#记录我的2024#在世界羽绒服市场上, Canada Goose and Moncler can be called the two giants, Canada Goose has attracted much attention in China over the years, but just recently Canada Goose laid off 17% of its staff on the hot search, everyone can't help but ask what happened to LV in the down jacket industry?
1. Canada Goose layoffs of 17% on the hot search?
According to a report by Jiemian News, Canada Goose, a Canadian down jacket brand, recently announced that it would lay off 17% of its staff, mainly for office employees, but did not disclose the specific number of layoffs. Canada Goose shares fell 3% after the layoffs were announced. Over the past 12 months, the stock price has fallen by 12%.
Dani Reiss, CEO of Canada Goose, said the team is currently being realigned to ensure that the resources on hand can drive the brand's further growth across geographies, channels and product types. "The decision to lay off employees was a tough one, but it was also the right one to put our business in the best position for the future. He said.
According to the financial results for the third quarter of fiscal year 2024 released in February, Canada Goose sales revenue increased 6% year-over-year to C$610 million in the three months ended December 31, 2023. The Asia-Pacific market, including China, recorded a 61.5% increase in revenue, with a total sales revenue of C$271 million, surpassing the North American market for the first time.
However, in Canada, the U.S. and EMEA, sales revenue fell 13.1%, 13.8% and 25.9%, respectively, mainly due to lower sales in e-commerce and wholesale. In the earnings report, Canada Goose expects revenue of C$1.285 billion to C$1.305 billion for the full fiscal year 2024, an increase of 5.6% to 7.2% from the previous year.
Compared to the past, this is not a bright number. According to the plan, Canada Goose will achieve the goal of sales revenue exceeding $3 billion in 2028. As a result, it had to grow its sales by about 20% a year, but now the growth rate has slipped to single digits. There is a high probability that the goal will be missed.
2. What happened to LV in the down jacket industry?
Recently, the news of Canada Goose's 17% layoff has attracted widespread attention and has appeared on the hot search list of major social media. As the LV of the down jacket industry, Canada Goose has always won the love of consumers with its high quality and high price. However, this layoff seems to be a harbinger of unprecedented challenges for the once-glamorous luxury brand, so what should we make of it?
First of all, Canada Goose's recent announcement of a 17% global layoff has caused heated public opinion and social attention in the short term, but it is not particularly surprising to those familiar with its performance trends in recent years. Over the past few years, Canada Goose's growth momentum has slowed significantly, which is clearly reflected in its financial reports. In the face of the fluctuation of the global economic situation, changes in consumption habits and intensified competition, even Canada Goose, which was once known as the "LV" of the down jacket industry, cannot avoid the flattening or even declining growth curve.
Secondly, and most critically, the cold third fiscal quarter is usually the season for down jackets, which usually accounts for about half of Canada Goose's annual revenue, but sales have fallen in other markets around the world except for the Asia-Pacific region. This shows that the sales performance of Canada geese in the global market is not ideal. Especially in the European market, the demand for down jackets is gradually weakening due to climate change and consumer concern for environmental protection. In addition, Canada Goose also faces competition from other high-end brands in the European market, such as Moncler. All these factors have led to a decline in sales of Canada Goose in the European market.
Third, the Canada Goose layoffs come against the backdrop of a general cold winter in the luxury industry. Affected by macroeconomic instability, fluctuating consumer confidence and the acceleration of digital transformation, the growth rate of the global luxury market has slowed down, and consumers' purchasing power and willingness to purchase have been inhibited to varying degrees. Kering's Gucci, as well as many other well-known brands, have also issued performance warnings or implemented cost-cutting measures, indicating that the industry as a whole is facing a huge test.
For Canada Goose, even during core sales periods such as autumn and winter, the decline in performance has exposed the challenges the brand faces in maintaining consumer loyalty and attracting new customers. On the one hand, consumers may begin to question the high price point of Canada Goose products, especially in the face of increased economic uncertainty and the return of rational consumption, on the other hand, the rise of emerging brands and the upgrading of product innovation and marketing strategies of established competitors have squeezed the market share of Canada Goose.
Fourth, Canada Goose has performance problems in the fall and winter, which is a deeper reflection of the brand's own problems. As a global luxury brand that has just grown from a regional brand, Canada Goose still has a long way to go in terms of brand building, market positioning, product innovation, etc. High-end luxury goods not only require high prices, but also require a full range of brand design, including unique cultural connotation, exquisite craftsmanship, excellent wearing experience and good after-sales service. Canada geese clearly need to be strengthened in these areas.
In addition, Canada Goose also has some problems in marketing and brand building. In recent years, the brand has been repeatedly questioned by consumers and the media due to product quality and after-sales service issues, which is undoubtedly a huge blow to a high-end luxury brand. In the highly competitive luxury market, brand image and word-of-mouth are crucial, and once damaged, it is difficult to recover in a short period of time.
Therefore, the layoffs of Canada Goose are not an isolated incident, but reflect its strategic adjustment and response in the face of multiple internal and external pressures. In order to stabilize its position and take off again in the changes in the luxury market, Canada Goose not only needs to work cost control and operation optimization, but also needs to carry out comprehensive reform and upgrading in brand differentiation, product innovation and market strategy. Only in this way can we truly get rid of the current predicament and win the right to speak in the future market.