The luxury parka maker Canada Goose is doubling down on its brick-and-mortar strategy at a time when many retailers are scaling back physical locations. Yesterday, the Toronto-based company announced plans to open 20 new flagship stores across North America and Europe by late 2025, representing their most aggressive retail push since going public in 2017.
Behind this expansion lies a complex calculus of brand control, shifting consumer preferences, and margin protection. “We’re seeing a fundamental return to experiential retail,” explains CEO Dani Reiss during the company’s quarterly earnings call. “Our direct-to-consumer channels consistently deliver 70% gross margins compared to 45% through wholesale partners.”
This retail push comes at a precarious moment. The company reported a 12% increase in operating costs during the most recent quarter, driven primarily by supply chain disruptions and rising commercial real estate prices in urban centers. Canada Goose’s signature down-filled parkas—some retailing north of $1,200—rely on specialized materials whose costs have surged nearly 18% year-over-year according to figures from StatCan.
Industry analysts remain divided on the wisdom of this approach. “Canada Goose is essentially betting against the e-commerce tide,” notes Vanessa Lee, retail sector lead at RBC Capital Markets. “But their internal data shows conversion rates three times higher when customers physically interact with their products.”
What makes this expansion particularly intriguing is its timing against broader retail trends. According to the Retail Council of Canada, national vacancy rates for premium retail locations hit 15.2% last quarter—the highest in a decade. Canada Goose appears to be capitalizing on this tenant’s market, securing prime locations in cities like Chicago, Milan, and Vancouver at what Reiss described as “advantageous long-term rates.”
The company’s strategy hinges on a designer collaboration program launching alongside the store openings. Called “Northern Artisans,” the initiative pairs Canada Goose’s technical expertise with limited-edition designs from fashion houses and indigenous artists. Early partnerships include Scandinavian minimalist brand Acne Studios and Inuit designer Victoria Kakuktinniq.
“Luxury consumers aren’t just buying products anymore—they’re buying stories and experiences,” explains Michael Budman, co-founder of Roots, another iconic Canadian outerwear brand. “Canada Goose’s expansion isn’t just about selling more coats; it’s about controlling how their brand story gets told.”
The retail landscape Canada Goose is wading into looks markedly different from even two years ago. Post-pandemic shopping behaviors show a bifurcation between convenience-driven e-commerce and high-touch, experiential retail. The middle ground—basic brick-and-mortar without distinctive experiences—continues to erode.
Canada Goose’s financial outlook reflects these complexities. While projecting revenue growth between 8-10% for fiscal year 2025, the company acknowledged that capital expenditures would increase by approximately $45 million to support the retail expansion. Investors responded cautiously, with shares trading down 3.2% following the announcement.
The company’s expansion plans also include technological investments aimed at bridging online and in-store experiences. Each new location will feature what the company calls “climate chambers”—specialized fitting rooms where customers can test parkas in simulated arctic conditions as low as -25°C. An accompanying mobile app will allow shoppers to book personal styling appointments and skip checkout lines.
“This is definitely swimming against the current retail wisdom,” observes David Soberman, marketing professor at the University of Toronto’s Rotman School of Management. “But Canada Goose has always positioned itself as contrarian. Their products are designed for extreme cold in an era of global warming, after all.”
The luxury outerwear market presents a unique case study in pandemic recovery. While overall apparel sales struggled with supply chain issues and changing work norms, premium outerwear brands like Canada Goose, Moncler, and Arc’teryx have seen resilient demand, particularly among affluent consumers less affected by inflation pressures.
For Canada Goose, geographic diversification appears key to mitigating risk. Of the planned 20 new locations, eight will be in Asia-Pacific markets where the brand enjoys particularly strong cachet among younger luxury consumers. The company’s sales in China grew 23% last year despite broader economic headwinds in the region.
“We’re watching this expansion closely,” says Terry Henderson, portfolio manager at Mackenzie Investments, which holds Canada Goose shares. “Their ability to execute while managing rising costs will determine whether this is brilliant counter-positioning or an overextension.”
As we head into the crucial holiday selling season, the outerwear market faces additional uncertainties from unpredictable weather patterns. Unusually warm winters have previously dampened seasonal sales for Canada Goose, though the company has gradually expanded into lightweight apparel and accessories to reduce this dependency.
For a brand that built its reputation on extreme weather protection, Canada Goose now faces its own perfect storm of rising costs, changing consumer behaviors, and retail industry flux. Their bet on experiential retail may prove either remarkably prescient or painfully costly—likely by this time next year, we’ll know which.
