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Retailing

Canada Goose delays opening its first China flagship store amid tension over Canada’s role in the arrest of Huawei CFO Sabrina Meng Wanzhou

  • Trendy down jacket maker was at start of its push in mainland China – the world’s largest luxury market – when Huawei executive was detained
  • Canada Goose cites ‘construction’ for delay of store opening
PUBLISHED : Friday, 14 December, 2018, 12:50pm
UPDATED : Friday, 14 December, 2018, 11:01pm

High-end down jacket maker Canada Goose is postponing the opening of its first flagship store in China – the world’s largest luxury market – amid growing tensions between Beijing and Ottawa following the arrest of Huawei chief financial officer Sabrina Meng Wanzhou.

The fashionable parka brand cited “ongoing construction” to the South China Morning Post as the reason why its first physical store – in trendy Taikoo Li Sanlitun in Beijing – will not open on Saturday, as originally scheduled. It emphasised it will continue with its plans for a big push in China, where it has gotten a boost from celebrities like billionaire Jack Ma being seen in photos wearing a Canada Goose coat.

The postponement of the flagship store comes as Canada Goose has emerged as one of the highest-profile business casualties in the diplomatic flare-up between China and Canada, which arrested Meng at the request of the United States on fraud charges related to Iran sanctions.

Since Meng’s arrest, China has detained two Canadian citizens, a former diplomat and a businessman, underscoring the escalation of tensions.

Shares of Canada Goose have plunged 20.6 per cent since December 3, the first trading day after news of Meng’s arrest in Vancouver. In China, netizens and state-run media have called for a boycott of Canada Goose products.

The opening of the parka maker’s 600-square metre store was to be a splashy display of its push into the all-important China market. It is to be the 61-year-old company’s first physical store in mainland China.

It opened a “pop-up” store in Beijing last month and launched a push on Alibaba’s Taobao online shopping centre. Alibaba is the owner of the Post. Canada Goose opened a store in Hong Kong in the IFC Mall last month. The company also plans to establish a regional head office in Shanghai.

“Our Beijing store has been delayed slightly due to ongoing construction. We look forward to opening our newest store in the near future,” Canada Goose said in a written reply to the Post.

Canada Goose told the Post it will “continue to move forward with our expansion plans in China. But first and foremost we want to ensure that we provide the best experience for our fans and customers.”

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In May, the firm’s president and chief executive officer Dani Reiss said China offers a “massive opportunity” for Canada Goose.

The Canadian outerwear brand had been on the radar of Chinese shoppers in recent years, in part because of purchases overseas by Chinese tourists.

“Canada Goose’s popularity has surpassed its Italian counterpart Moncler in late 2017, given the brand was quite quiet on Baidu Search Index before 2016,” said Veronica Wang of OC&C Strategy Consultants.

“If the political issue is not further upgraded, the impact on Canadian brands in China will be short-term or limited. At the end of the day, the brand has not done anything wrong in this incident and consumers are aware of that.”

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Canadian companies have been gaining a foothold in China. Popular names include fashion store Club Monaco, sportswear retailer Lululemon Athletica and cosmetics firm M.A.C. Doughnut retailer Tim Hortons plans to open is first store next year in mainland China and aims to have 1,500 branches in 10 years.

On Thursday afternoon, several shoppers at Canada Goose’s pop-up store at Beijing SKP were fairly blasé about the China-Canada row.

A man in his 40s wearing an expensive watch and glittering shoes said there is no need to boycott the brand. “So should we throw away our iPhone and Rolex watch just for such dispute?” said the man who gave only his surname, Liu.

A young couple in their 20s said it will affect their decision a bit. But the overriding factor in their buying, they said, remains the warmth of the coat, which, at the upper end, was priced at 9,800 yuan (US$1,422) in the pop-up shop.

A saleswoman said sales hadn’t been good there generally, even before the tensions.

A woman in her 30s said the Huawei issue makes her less likely to buy a coat, as she tried one on to find a good size. “I can try a suitable one and buy a copied version elsewhere,” she said, with a wink.

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