Cold weather clothing firms from home and abroad bask in warm sales

Cold weather garment makers from home and abroad are stepping up their expansion pace in China to cash in on growing demand from medium - and high-end consumers.

Toronto-based Canada Goose, a leading cold weather apparel maker, has accelerated its expansion in China by opening more brick-and-mortar stores and pop-up shops at shopping centers.

Earlier this month, the company opened its flagship store in Lujiazui area of Shanghai. The outlet features its full collections including the Fusion Fit style that has been designed specifically for Asian consumers. The store is also equipped with a cold room where a low temperature (-25 C) fitting environment offers consumers a chance to experience the functions of the down garment.

In addition to the store in Shanghai, the company has this year opened four pop-up shops in Nanjing, Beijing, Wuhan and Harbin and one permanent store in Shenyang.

Canada Goose Holdings Inc said in its recent earnings report that its strong first half performance was a reflection of its brand strength and the power of its unique business model.

"Through global brand equity, selective distribution and operational flexibility, we have delivered another set of strong results, despite continuing external uncertainties. Alongside continued growth at home, we are making great strides internationally, and we believe we are well positioned going into our peak selling season," said Dani Reiss, president and chief executive officer of Canada Goose.

Strong revenue growth was seen in key markets, with standout performances in Asia, where revenue nearly doubled to C$48.9 million ($36.9 million) from C$26.6 million, and the United States, which rose by 38.5 percent on a constant currency basis. Its second quarter revenue increased by 27.7 percent to C$294 million from C$230.3 million on a yearly basis.

Higher corporate expenses during the first six months were mainly attributable to investments to support growth in marketing, people, technology and expansion in China.

However, despite the long queues in front of some Canada Goose stores as the cold weather swept across northern Chinese cities, the Canadian brand saw increasing competition from domestic high-end down clothing producers like Bosideng International Holdings Ltd. The Chinese company has launched its Extreme Cold collection for the midrange market, with products priced between 1,000 yuan ($142) and 1,800 yuan and the Mountain Climbing collection for the high-end market priced between 5,800 yuan and 11,800 yuan.

According to industry data, sales of medium and high-end products of Bosideng - products priced over 1,800 yuan - accounted for 24.1 percent of its total product sales in 2018. Zhu Gaofeng, who is in charge of the finance department at Bosideng, said prices of Bosideng down jackets rose by 20 percent to 30 percent in 2018 and will continue to rise to reach an average price of between 1,500 yuan and 2,000 yuan this year.

Most of the down clothing product makers in China have gradually raised their product prices from the 700 yuan to 800 yuan range on average to 1,100 yuan to 1,200 yuan range.

Cheng Weixiong, a textile industry expert, told Changjiang Times that Bosideng was forced to increase product prices due to higher raw material, processing and operating costs along with additional expenses for branding, research and marketing.

During the recent Singles Day shopping festival on Tmall, the group's branded down apparel business including Bosideng, Snowflying and Bengen, saw sales rise by 58 percent on the company's Tmall flagship store, and an overall increase in online sales of about 49 percent.

Among them, Bosideng branded down apparel business recorded retail sales of 650 million yuan on the Tmall flagship store, which represented a 58 percent increase. Overall online sales of the Bosideng brand increased by about 43 percent, compared with the same day a year ago.

Bosideng said purchases by its customers aged between 18 to 34 years grew by 50 percent from the same period a year ago.

In terms of product sales, sales of higher price products witnessed a steady increase, especially products priced over 1,800 yuan, of 140 percent on a yearly basis.

Gao Dekang, chairman and CEO of the group, said: "With the brand upgrading of Bosideng, the group is focusing on its principal business and key brands. The retail sales on Singles Day shopping festival reflect the group's successful transition to medium-and high-end markets, and its products are being widely recognized by customers."