Trendy Outerwear Maker Canada Goose Preparing for IPO

Canada Goose, the maker of trendy down-filled parkas that cost $1,000 apiece, is preparing for an initial public offering, in a sign that an uptick in the new-issue market could continue.

The Canadian company is interviewing potential underwriters for an offering that could value it at around $2 billion, according to people familiar with the matter. That would put it on track for a debut early next year. There is no guarantee an offering will take place as any number of factors, like a renewed bout of stock-market volatility, could get in the way.

Should Canada Goose pull off the share sale, it would give it broader access to capital for growth and provide a path for private-equity firm Bain Capital to begin exiting its investment in the apparel company.

Founded in 1957 as Metro Sportswear Ltd., Canada Goose got its start making woolen vests and snowmobile suits from a small warehouse in Toronto. Over the years, it found a niche following among film crews shooting in frigid climes. Lately, it has attracted fashion-savvy consumers looking for winter-weather gear and willing to pay a hefty price for it. In May, the company announced its first stand-alone retail stores, in Toronto and in New York's tony Soho neighborhood.

Canada Goose sold a majority stake to Bain in 2013 for an undisclosed sum. Dani Reiss, the company's chief executive and grandson of its founder, Sam Tick, retained a significant minority stake.

Trendy apparel brands have benefited from robust investor demand lately. Lululemon Athletica Inc.'s stock is up 11% this year, while shares of Moncler SpA, a clothing maker that has large network of retail stores, are up 17%. Under Armour Inc. has risen more than twentyfold since its 2005 IPO, though the stock is down from its September 2015 high.

The IPO market is starting to show signs of life after suffering through a sluggish year, with 17 companies selling shares on U.S. exchanges in September, according to Dealogic. That makes it one of the busiest months this year. Yet despite the pickup, U.S.-listed IPO activity is still on pace for its slowest year since 2009.

Should the recent upturn be sustained, it would be good news for firms like Bain that depend on the IPO market to exit investments and return cash to their own investors.

One of the most highly anticipated debuts this year is that of another hot consumer brand, Yeti Holdings Inc., which makes high-end coolers.

Write to Matt Jarzemsky at [e-mail] and Maureen Farrell at [e-mail]

(END) Dow Jones Newswires

October 07, 2016 16:05 ET (20:05 GMT)

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