What Is The Core Competitiveness Of Canadian Geese?

Due to inflation exceeding expectations, the central bank raising interest rates too fast and the trade war caused by Trump's trade protection policy, the stock market in 2018 will likely have a larger callback (the beginning of February).

In addition, spring and summer are the low season for goose sales, though the market already contains this information.

However, due to the limited holding period of the Fund (Bain Capital invested in geese in 2013), Bain Capital may consider selling the controlling rights of the company (57% stake and 68% voting right) in the next few years, and Canada goose is integrating the sales channel resources under the line to achieve maximum value.

Since 2000, China has witnessed the rapid growth of infrastructure and real estate investment driven by urbanization, according to the world clothing and shoe net.

China's overseas demand at this stage is mainly reflected in the surge in imports of energy and minerals.

At present, the level of urbanization in China is approaching 60%, and has entered the latter half of urbanization.

In the future, the key driving force for China's economic growth, like urbanization, is the growth of the middle class and the upgrading of consumption.

At this stage of development, China's demand for overseas will be reflected in the consumption of high quality scarce products and services.

In the past three months in 2018, Shandong has officially acquired Italy's luxury brand.

Acquisition of French luxury brands with Fosun

。

What is the future of Ruyi and Fosun in Shandong? In the past 5 years, the author has been exploring a problem: how to find a growth investment that is related to the upgrading of China's consumption.

Now, let me tell you a story about a golden goose.

Who is the Canadian geese?

Recently, the popular net red brand Canada goose and general net red are very popular in China.

Dissimilarity.

Goose has a history of more than 60 years, and is a typical family enterprise.

What's interesting is that at every stage of the family, Canada goose is also a start-up company.

The picture is Canada Goose three generation boss.

Back in 1957, 12 years after the end of World War II, Sam Tick, a Jewish settlers from war-torn Poland, finally took root in Canada.

In the past few years, he lived in Toronto and opened a clothing workshop called Metro Sportswear, mainly producing practical winter clothes such as woollen vest and raincoat.

In 70s, Sam's son-in-law David Reiss took over the workshop.

David is a creative boss. He has developed a machine that can automatically fill down eiderdown clothes, greatly improving productivity.

He also changed the company name to Snow Goose.

In 80s, David also issued a polar specialized science clothing - The Expedition Parka (Da Hong).

Thanks to its excellent thermal performance, scarlet became the standard of the US Antarctic expedition.

It is hard to imagine that the scarlet that had nothing to do with fashion actually laid the foundation for canadian goose today's explosive coat, which is closely related to David's son, the current CEO Dani Reiss.

Dani, a university graduate, can be described as a typical rich two generation.

Like many Chinese rich two generations, rebellious Dani did not want to inherit the family business. He thought his coat was ugly and not cool.

He even refused to wear clothes made by himself.

At that time, Dani's dream was to become a writer.

After graduating from college in 97 years, Dani, who had no income, agreed to work for Dad for some time to maintain his life.

During that time, Dani changed his choice and changed the fate of the company.

In fact, Dani's work during this period is mainly about scrapping, and following the sales representatives of the company to Europe to visit customers and listen to the feedback from customers.

But Dani, a talented writer, has a keen instinct for consumer psychology. He finds that European customers have a distant view of Canada's vast wilderness. Having a canadian goose in their hearts is like having a Canadian wilderness experience.

In 2000, Dani finally persuaded dad to change the company name to Canada Goose.

Dani took dad's class and became CEO.

Dani once said, "before dad only focused on producing high quality clothes, and I was good at exploring user experience and telling stories!" Dani's dream was to make the world dream of having a canadian goose.

What is the core competitiveness of Canadian geese?

Recently, the net red brand Canada goose is very popular in China.

Canadian geese, which have a history of more than 60 years, are a typical family business.

What's interesting is that at every stage of the family, Canada goose is also a start-up company.

1 create blue ocean products.

The outdoor brand is originally the Red Sea, and the competition in every subdivision is fierce.

However, Canadian geese have created a new niche market with differentiated products, pricing and marketing.

Differentiated products

With the accumulation of 60 years of history, we have used the craftsman's spirit to make high quality practical coat.

The canadian goose first cut into the niche high-end market, created the brand and word of mouth with the high quality warm performance, attracted the loyal small crowd fans.

Customize differentiated products according to different outdoor temperatures and warmth requirements.

From extreme cold weather to general cold weather, Canadian geese can meet different needs of consumers.

The picture is Canada Goose product category.

Differential pricing of high priced practical coat.

Canadian geese coat prices are generally between $700-$1200, averaging around $900.

Similarly, the functional North Face is generally $200-$300, while the more fashionable Burberry and Moncler are generally $1000-$2000.

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Differentiated marketing

Canadian goose can be regarded as a model of word of mouth marketing.

First of all, polar scientists are the best insulation coat.

Recognised and extremely high purchase rates in minority sectors with wide public influence.

