With $900 parkas, Bain’s Canada Goose goes public
Thursday was a very good day for Bain Capital.
The Boston-based investment firm took Canada Goose Holdings Inc. public on Thursday. After its first day of trading, the maker of $900 parkas worn by celebrities from Toronto rapper Drake to Hollywood Oscar-winning actress Emma Stone was worth almost seven times its value when Bain invested a little more than three years ago.
Shares jumped 40 percent at the open on both the New York and Toronto stock exchanges, and ended the day up about 26 percent. The stock closed at $16.08 on the New York Stock Exchange, with a gain of $3.30.
Bain Capital bought a 70 percent stake in the Toronto company in December 2013 for an undisclosed price. At that time, the company was valued at close to $250 million. It’s now worth $1.7 billion, based on trading in New York.
The company sold 23 million shares Thursday, raising about $256 million, but Bain remains a majority owner. Canada Goose’s chief executive, Dani Reiss, whose grandfather founded the company’s predecessor company 60 years ago, also is an owner.
Ryan Cotton, a managing director in Bain’s private equity group who worked on the deal, believes Canada Goose can survive ups and downs in the economy because people seek out its cold-busting parkas.
“People who are professionally cold turn to Canada Goose to keep them warm,” Ryan said, from polar explorers to the Royal Canadian Mounted Police.
“I’ve had cab drivers in London tell me they saved up their pounds to go buy one,’’ he said.
Fashionistas and 20-somethings with cash in their pockets have flocked to the brand as well, prompting some to wonder whether Canada Goose is too trendy, and costly, to last.
‘‘Plans to expand its direct-to-consumer channel should support superior growth,’’ Bloomberg Intelligence analyst Maja Rakic wrote in a note Thursday. ‘‘The company needs to make further investments soon, which could weigh on profit. Keeping tight cost controls while driving sales will be key.’’
Canada Goose was founded in a small warehouse in Toronto in 1957 as Metro Sportswear Ltd., specializing in woolen vests, raincoats, and snowmobile suits. It was originally a contract manufacturer, which Reiss took over in 2001, and expanded it into a luxury retail brand.
For the nine months ended Dec. 31, Canada Goose reported nearly $270 million in revenue and $34.5 million in net income.
The company sells its coats in major department stores and last year opened retail stores under its own name in New York and Toronto.
Material from Bloomberg News was included in this report.