See what the Asians Are Buying

If you want to get an idea of how highly regarded a luxury brand, see what ethnicity is buying it. This is probably very obvious to some. I'll give a quick example here. 

I haven't invested in any stocks to date, but I remember this particular one that I thought was a great one to buy in fall 2017. This is Canada Goose. 

I haven't really followed the company since 2018 fall. But I first came across this company when I was at grad school and noticed some folks at school wearing a brand that had a very distinctive, subtle logo and looked really warm. I remember doing some preliminary qualitative and quantitative research on it: turned out that company was an old Canadian company (established in the 1950s), but had really had a turn around in its perceived outlook, since Bain Capital bought it, and got some folks to endorse it, including Bond, Royal Family of Sweden. A jacket that in 2008/09 was relatively cheap was now retailing for 2 to 3x of that (had some friends who bought it in Toronto when they were undergrad students and had really bought it for a bargain).  The marketing strategy had me hooked, and back then I hadn't worn it, so I couldn't really tell how it differed from the likes of  North Face and all. 

I was in Chicago when the company opened its first store there in October 2017, and bored out of my mind, I decided to go visit it. I was maybe a month late into visiting it, but I went there on a weekend. And damn this store had some traffic there! Even though I can't recall now whether there were other high-end retail stores in its vicinity (I don't think so though I can check this via Google Maps now, but can't be bothered), there was a big que to just get in. And I would be willing to wager here (based on my memory) that 90% plus of the folks were Asians (East Asians, South Asians). When I went into the store, I noticed such a high turnover, folks, who were in, didn't really give two hoots about the price -- meaning purchasing decisions were made independent of prices. Now, I have been to many DTC retail stores in my life including in London and Chicago, but never have I seen a turnover or enthusiasm for a brand like the one I saw that day. It was jammed, and everyone, who was leaving the store, was leaving with something (this was very important to me). I thought it had a cult like following. At that point, even I wanted to get something, and I remember eying a limited edition jacket (they didn't release a similar design until at least a few months later), which a few folks were already looking to buy it, and I am grateful that we didn't have to engage in a price-bidding war for that. Lot of new money in Asia, and people like flashing money there, especially in Hong Kong. Again I am generalizing here, but that's ok for this purpose. Nothing wrong with flashing your money, to each his own, though I consider it distasteful. Sometimes by flashing, you can get a sense of who around you are material status / gold diggers.  

Funny enough, the same day, while I was there, there were protests happening outside the store, where one animal-rights group was berating folks loudly for buying CG's jackets, including yours truly, but that didn't damper the mood of consumers at all. I can't recall whether I asked some Asian customer this, or if I eaves dropped in on some conversation, but I got a very good sense that in addition to other things, this jacket was considered a status-signaling symbol in Asia (though Moncler jackets I think retailed for more then). To expand on the status signaling point, as soon as temperatures dropped below 10C, folks would bring out their Canada Goose jackets and flash 'em. The 10C is a hyperbole here, but I think it illustrates the point of perceived "brand power". 

I can't recall now what other brands' shopping bags did I see that day in the Canada Goose store to get a sense of cross-pollination. I have been to one CG store more recently in North America, but I didn't feel the same energy in the store the way I had felt it back then. Maybe because this store was hidden inside a mall, whereas the other one was on a high street, and could get more direct eye-balls that way.   

I don't know what's the point of this post, and I expect someone to respond, "Cool story, tell it again". That's ok. But I recall coming back to the store, and wanting to plow at least 1K into the Canada Goose stock, unfortunately this stupid Robinhood app didn't let me finish the registration, and so I couldn't. I then followed the stock for at least the next 6 to 9 months, until I moved on to some departmental store. I think the CG stock during that period went up 2 to 3x, before I thought it had become too overvalued and just stopped following it. Even when I first started looking at it, it was trading at high EV/EBIT multiples. Can't recall now what was the catalyst behind CG's stock price increase or the subsequent drop. 

What high-end brands have you come across that you think have a similar effect? I heard about this Supreme effect in 2019, and it went over my head, the brand was so bloody basic. Supreme is no Canada Goose.