Canada Goose, a luxury clothing manufacturer founded in 1957 and based in Canada, completed its Initial Public Offering (IPO) last month by floating its shares in the equity markets. With minutes after going public, its stock price jumped by over 25%.
With clothes offered at often astronomically high prices, one does not always associate a humble origin with the luxury coat maker. However, over three decades ago, Canada Goose was a small mom ‘n’ pop clothes store in Toronto, where it sold its first ever “Snow Goose” designer coat made with high-quality Canadian goose down feathers, a product that loyalists swear by and love. In 2017, its products are priced at nearly $1,000 and are taking the wealthy by storm.
Since its inception, the company has grown rapidly. Its annual revenue has shot up from $5m in 2001 to $150m in 2013, a stratospheric increase of 2,900%. Coincidentally, in 2013, Bain Capital, a large and prominent investment firm purchased a large share in the company at a reported $250m valuation. Bain Capital seems to be reaping the rewards of this investment today, as by the end of its first day in the public markets Canada Goose was valued at almost $2bn.
The IPO Market Heating Up
This year, there have already been notable IPOs taking place with Snapchat listing in a monumental $24bn IPO and now Canada Goose following suit as well. Although the latter’s IPO was not as valuable, it still stirred up the market and generated considerable demand from investors for the stock. Some of the other significant IPOs that have already taken place and those that are likely to occur in the future are listed below.
- Mulesoft – Offering 13 million shares priced at $17 on the New York Stock Exchange, the company went public in March this year under the ticket ‘MULE’. At close on day one, the shares were valued 45% higher than their listed price, beating Snapchat’s best first day IPO gains this year.
- Carbon Black – this company makes antivirus software and other security related products. It filed its IPO paperwork last fall and its most recent private funding round reportedly valued the company at $600m.
- AppNexus – an ad-tech firm, AppNexus was last valued at almost $2bn in 2015. Similarly to Carbon Black, it too has filed its IPO paperwork confidentially and is allegedly aiming for a valuation between $1.5bn to $2bn.
- ForeScout – a security startup, the firm helps customers see and manage their devices and is aiming for a listing within the next few months. Its previous valuation sat at a handsome $1bn.
Canada Goose Sets Itself Apart
2017 has been a difficult year for many other retailers such as UnderArmour but Canada Goose seems to be having no trouble at all. Investors are grabbing hold of its shares with fervour, the company’s profits are still growing and it directly sells an increasingly large proportion of its own clothing both in stores and online.
However, to sustain this level of growth, Canada Goose must increase the variety of its offerings. After all, given its price point, one is unlikely to buy a new jacket from them every winter. However, this is easier said than done because given its focus on only winter apparel it might not be able to diversify its product stream effectively.