Canada Goose is selling off its performance brand after only eight years of ownership.
On Wednesday, the outerwear company said it entered into an agreement to sell Baffin Limited to L.P. Royer Inc., a Canadian manufacturer of work and military footwear. Terms of the deal were not disclosed, but the company noted that the transaction is expected to close this month, subject to customary closing conditions.
Dani Reiss, chairman and chief executive officer of Canada Goose, said in a statement that the deal is “about focus” and simplifying the company’s operating model.
“We’ve made meaningful progress evolving Canada Goose into a year-round lifestyle brand, and this gives us the opportunity to continue that momentum by simplifying our operating model, focusing resources on our highest-priority opportunities and drive long-term profitable growth,” Reiss noted. “[Baffin founder] Paul Hubner has done a fantastic job building Baffin into the strong Canadian brand it is today. I’m grateful for everything he and the team have contributed over the years, and I’m excited to see Baffin continue to grow with Royer.”
Founded in 1979 by the Hubner family in Stoney Creek, Ontario, Baffin has spent more than four decades specializing in technically advanced boots. Under its new owners, Royer and Baffin will continue to be operated as two separate brands, under the Royer Group umbrella.
Royer noted that it intends to invest in the Baffin brand and put its manufacturing expertise to grow it around the world. The entire Baffin team will join Royer.
“This combination marks a defining milestone in Royer’s history,” Simon La Rochelle, president of Royer, said in a statement. “Baffin is a brand with real heritage, and we see enormous opportunity to build on that legacy and grow it globally. We’re committed to investing in Baffin and its team.”
Mark Hubner, managing director of Baffin, added that joining Royer is about bringing together two Canadian companies that share the same ideals around craftsmanship, innovation and technical expertise. “I’m excited about what we can accomplish together and the opportunities ahead for the brand,” he said.
Canada Goose bought Baffin in 2018 for $32.5 million Canadian dollars. The deal marked the outerwear company’s entrance into the footwear category, and allowed Canada Goose to gain valuable expertise and infrastructure in the shoe world.
Indeed, it was this transaction that laid the groundwork for Canada Goose to launch its own footwear collection in 2021. Canada Goose’s first two shoe styles, the Snow Mantra Boot and the Journey Boot, officially hit the market in November 2021. By February 2023, Reiss told analysts during an earnings call that the brand’s footwear category had grown 175 percent overall since its launch.
More recently, Canada Goose has been struggling to keep up amid a changing consumer environment. But, in the company’s recent quarter, Canada Goose reported increased revenues and reduced losses, a sign that its multiyear drive to widen its luxury assortment and tighten cost controls is working.
For the first quarter ended June 28, total revenue increased 10.3 percent to $118.9 million Canadian dollars from $107.8 million Canadian dollars, up 8.6 percent on a constant currency basis. The operating loss narrowed to $103.8 million Canadian dollars compared with $158.7 million Canadian dollars in the prior-year period, which executives attributed to higher gross profit and lower expenses across the board.
