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Apparel company Canada Goose saw its stock price rise precipitously following Aug. 26 news that Bain Capital was looking to sell its holding to PE firms looking to take the enterprise private (although shares tumbled by ~6% as of early afternoon Aug. 28, the five-day gain stood at +19.15%), per CNBC.
According to reports, Goldman Sachs is advising on the potential sale by Bain Capital, with a verbal offer having been made by private equity firm Boyu Capital — and Advent International having engaged in talks related to the matter with Bain as well. Both entities have ostensibly valued Canada Goose at "around eight times its 12-month average earnings before interest, taxes, depreciation and amortization," as CNBC outlined, or approximately $1.35 billion. That's still higher than the market value of Canada Goose as of Aug. 26, which came in at $1.18 billion.
A pair of other interested parties — Bosideng International, and a consortium helmed by FountainVest Capital and Anta Sports Product — are also in play, per sources cited by the outlet.
Bain owns about 55.5% of total voting power concerning Canada Goose, meaning that a handover of its multiple voting shares would mean control for the eventual (potential) purchaser. Bain has held control of the company for more than a decade (12 years, in fact), which is in excess of the usual PE investment cycle lasting between five and 10 years.
“Bain’s Canada Goose deal represents a classic PE fund cycle — acquiring the brand, taking it public and now looking to exit,” said an anonymous industry insider quoted by CNBC. The same insider noted that an exit after 12 years was "far from ideal."
Canada Goose Sees Slowing Momentum, Difficulties in China
Overall, business has been challenging as of late for Canada Goose. For the year ending last March, company revenue tumbled 1.1% on a constant currency basis versus a year prior, to $1.35 billion CAD. Sales also declined in Canada, China, and EMEA markets, with the sales decline in China — down 1.7% posted against a 47% climb in FY 2024 — signaling trouble, particularly as China overtook Canada as the brand's largest market.
Further, taking stock of the latest quarter which wrapped up in June, Canada Goose registered a larger-than-anticipated net loss of $125.5 million CAD, deepening from a $74 million CAD loss posted the year prior.
Yaling Jiang, founder of consumer consultancy firm ApertureChina, weighed in on the company's current situation.
“The problem with Canada Goose is that it neither does functional wear particularly well nor fashion particularly well from the consumer perspective,” Jiang stated, per CNBC, adding that the company often opts for middle-of-the-road brands and celebrities in terms of their marketing and advertising efforts. Further compounding the issue, according to Jiang, is Canada Goose's recent propensity for refocusing energy away from its core winterwear offerings, meaning "the brand feels rootless and faceless.”
Finally, Canada Goose has highlighted that U.S. tariffs could lead to price hikes as a result of material and compliance costs -- and while the company opted to withhold this year's fiscal forecast due to trade uncertainties, it did indicate it was in comparatively good shape given that 75% of its products are manufactured in Canada, and exempt from U.S. tariffs due to being compliant with the USMCA.