Next, expand the outdoor crowd market, such as film shooting crew, crew and night club security big brother and so on.

When movie stars, singers, dignitaries and business elites see how to keep the clothes and the clothes of the security big brother, it is natural to be able to buy the Canadian geese. The more influential people advertise the Canadian geese free of charge. The goose naturally saves a lot of advertising expenses.

2 Canadian manufacturing and cultural recognition

After Dani took over CEO, a major change was to shut down a small part of the overseas foundry and production business of the company.

When many clothing brands moved their production lines to Asia to reduce labor costs and raise profits, Dani made the opposite choice.

He thinks that the canadian goose's DNA is Canada, which is the same as Switzerland's DNA, which is the core competitiveness of the brand.

3 understand consumer psychology

Canadian goose not only does not discount (discount is basically fake), and the price is rising every year. People who own canadian goose seem to have a luxury that can resist inflation instead of buying an expendable product. People who wear Canadian geese naturally have a sense of identity and pride.

How can a Canadian geese earn money?

Canada goose has two sales channels: retailers and direct battalions.

The most important source of income for Canadian geese is Parka sales.

There are two ways to raise revenue: increase sales and prices of coats and control costs.

In improving sales volume, canadian goose focuses on improving product purchase rate, increasing penetration of new sales areas and key sales people.

In raising prices, Canadian geese show that every year the price increases will bring more demand.

In fiscal year 2017, Canada goose's total income was 400 million Canadian dollars, gross profit 210 million Canadian dollars, gross profit margin was 52.5%.

In fiscal year 2015-2017, Canada's geese had a compound revenue growth rate of 36% and income nearly doubled.

Canada's goose's EBITDA profit margin can also maintain steady growth under constant investment expansion channels and production, reflecting strong consumer demand and optimized operational leverage.

The picture shows Canada Goose's financial data in the past three years.

The canadian goose not only continued to exceed the market average in the third quarter of fiscal year (201710-12), but also exceeded the expectations of the most optimistic investment analysts.

The total revenue in the third quarter was 270 million Canadian dollars, an increase of 27.2% over the same period last year.

Growth comes mainly from self operated channels.

Self employment revenue increased from $7200 million last year to $1.3 billion this year, an increase of 83% over the same period last year.

From a regional perspective, the main contributions come from Boston, London, Calgary and Chicago's newly opened stores and European seven countries.

Gross profit margins also continued to rise, from 57.5% in the same period last year to 63.6%.

Net profit is $6290 million /$0.56 per share, compared with $3910 million /0.38 per share last year.

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You will surely ask if Canada's goose's main income is winter's Parka coats. What should we do in summer? The income of Canada geese does have a very obvious seasonal fluctuation. The average income in the two quarter of autumn and winter (Q2, Q3 fiscal quarter) can account for about 75% of the total annual income. The two quarter of spring and summer (Q4, Q1 fiscal quarter) is off season.

The picture shows the analysis of Canada Goose peak season.

From the operational point of view, Canadian geese are mainly expanding their channels in the off-season. In recent years, they have focused on the expansion of direct channel.

With the proportion of direct sales and the abundance of spring and autumn products, the income ratio of off-season may be improved.

From a production point of view, combined with artificial and intelligent manufacturing processes, Canadian geese are produced throughout the year.

At the beginning of the year, the management will predict the sales volume of the year based on the market. Generally, Q4 will receive orders from various retail channels and use the production quota for the whole year.

How to maintain high-speed growth?

1 changing sales channels

From retail to Direct (to Consumer), online and offline.

In the direct battalion, Canada goose was a Hindu sensation. It did not start business until 2014, and the first entity store was opened in 2016.

Direct sales grew very rapidly, from 3.6% of total revenue in 2015 to 38% in December 2017.

2 developing overseas markets

At present, Canada is the largest market for Canadian geese.

Canada goose has become Canada's national brand.

The average penetration rate of Canada geese is up to 35.2 in every one thousand effective consumer families.

Even in this very mature market, the Canadian geese continued to grow fast.

In fiscal year 2017, sales increased by 63% compared with the same period last year.

The United States is the second largest market for Canadian geese. It is estimated that the effective consumption group in the United States is 5 times that of Canada.

Continuing to increase penetration in the US market is one of Canada's most important strategies.

Last year, Canada geese opened new flagship stores in New York, Boston and Chicago in order to increase direct sales.

More than 10 years ago, when Lululemon began developing the US market, the sales revenue ratio of Canada / us was about 80%/20%, and now the United States accounts for 75%.

In every one thousand effective consumption families, the penetration rate of Canadian geese in the United States is only 5.2, penetration in Japan and South Korea is only 9.5, and penetration in Western Europe is only 3.5.

If we can increase the permeability to half of Canada, we expect the company's sales in autumn and winter to increase by 3 times.

3 canadian goose is more than a coat.

Although Canada's largest source of income is Parka coat (90%), but the company continues to introduce new ideas.

