Canada Goose Slashes Forecast, Deems New Retail Concept a Success
Canada Goose has slashed its 2020 outlook as the coronavirus outbreak impacts the luxury apparel retailer, but said its new retail concept, The Journey, is “a big success.”
Canada Goose opened The Journey in Toronto in December, just in time for the holiday shopping season. The innovative retail concept offers a fully interactive and experiential environment, where shoppers can’t walk out with inventory, but instead are immersed in the “spirit of the outdoors.” The store combines a guided tour of digital content, interactive displays and the Cold Room, where the temperature is set at - 12°C and shoppers are surrounded by floor-to-ceiling Arctic landscapes and real snow. As shoppers finish their journey, they have the ability to browse and purchase the full assortment of Canada Goose online with local same-day home delivery and, according to president and CEO Dani Reiss, they do.
Over 8,000 consumers completed The Journey during three weeks of holiday shopping from December 5 to December 26, Canadian Goose said.
“As we all know, retail is undergoing transformation and success requires new thinking and bold moves,” Reiss said in a recent earnings call.
“We've seen an incredibly strong reception from consumers already,” Reiss noted of the concept store.
“As an experimental omnichannel concept, there are a lot valuable early learnings from the journey that we're reflecting on and it has proven that an inventory-free store environment can be commercially viable for us. [The format] enables our brand ambassadors to focus exclusively on guest experience, education and service. And customers get access to the full depth of our online inventory at a snap of their fingers with same-day delivery. We consider this experiment to be a big success and this concept of something that we are very excited to explore further.”
Meanwhile, the retail slashed its fiscal 2020 guidance, expecting revenue to grow between 13.8% and 15%, compared with its prior forecast of at least 20% growth.
“From the frequent lines outside our stores to the response to new experiential innovations, consumer engagement was consistently strong across all geographies during peak season,” Reiss said in a press release. “While we recognize that we are now navigating a period of heightened uncertainty due to the coronavirus health crisis, we remain confident in our strategy and long-term potential.”
Canada Goose said the health crisis has resulted in a sharp decline in customer traffic and purchasing activity and that both retail stores and e-commerce across Greater China have and continue to experience significant reductions in revenue. In addition, due to global travel disruptions, retail stores in international shopping destinations in North America and Europe are also affected, but so far no supply chain interruptions have occurred.
The company believes that this is a “temporary change” due to “extraordinary circumstances.”
“International traffic from Chinese consumers is essentially shut off due to travel cancellations and restrictions,” said EVP and CFO Jonathan Sinclair. “And for us and for the sector generally, they are the largest buyers of luxury goods.