GOOSE GOOSE DUCK CANADA GOOSE SERIES

Instead of a plethora of items being marked as “sold out” on the website, customers should be able to place orders. Rather than producing inventory over the course of 12 months, Canada Goose should take a leaf out of the books of fast fashion players and try to be more responsive to customer demand. Over the medium term, the overarching goal for management should be to increase the overall flexibility of Canada Goose’s supply chain to better serve the needs of customers. For example, in the short-term, the organization should seek to become a true omni-channel business by increasing integration across channels rather than treating its e-commerce sites and brick-and-mortar stores like external wholesale customers, which results in inventory being stuck in a channel rather than finding its way to the consumer. While management continues to build Canada Goose’s DTC business, it would be prudent to simultaneously also take some additional steps to concurrently evolve Canada Goose’s supply chain. Over the medium term, management has made clear that it intends to harness the wealth of data generated by DTC sales, but they have acknowledged they are very much in the early stages of this process and, notwithstanding, their intentions also appear to be more focused on using this data predominantly for consumer facing marketing initiatives rather than for optimizing Canada Goose’s supply chain. Nonetheless, management’s belief in the advantages of a flexible supply chain and desire to increase the proportion of in-house manufacturing indicates the company is taking some steps to address supply chain concerns in the short-term. How management is addressing the concern (or not)Īs Canada Goose has recently publicly listed and is still growing rapidly, management understandably appears to be much more focused on continuing to expand DTC and other top line initiatives rather than evolving the company’s supply chain. The proliferation in SKUs as the company seeks to expand beyond parkas further exacerbates these risks.

Given Canada Goose’s parkas retail at $1,000, excess inventory or foregone sales can rapidly mount. If Canada Goose incorrectly forecasts volumes, it may be left with excess inventory or miss out on potential sales.

In contrast, under the DTC model, Canada Goose bears the risks for inaccurately forecasting demand. While retailers may order too much or too little, Canada Goose is effectively insulated from these risks as its demand is fixed.

This revenue model significantly de-risks Canada Goose’s near-term operations by providing very clear visibility into sales, which allows Canada Goose to optimize its supply chain as order quantities are fixed. Under its traditional wholesale model, Canada Goose typically receives orders by March, produces inventory throughout the year, and ships finished goods to retailers ahead of the winter.

GOOSE GOOSE DUCK CANADA GOOSE SERIES

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