If you thought the J Jill IPO was a winner…wait til Canada Goose prices next week.
Clearly…GOOS a more defendable brand than J Jill. But more COLM than Moncler. Not even as good as Arcteryx (also Canadian -- owned by Amer Sports - and perhaps the best performance brand out there).
So Brand is good -- for now -- but the company is over-earning. Remeber Crox, Coach, Kors? All printed way too much EBIT. That creates a brand problem at a point.
GOOS is also looking to price at 4x revenue with ZERO margin optionality.
This is a 98% wholesale model tied to the Neimans of the world. The only growth is to….
a) Go downstream – which is horrible without the right price/value tiering (takes decades to build and GOOS does not have it).
b) Open stores – a lot of ‘em. The only way to do that is to make this a ‘lifestyle brand’. Mr. Goose, you are NO Moncler. Good luck with that.
This does not end well.
Is it a short on Day 1 like JILL? Probably not. The reality is that as the company channel fills downstream in Nordstrom, Macy’s and (yes) ultimately KSS…it will have some top line growth – albeit decelerating. Heck, Columbia was a good stock for a while. GOOS has limited technical merits, unlike COLM. But still…
A Bull can make the case that someone will buy GOOS. Then why didn’t someone buy it from Bain when Goldman (or one of the 12 banks on the deal) tried to shop it?
