Is Canada Goose cooked? Shares slide as Chinese buyers demand boycott over arrest of Huawei CFO Sabrina Meng Wanzhou
- Shares of high-end down jacket maker Canada Goose have plunged nearly 20 per cent since the arrest of Sabrina Meng Wanzhou in Vancouver on December 1
Growing tensions between Beijing and Ottawa over the arrest of Huawei CFO Sabrina Meng Wanzhou have inflicted damage on the luxury clothing retailer Canada Goose, as Chinese consumers call for a boycott of the brand.
Shares in the company have plunged nearly 20 per cent since the arrest on Meng in Vancouver on December 1. A Canadian judge granted bail to Meng on Tuesday.
The company’s slide in the stock market comes amid reports that a former Canadian diplomat, Michael Kovrig, has been detained in China. He is facing accusations of harming state security, according to Chinese media.
Analysts had warned that Canadian businesses could face increased pressure if China takes punitive measures over Meng’s arrest, which was made at the request of the US, which seeks her extradition on fraud charges related to alleged breaches of sanctions against Iran.
In recent years, a number of flagship Canadian companies – including the train manufacturer Bombardier and doughnut retailer Tim Hortons – have sought to make inroads in China, a coveted and largely untapped market for Canadian companies.
Canada Goose, famous for its down parkas, appears to be the first casualty of the diplomatic row over Meng: calls for a boycott spread quickly on the social media platform Weibo and were echoed by state-run media.
“You look at Canada Goose and it says Canada right in it,” said Bruce Winder, co-founder of the Retail Advisors Network. “It’s very easy for people to sort of pick up on that.”
The apparel company is set to open its first physical location in Beijing in the coming days. Dani Reiss, the company’s president and CEO, was in the Chinese capital last month, and the day before Meng’s arrest he told the Globe and Mail: “We definitely have a lot of brand recognition here, which is great.”
China makes up 10 per cent of the company’s global sales – but the company has hoped to increase in the coming years, with Reiss calling the expansion potential “absolutely massive”.
As of Monday, Bosideng – a rival Chinese apparel company – has seen its stock reach five-year highs.
Canada Goose did not respond to a request for comment.
“I hope it blows over the next couple days,” said Winder. “But it all depends on sentiment. It could get worse and you might see other companies become boycotted as well.”