Luxury winter coat brand Canada Goose is feeling the chill as Chinese brand Bosideng's sales heat up, with the former seeing a slump in sales that analysts have linked to the arrest of Huawei's Chief Financial Officer Meng Wanzhou.
Shares of Canada Goose Holdings Inc, the maker of premium parkas, slumped almost 20 percent during the past week on the Nasdaq.
During the same period, Hong Kong-listed Bosideng International Holdings Ltd surged 14 percent to a five-year high.
Canada Goose's stock price had fallen by around 20 percent in the week since Meng Wanzhou's arrest. /Image via Reuters
Analysts noted that the fluctuation of Canada Goose's stock prices has been impacted by recent criticism of its use of animal products, while others attributed the slump to the detention in Canada of Meng Wanzhou, chief financial officer of Huawei Technologies Co.
On Sina Weibo, there was a mixed reaction to news of a slide in Canada Goose's stock price. One user commented "they arrested our person, so we're liberating their geese! This is how we balance the books!"
Another said "this fall in the share price has nothing to do with me, I can't afford these coats!" Canada Goose coats sell for around 9,000 yuan (1,310 U.S. dollars) on the brand's Tmall store.
If Canada Goose is suffering a backlash over the detention of Meng Wanzhou, other major Canadian firms like cinema chain IMAX have so far escaped unscathed. The company, which operates more than 880 cinemas across China, has seen its stock price increased by almost seven percent in the past week.
Canada Goose announced plans to expand in China earlier this year, establishing an office in Shanghai.
It now has an online presence via Chinese e-commerce platform Tmall and operates an offline shop in Hong Kong. A new flagship store will be launched in Beijing this month.
Animal cruelty protesters outside the Canada Goose store in New York on Black Friday, November 23, 2018. /VCG Photo
"This was the right time for us to open a headquarters in China," Dani Reiss, chief executive officer of Canada Goose, said recently.
"We've been interacting with Chinese consumers even from the online environment and our global stores. We know we have a high brand awareness here. And the new move will help offer that experience in this country," Reiss added.
According to Alibaba, around half a million people visited Canada Goose's online store on Tmall during Singles' Day on November 11. During the annual shopping frenzy, consumers spent more than 10 million yuan (1.5 million U.S. dollars) in around an hour on Canada Goose's Tmall shop.
For the second quarter ending September 30, Canada Goose reported a 33.7 percent year-on-year growth in revenue, reaching 174 million U.S. dollars.
In recent years, Bosideng has looked to accelerate its upgrading strategy, seeing a significant increase to sales.
During the first half of the year, the company's revenue increased 16.4 percent to 3.44 billion yuan (500.5 million U.S. dollars).
Revenue for its branded down apparel business segment jumped by 19.5 percent year-on-year to 1.77 billion yuan (257.5 million U.S. dollars).
(With inputs from China Daily)