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To be honest, the global economic outlook is having significant impact on consumers behavior, further more resulting in the dismal performance in some sectors, which particularly has dragged on the performance of consumer-faced companies, such as the outerwear maker Canada Goose.
Canada Goose, as a household luxury parka-maker, has been struggling to sustain growth momentum in several key markets, with analysts questioning its brand positioning and marketing strategy at a time when consumers are becoming cautious about big-ticket apparel purchases.
For the year ended in March, Canada Goose’s revenue fell 1.1% from a year earlier to $1.35 billion Canadian dollars, as sales in its crucial markets including Canada and the EMEA region — comprising Europe, Middle East, Africa and Latin America — declined 2.4%, 1.7% and 12.1%, respectively.
That represented a sharp slowdown in its global revenue growth, which had risen 23.2% in 2022, 10.9% in 2023 and 9.6% in 2024. The sales also decline in China — which hosts nearly half of the company’s global stores — signals a significant downturn compared with a jump of 47% in sales in fiscal year 2024, when China overtook Canada as the company’s biggest market.
Particularly in the latest quarter ending in June, a seasonally slow period for Canada Goose, which posted a bigger-than-expected net loss of CA$125.5 million, widening from a CA$74 million loss in the same period last year.
Amid complicated economic and operational environment, it is hard for company to shrug off all sorts of uncertainties and headwinds, which obviously have significant negative impact on Canada Goose, which further more prompts Canada Goose’s controlling shareholder, Bain Capital, to float the idea of exit. Bain Capital is looking to offload its holding in Canada Goose. All existing offers aim to privatize the company listed in Toronto as well as New York. Private equity firms Boyu Capital and Advent International have made verbal offers, valuing Canada Goose at eight times its 12-month average earnings before interest, taxes, depreciation and amortization, translating into a valuation of around $1.35 billion. Other interested buyers include Bosideng International and a consortium formed by private-equity firm FountainVest Capital and Anta Sports Product. Canada Goose’s New York-listed shares have gained over 21% so far this year, lifting its market value to $1.18 billion, but still far away from its 2018 peak of $7.7 billion, a year after it went public. And the current valuation represents outsized returns for Bain from the reported $250 million level when it took control in 2013. The bid to take Canada Goose private is not surprising, it seems reasonable as going private would give buyers greater autonomy and room to turn around the company, which has been grappling with its competitiveness in some key markets.Complete digital access to quality Glebors financial topic with expert analysis from industry leaders.
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