While some Canadian businesses feel a chill, Canada Goose stays warm . . .
With high tensions governing the discussions on banned Canadian pork and canola exports to China, Canadian businesses are keeping a close eye on the political tensions brought on by Hong Kong’s popular protests. One such business is Canada Goose, whose shares fell over 6.5 per cent just two days after the popular protests began. The dip, however, has been attributed to lower profit margins as the company announced very robust sales in Q1. Canada Goose, although targeted by some boycott sentiment in China following escalating Canada-China trade tensions, noted that the company was monitoring the situation in Hong Kong closely and stated that their stores in Hong Kong and in mainland China have remained open and have continued to perform as expected.
Business as usual . . .
CEO Reiss also noted that Canada Goose’s China plans have not changed, even as trade tensions have begun to taint Chinese public perception of Canadian brands. Indeed, another Canadian entity still engaging successfully with China is the University of British Columbia subsidiary Paragon Testing Enterprises, which just recently signed an agreement with the National Education Examinations Authority of the Chinese Ministry of Education to deliver English language testing services in China. The test is meant to evaluate Chinese students’ readiness for entry into Canadian post-secondary schools, reducing a significant hurdle for those students seeking entry to Canada’s universities and colleges. The Paragon announcement demonstrates the value of long-term engagement strategies with China built on less contentious sectors.
The view from the C-Suite . . .
“Hong Kong protests haven’t hurt Canada Goose,” Reiss proclaimed. A sentiment that unfortunately cannot be shared by Cathay Pacific’s now-former CEO, Rupert Hogg, who just resigned over the handling of a situation involving Cathay employees joining the Hong Kong popular demonstrations and pressure from Beijing to address the issue. More specifically, he warned employees that their employment could be terminated if they supported or participated in illegal protests. This led protesters and supporters to start ‘#BoycottCathayPacific’ campaigns in retaliation. Meanwhile, Hong Kong’s richest man, Li Ka Shing, just published a newspaper ad with the ambiguous message: “The best intention can result in the worst outcome.” Other Hong Kong billionaire tycoons, like brothers Raymond and Thomas Kwok, have come out with strong messages against “violent protesters,” but are still careful not to fully alienate the local populace, as they work in their companies and live in their real estate assets.