"Collateral Damage": Canada Goose Shares Fall 20% As Chinese Consumer Boycott Threatens Sales

The trials and travails facing Western purveyors of luxury goods as they seek to break into the Chinese market have been well documented in the press (see Dolce & Gabbana and Victoria's Secret for two examples of what can happen when retailers hoping to gain entree to the world's largest consumer market cross the Communist Party).

And in the demonstration of the leverage that China's government exercises over Western retailers, shares of Canada Goose are tumbling as Chinese citizens have started a boycott of its goods in retaliation for the arrest of Huawei CFO Meng Wanzhou (the daughter of one of China's most revered corporate titans). Formerly the second-best performer on Canada's benchmark stock index, CG has seen its shares tumble some 20% over the past four days, as investors worry about a lasting impact on sales at two planned stores in Hong Kong and Beijing.

This suggests that China's retaliation for Meng's imprisonment won't be limited to the arrest of a former Canadian diplomat.

(Click on image to enlarge)

And a report in Communist Party mouthpiece the Global Times warned that this boycott could expand to other Canadian firms if Canada doesn't release Meng. One "academic" quoted in the article warned that luxury goods brands are "very likely" to being targeted.

Zeng Mingyue, a research fellow at the Luxury China Institute of the University of International Business and Economics in Beijing, said luxury brands, embedded with high added-value and representing their original countries' cultural backgrounds, are very likely to be targeted when political or cultural friction emerges and escalates.

 Global Times article about the boycott featured quotes from Chinese shoppers who patriotically criticized the Canadian government over its treatment of Meng. One woman said she had been planning to buy a Canada Goose parka until news of the arrest broke.

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Gary Anderson 10 months ago Contributor's comment

Canada is some kind of stupid. I realize that the nation is trying to follow law, but it is following the law of a rogue nation, the USA, which has zero credibility on Iran since it left the treaty. That makes the US "law" just an exercise in power, not in law.