China Media Warns Canada Goose May Have Broken Consumer Law

(Bloomberg) -- China’s state-run People’s Daily newspaper warned that Canada Goose Holdings Inc. may have violated Chinese consumer law, a sign the clothing company may be facing a difficult period in the world’s No. 2 economy.

The ruling Communist Party’s flagship newspaper said on a social media account Thursday that the Toronto-based cold weather outfitter used a “discriminative” return policy in China, adding that Canada Goose and other foreign brands must provide quality products and services to the nation’s consumers.

“For Canada Goose, which has more stores in China than in its home market, it’s very ugly to discriminate against Chinese consumers while enjoying sales here,” the commentary said. “If you want to enjoy the market’s growth, please spend your efforts providing good products and services, otherwise you’ll lose consumers’ trust and be abandoned by the market.”

Canada Goose is the latest foreign company to be criticized by China’s state media, which often leads to sliding local sales and apologies from executives. Earlier this month, Christian Dior SE said it would stop using a photo of an Asian model that the Beijing Daily said was “smearing Asian women.”

In 2018, Canada Goose saw the opening of its flagship store in Beijing delayed by days, with the company citing “construction reasons.” The announcement came as tensions between the two countries soared, after Canada detained Huawei Technologies Co. executive Meng Wanzhou due to an extradition request from the U.S. Earlier this year, Canada Goose was fined and criticized by state media for allegedly misleading consumers in some advertisements.

Canada Goose faces a second summons by consumer regulators in Shanghai to explain why it has a different return policy in China than elsewhere after a woman complained she was unable to get a refund for a down coat she bought in a store. The Consumer Council in the financial hub said Thursday that it was dissatisfied with the company’s first explanation and would speak with it again next week.

Canada Goose refunded the shopper Thursday, according to the People’s Daily commentary.

Representatives for Canada Goose didn’t immediately respond to requests for comment from Bloomberg News on Friday. Last month, CEO Dani Reiss said in a quarterly earnings call that China is “a very strong market for us, it’s been growing and accelerating.”

Shares of the retailer have fallen 14% in a three-session losing streak, closing Thursday in New York at the lowest in a month.

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With assistance from Bloomberg