2015: The Year of the Goose

Published by PolisPandit on February 11, 2015

Canada Goose.  If you have not heard of this company, well, you should have because 2015 is the year of the goose.  Yes, Kate Upton adorned one of their coats back in February 2013, but this year it will go full mainstream.

Already considered a cult by some, especially those in Canadian (duh!) and European markets, the jackets have taken over the American cold-weather industry and will only make further advances this year.  While it is designed for the harsh climates of the Arctic and Antartica, the streets and subways of New York City are teeming with these coats.  It seems like half of the jackets in the city are of the Canada Goose variety.  What started as a functional coat for freezing temperatures has become a fashion statement in a city like New York where a coat of this quality probably isn’t even necessary.  I mean it even says “Arctic Program” on the sleeve patch.  Has New York really turned into the Arctic?  Of course, New Yorkers rarely ever wear clothing for its functionality if the style and look cannot compete.

While the stunning looks of Kate Upton may have sparked the goose madness in America, its investors, high ticket price, and status symbolism have carried it more mainstream than Kate Upton’s cleavage ever could.  The coat and company have received so much hype recently that Fortune asked the question this past week whether the company should go public.  With the recent surge of cold weather along the eastern seaboard of the United States and the consistently cold winters every year from Boston to DC, 2015 may be the perfect time for an initial public offering for Canada Goose.

The company started making coats in 1957 in a small warehouse located in Toronto, Canada.  Now this warehouse has grown into an internationally recognized brand because of the superior quality (still made in Canada) of its coats and the strong brand recognition its red coat patches carry in popular culture.  This international reputation attracted the interest of an American investment firm you might have heard of, Bain Capital.  In 2013, Bain acquired the company at a rumored valuation of $250 million.  It’s obvious goal – to infiltrate the U.S. market.

In order for Canada Goose’s flight path into the U.S. market to achieve success, the company and Bain will need to assess one important factor: the high ticket price.  At around $1,000 per coat, financial analysts could argue that the market might be limited to specialty buyers or a select class of wealthy consumers.  The economic evidence, however, suggests that Canada Goose has been able to reach all types of buyers, men and women alike.  The company has experienced astronomical economic growth in the past few years; growth which convinced Bain Capital to put millions on the future success of the company.  With these considerations in mind, it’s reasonable to think their profit margins and customer base are not a cause for concern.

Even if the margins and customer base are not ideal, exorbitant prices on quality goods brings status, especially in fashion hubs like New York.  Wearing that soon to be infamous red patch on your coat sleeve will soon mean much more than showing the world you have a nice coat; it will tell everyone you have a nice life too.  As superficial as it sounds, the fact is that many consumers are incentivized to open their wallets and purses because of this desire.  Investors should be too.  Most New York consumers want the world to see their success, even if it’s only apparent from a red patch on a sleeve during a 40 degree day in the city.  This type of symbolism and hype could bring huge financial success to the company should it it decide to go public in the near future.

If Bain Capital and Canada Goose play their cards right, the company will fly south by winter 2015 to the New York Stock Exchange and spread throughout the market like a flock of geese.