Due to weak demand and the arrival of a cold winter in the luxury goods industry, not only did Canada Goose announce 17% layoffs, but many retailers also announced large-scale layoffs. Furthermore, Kering previously warned that sales of its brand Gucci would drop 20%, and the stock price plummeted 14% on the same day.
On March 26, Canadian high-end clothing brand Canada Goose announced 17% layoffs due to weak demand. This layoff involves employees at Canada Goose headquarters.
After the announcement, Canada Goose's stock price fell by more than 3%.
It is currently unclear how many people will be fired. According to a recent securities filing, as of April 2023, the number of employees at the company headquarters increased from 544 in April 2021 to about 915, almost doubling.
In the quarter ended December 31, Canada Goose sales increased 6% year over year, falling short of analysts' expectations. Canada Goose anticipates that layoffs will immediately reduce costs and increase the efficiency and speed of corporate decision-making.
Canada Goose CEO Dani Reiss said in a statement:
“To improve efficiency and profitability, we are adapting our team to ensure that all resources effectively support the company's goals and plans. At the same time, we are also increasing our investments in key areas, including brand building, design innovation, and operational optimization. These strategies will strengthen our high-end brand image and promote the continued growth of our business.”
The luxury goods industry is overshadowed. Not only did Canada Goose lay off workers, but luxury goods giant Kering Group warned on March 20 that “sales of its brand Gucci will plummet 20%”. The company's stock price once fell by more than 14% on the same day, the biggest one-day decline since 1992.
Additionally, in recent months, several retailers such as Under Armour, Nike, Macy's, Wayfair, Hasbro, and Etsy have also announced large-scale layoffs.