Canada Goose caught in Huawei crossfire as Chinese pitch Canadian product boycott
Canada Goose shares have now been lower 5 days in a row since arrest of tech executive
Canada Goose shares have fallen for five days in a row after the outdoor apparel maker has become a target of Chinese consumers upset by the arrest of a high-ranking technology executive in Canada.
The company has lost 20 per cent of its value since word emerged that Meng Wanzhou, the CFO of Chinese technology giant Huawei Inc. has been detained in Vancouver at the request of U.S. authorities.
The expensive jacket maker has quickly become a style icon in China since the brand launched to much fanfare there last year with its iconic parkas and other winter wear.
But that growth has seemingly hit at least a temporary rough patch this week as users on the Chinese social media website Weibo have proposed boycotting the company's products as payback for Meng's detention in Canada.
The movement gained steam after Chinese state-run newspaper Global Times reported on the boycott proposal.
"They're governed by the state," retail consultant Bruce Winder of the Retail Adviser's Network said, "and the state is going to use whatever it can from an [influence] standpoint to get its citizenry mobilized."
Winder is reminded of similar tactics against Harley-Davidson and Levi Strauss jeans last year, when European governments and citizens were upset about Donald Trump's proposal to raise tariffs on imported European goods.
"The Chinese government is trying to hit [Canada] where it hurts ... and use its citizenry to sort of talk about the boycott to put extreme pressure on Canada to release the executive before she's extradited to the U.S."
Early last week, Canada Goose shares were trading just shy of $70 US a share, but on those same shares were changing hands at $55.26 US when the New York Stock Exchanged closed on Tuesday, off 70 cents on the day.
"Huge amounts of their stock price has been contingent on getting China up and running," Winder said.
"They're picking a company that is one of our ... national champions."
Bloomberg analysts Deborah Aitken and Maxime Boucher said in a report on Tuesday that they think the furor will soon blow over and Canada Goose's prospects remain solid.
Concern over any boycott, "is an overreaction, in our view, as the company is still immature across China and Asia."
They note that currently, the Chinese market makes up only about 10 per cent of Canada Goose's global sales, and the biggest buyers of the products in China are young people. "Its young buyers are likely driven by fashion tastes, not politics," they said.
A request for comment by Canada Goose for this story was not returned on Tuesday.