Under the premise of keeping the traditional craftsman spirit of Canada geese, the company has launched the spring and autumn series costumes and accessories, which have also been recognized by fans.

How big is the Chinese market?

Recently, the net red brand Canada goose is very popular in China.

Canadian geese, which have a history of more than 60 years, are a typical family business.

What's interesting is that at every stage of the family, Canada goose is also a start-up company.

1 layout China market

At the quarterly conference call in February, many analysts asked Dani's strategy on the Chinese market.

They are we, continue, to, we, continue, and to. "Looking at our opportunity in China in particular

Canada geese enter the new market generally in three steps:

Enhance brand recognition at the local level.

At present, the Chinese market has formed a certain brand cognition and consumption crowd through purchasing, buying and star effects.

Upgrading retail cooperation network channels.

At present, only Canadian buyers or overseas buyers can buy Canadian geese, but the price is more than 20% higher than direct overseas purchases.

In retail channels, Canada goose needs to find partners.

Accelerate the direct channel, including e-commerce and physical stores.

Canadian geese have no direct channel in China, and are doing some electric business attempts.

It can be seen that the canadian goose is adhering to the conservative and conservative style of Canadian enterprises in the Chinese market.

Although the company did not give specific plans for the Chinese market, it is clear that the company has begun to plan for China.

Public funds and investment analysts in North America may not yet feel the great potential of the Chinese market. Indeed, they are advised to go to the streets of China's second tier cities. People everywhere are wearing Canadian geese. Not only that, but under the condition of very limited formal purchasing channels, the market is flooded with various purchasing agents and various kinds of creative imitation.

The popularity of canadian goose brands is evident in all kinds of genuine Canadian geese.

2 Canadian goose vs. Moncler

The coat has to mention Moncler. As the global fashion luxury down jacket, Moncler has a very good reputation and high-end consumer in China.

Moncler opened its first entity store in China in 2009, and has 26 stores and direct online stores in China.

Although there is no specific figure in the annual report of China's sales growth, it can be seen that Asia (40% of total revenue) is definitely the fastest growing and most potential market.

At present, the Asian market of Canada goose accounts for only about 14% of the total sales volume of the goose.

If you use Baidu index or Google Trends to do a comparison between Moncler and Canada geese, you can find a very interesting phenomenon.

Moncler as the industry leader, in the past few years, regardless of consumer and media attention far exceeded Canada goose, but in the past winter, regardless of the global or domestic, Canada geese for the first time more than Moncler.

With concern beyond Moncler, Canadian geese stock returns also outperformed Moncler in the past winter.

If the degree of attention is ranked by city, a more interesting phenomenon can be found.

The canadian goose is the warmest coat, which should be paid more attention in the colder north.

However, among the top ten cities of Baidu, the first eight cities in Beijing and tenth Shenyang are southern cities. These cities are obviously not as cold as Canada in winter, so there is no need to wear a heavy coat like a canadian goose.

It can be seen that when consumers buy Canadian geese, consumers apparently do not buy them from practical needs.

It's the same as people who drive Land Rover in the city and buy hermes bags.

In addition, consumers in these ten cities pay more attention to Canadian geese than Moncler.

3 how big is the Chinese market?

By 2020, BCG expects China to have about 20 million of affluent families and 80 million of middle-class families.

Based on this, we make some rough and conservative assumptions. We can estimate the sales of Canadian geese in the Chinese market:

A) every family has two potential customers.

B) taking into account the potential customer purchase areas, preferences, climate and consumer psychology; assuming that 50% of affluent families and 40% of middle-class families are potential customers of Canadian geese.

C) consumption penetration in three regions in fiscal 2017: Western Europe (Bao Shou), North America (basic) and Japan and South Korea (optimism)

D) the unit price of affluent customers and middle-class customers is $1500 and $1000 Canadian dollars (equivalent to 7350 yuan and 4800 yuan - equivalent to the price of an Apple phone).

E) China's sales margin in 2020 used the average global profit margin of Canada geese in fiscal year 2017 (Canada's geese's profit margins are rising, and this assumption is conservative).

According to the estimated consumption penetration in Western Europe, the United States and Japan and South Korea in 2017, China will be able to contribute $3600-$9700 million net profit in 2020, equivalent to $0.33-$0.9 per share net profit.

Assuming that the US consumption penetration is the basic case, it is estimated that in 2020 Canada goose can get a net profit of $5300 million in China, which is equivalent to $0.49 per share.

This is equivalent to 120% of Canada goose's global net profit in fiscal year 2017 (2017 of net profit in the year 77%).

However, some analysts say that the comparison has been won by quality, but in recent years, the pformation of canadian goose, which has been repeatedly pressed by animal organizations, to Moncler's move to the fashion industry may be more sensible.

After all, the electricity supplier is only a channel change, and the capture of consumers is ultimately a product. Canadian geese should be vigilant.

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