Canada Goose’s strategy is changing, making investors nervous

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Canada Goose Holdings Inc. shares fell 12 percent Wednesday as investors were concerned about the outfitter’s shift in strategy to avoid third-party retailers.

person holding pencil near laptop computer

It was the biggest drop in its stock’s value since the start of pandemic, despite Canada Goose not changing its financial forecast for Q2. According to the company, the third and fourth quarters are expected to be more positive.

Canada Goose strategy “fundamentally alters the revenue pattern” of the business, Jonathan Sinclair, Chief Financial Officer, stated on a conference call with analysts.

laptop computer displaying Mango pants

According to the company’s representatives, lately, all luxury brands are increasingly downsizing wholesale operations and are investing more in digital transformations and omnichannel strategies. And the sales from owned store networks provide powerful data for brands, including which products consumers are responding to and who its customers are. Moreover, prices can be controlled without the need to fight discounting from departmental stores or third-party retailers.