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Canada Goose debuts on the trading floor on the right foot: up 25 percent and rising

By Angela Gonzalez-Rodriguez

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Management |ANALYSIS

Canada Goose started trading on both the New York Stock Exchange and the Toronto Stock Exchange (TSX) o March,16 after launching the biggest IPO to date this year.

The maker of Arctic luxury apparel began trading on TSX last Thursday under the symbol TSX:GOOS, materialising the IPO year-to-date 2017 on the Canadian stocks exchange. The Toronto-based business went public with its shares opening at 18 US dollars on the New York Stock Exchange.

Shares closed the day up more than 25 percent, slightly above 16 US dollars, marking the second biggest IPO debut of 2017. Portfolio Management Corp Managing Director Norman Levine said the surge in Canada Goose shares did not surprise him, but he wondered whether they would remain at that level. "The history of new issues is not good in Canada," he said in a note to market echoed by NASDAQ.

It’s worth recalling that Canada Goose priced its initial public offering of 20 million shares at 17 Canadian dollars apiece (circa 12.78 US dollars), according to a source familiar with the matter quoted by the CNBC. That price was above an initial expected range of between 14 – 16 Canadian dollars.

Canada Goose stock closes first day of trading up by over 25 percent

The IPO raised 340 million Canadian dollars, or about 255 million US dollars.

"TSX is extremely proud to welcome Canada Goose to the market. Made in Canada and an iconic global brand, TSX is pleased to support the company as they enter their next phase of growth," said Ungad Chadda, President, Capital Formation, Equity Capital Markets, TMX Group.

"At TMX, we love seeing great Canadian companies create global consumer brands - and our role is to help them access the capital and liquidity they require to execute their strategies and drive their future success. We congratulate Canada Goose on their IPO and global leadership position."

According to market experts, investors in Canada Goose have the confidence that the retailer can grow international sales of its flagship coats, and that it can expand into new products, said Bruce Winder, partner and co-founder of Toronto-based consultancy Retail Advisors Group.

“Investors have to be careful because there’s always that first day of trading halo,” Winder said. “The jackets across the world will work. It’s more about the other things and how much they are banking on that,” said Winder.

Looking ahead, the company plans to expand into markets including knitwear, footwear, hats and gloves as well as travel gear and bedding in the coming years, according to the deal prospectus. Canada Goose’s CEO Dani Reiss said in an interview with Bloomberg that it will do so thoughtfully, to avoid the brand dilution seen at other retailers that expanded too quickly.

Picture:Corey Joseph for Canada Goose, Canada Goose Web

Canada Goose