading.
14:43The complaint was dismissed in 2016,
14:45but protests by PETA and other animal rights activists intensified.
14:51Protesters appeared at store openings,
14:54at the company's IPO,
14:56even outside Danny's house in 2021.
15:00Just over a month after that protest,
15:02Canada Goose announced its intention to end the use of all fur in its products.
15:07Danny has never said outright that the backlash is what moved him to make the change.
15:12To us, it was an intuitive decision to stop using fur
15:15and to become a more sustainable company.
15:17But that didn't stop PETA from claiming victory.
15:21Luxury brands and fur have always gone hand in hand.
15:24Fur is a limited product, which means exclusivity.
15:27It's expensive. It's warm.
15:29What you're seeing in response to environmental concerns
15:33or animal welfare concerns is some luxury brands moving away from fur.
15:37Montclair, Dolce & Gabbana vowed to stop using fur.
15:41Canada Goose vowed to stop using fur.
15:43It's really hard to tell how much of that is a business reason
15:47in terms of people are not buying fur
15:49and how much of that is a marketing,
15:51a marketing, not ploy, but it's a marketing move
15:55to make the brand seem more palatable
15:57in response to critics.
15:59Canada Goose wouldn't stop cold turkey, however.
16:02It laid out a multi-year plan for ditching fur,
16:05starting with ceasing the purchase of fur by the end of 2021
16:09and the manufacturing by no later than the end of 2022.
16:13The functionality of fur works in such a way
16:16as it protected a person's face in the extreme cold weather
16:20or in wind storms and things like that.
16:22There's no specific material that replaces it.
16:24We very much focus on the construction of our hoods
16:27and all the surrounding elements
16:29to make sure that they were equally as functional
16:31as they were before when they did have fur.
16:33Fur hasn't been Canada Goose's only animal rights controversy.
16:37Activists have also taken issue with the company's use of down.
16:41In 2017, PETA released a video
16:44that supposedly depicted mistreatment of geese
16:47at Canada Goose's down supplier.
16:49A PETA spokesperson told BI that afterward,
16:52Canada Goose agreed to diversify its products away from down.
16:56PETA has since removed mention of Canada Goose from the video.
17:00But there's little indication these controversies
17:03have hurt Canada Goose's sales.
17:05While profit has fluctuated for Canada Goose over the years,
17:09annual revenue has grown pretty consistently.
17:12It's been inching closer and closer
17:15to a billion dollars since 2022.
17:18The shift to direct-to-consumer
17:20has caused a dip in wholesale revenue
17:23that has analysts cautious about Canada Goose's future.
17:27In response to the strategy change,
17:29wholesale revenue fell 41% for the 2024 fiscal year.
17:33Direct-to-consumer has a lot of long-term growth potential,
17:37but moving away from wholesale so quickly
17:40has already caused some issues.
17:42Let me just check what it is today.
17:45Let's see.
17:49Canada Goose stock.
17:53Not good? OK.
17:55Over the last five years,
17:57the company's stock value has plummeted about 70%.
18:01In October 2024,
18:03Wells Fargo downgraded the stock
18:06from equal weight to underweight.
18:08And basically that means that it's no longer going to perform
18:12or they don't expect it to perform.
18:14Similarly to its luxury peers,
18:16they expect it to perform not as well.
18:19The brokerage cited diminished brand heat
18:22as the main reason for the downgrade.
18:24Mentions of Canada Goose on social media
18:27fell 24% in the third quarter of 2024.
18:30At the same time, there was 11% growth
18:33in mentions of other outerwear brands.
18:35A lot of luxury stocks have struggled this year,
18:38and it's a reflection of the macro environment.
18:42It's also a reflection of Canada Goose
18:44maybe losing a little of that brand heat.
18:46In May 2024, Canada Goose updated its long-term goals.
18:51It outlined three main areas of focus.
18:55Strengthening the DTC experience in person and online,
18:59expanding product lines,
19:01and simplifying internal operations.
19:04The creation of new categories moves Canada Goose's focus
19:08away from its core line of downfilled products,
19:12including parkas with $1,000-plus price tags.
19:15Shoes, home goods, and rain and warm weather clothing
19:19entice customers to buy more from Canada Goose year-round.
19:23For a company like Canada Goose,
19:25which has built off one really high-quality product
19:28that's meant to last your lifetime,
19:30it's really hard to create repeat customers,
19:34and it's a balancing act,
19:36because you want them to come back,
19:38but you don't want to move too far away from your niche
19:40because then you lose that core hero product.
19:45In May 2024, the company appointed the fashion designer
19:48Hayter Ackerman as its very first creative director.
19:52His first collection is true-to-form for Canada Goose,
19:56combining the old and the new in a 60-plus-piece array
19:59based on the original Snow Goose line.
20:04It includes parkas, but also items from newer product categories,
20:08like apparel and accessories.
20:10You want to be really careful
20:12when you're expanding your product range
20:14or broadening your market,
20:16because, again, it's a lot harder to go upmarket
20:18than it is to go down.
20:20Danny told Vogue Business that bringing Ackerman on
20:22was part of a strategy of infusing a new energy into the brand,
20:27but in a way that stays true to our heritage.
20:30It's classic Canada Goose,
20:32mixing its established authenticity with innovation.
20:35One thing that would be really smart for Canada Goose to do
20:38is move into different styles of winter jackets.
20:41So the key is to maybe make a new winter jacket style
20:43that people want.
20:45They don't necessarily need it.
20:47Their old Canada Goose will keep them warm,
20:49but it's a new look.
20:52It's hot. It's what everyone's wearing.
20:54Overall, analysts seem to be cautiously optimistic
20:57about the future of Canada Goose.
20:59But as the company navigates its strategic shift,
21:02only time will tell if it can soar to new heights
21:05or if it's just winging it.