TORONTO/BEIJING (Reuters) - Luxury parka maker Canada Goose said it is delaying the opening of its first store in China, originally planned for Saturday, putting its shares on track for their lowest close in six weeks.
The delay was the latest setback for Canada Goose, which is the target of a boycott sparked by the arrest of a Chinese technology executive in Canada.
The opening of Canada Goose’s Beijing flagship store, in the city’s swanky Sanlitun district, has been postponed due to construction work, according to a statement from the company. The statement did not specify when the Beijing store would open, saying the company will update the market as plans progress.
Canada Goose announced its plan to open stores in Beijing and Hong Kong in May, reaching directly to customers whose strong demand had boosted the company’s sales at department stores on the mainland and its outlets globally. It has since opened the Hong Kong shop.
Chinese customers account for more than a third of spending on luxury products worldwide, and are increasingly shopping in their home market rather than on overseas trips.
More recently, however, sentiment has soured on the mainland toward the maker of $900 goose-down coats. Chinese social media users called for the boycott of its products following Canada’s arrest of Huawei Technologies Co Ltd’s chief financial officer.
Meng Wanzhou, also the daughter of Huawei’s founder, faces U.S. allegations that she misled multinational banks about Iran-linked transactions, putting the banks at risk of violating U.S. sanctions. A Canadian court granted her bail on Tuesday.
Some media reports have linked a slump in Canada Goose’s shares and the delay of its Chinese store opening to reprisals against the company by mainland customers for her arrest.
Canada Goose spokesman Alex Thomson did not respond to requests seeking comment on the reports or the share slump.
Canada Goose shares fell as much as 4.7 percent and were trading down 2.8 percent at 10:46 a.m. EST (1546 GMT) in Toronto, capping a 22 percent slide since Dec. 5 when news of Meng’s arrest first broke.
Earlier this week, the hashtag “Canada Goose share plunge” became the second-most trending topic on the Twitter-like Chinese microblogging website Weibo with 1.15 million mentions, after Chinese media reports on how the Huawei dispute had hammered the company’s shares. But it did not come up as a top trending topic on Friday.
“With these high-growth, high-valuation, high-expectation stocks, the tiniest little change in sentiment may have an outsized impact on the price,” said Brian Madden, portfolio manager at Goodreid Investment Counsel, who does not own Canada Goose shares. “Even the mere hint of a suggestion that Chinese people may boycott can take ten multiple points off a high-expectation stock like this.”
Reporting By Nichola Saminather and Yawen Chen; Editing by Chizu Nomiyama and Jonathan Oatis