Guard the golden goose

Canada Goose is popular worldwide. Now it must stop counterfeiters sprawled across the globe from profiting off its success.

Kevin Spreekmeester, vice-president of global marketing, Canada Goose (Photo: Sean J. Sprague)

See also, “How to spot a fake Canada Goose coat.”

Nicole Lyons sits at her desktop computer and scrolls through an inbox full of e-mail. Dozens of messages arrive every day from Canada and around the world, all variations on the same theme. They’ll include a link to a website, or a photograph, with a query: “Can you tell me whether this is a real Canada Goose jacket, or a fake?”

In her cubicle in the outerwear company’s small office, adjacent to its north Toronto factory, Lyons is officially the administrative assistant to Canada Goose’s vice-presidents of sales and marketing. Recently, however, she’s fallen into a role as one of the point people in Goose’s quickly escalating battle against counterfeiting. “I think people just hope they’re getting a bargain,” she sighs, as she clicks through queries from some who have already bought questionable goods, and are now looking for a reassurance that, invariably, they don’t get.

When Sam Tick founded Canada Goose (then Metro Sportswear) in 1957, it was as a manufacturer of expedition gear and clothing for extreme cold weather. He likely would have cocked an eyebrow at the runaway success the company has seen in the past decade under the stewardship of his grandson, Dani Reiss. Canada Goose’s popularity has spread far beyond Antarctic research stations and Himalayan expeditions. Any bouncer standing outside a trendy nightclub in the Toronto, New York or Berlin winter is likely to be wearing one of Goose’s coyote-fur-lined parkas. Paparazzi have snapped the likes of Matt Damon and Hillary Duff snuggled into the jackets.

But as is the case for luxury goods titans like Hermès and Louis Vuitton, all that international brand cachet has made the relatively small Canada Goose a hot target for Asian counterfeiters. “Most brands that have this problem to this extent are far larger than we are,” Reiss says. “I have days where it pisses me off, but it’s not personal. It’s a backhanded compliment. It’s suggestive of the impact our brand is having in the marketplace.” And while counterfeit goods aren’t stealing sales from Goose directly—the company is in the enviable position of selling out its stock every season—the company is hellbent on protecting its brand, and their customers. That’s why Goose is fighting back hard; and in the process, they’ve made themselves an international industry leader in the battle against fake goods.

“About two years ago now, it was almost like a switch was turned on,” says Kevin Spreekmeester, who joined Canada Goose in 2007 as the company’s vice-president of global marketing, “It was ridiculous.” In the summer of 2009, CEO Reiss passed Spreekmeester Canada Goose’s counterfeiting file. Reiss’s assistant had previously been responsible for it as part of her day-to-day duties, occasionally checking the online auction sites, or dealing with the rare e-mail query. But Spreekmeester soon saw an explosion of counterfeit activity, which he attributes not just to the brand’s growing stature, but to recession-struck bargain hunters and to consumers’ increasing comfort level with online transactions (and a corresponding carelessness). Counterfeiting operations based in China and other parts of Asia had an unprecedented opportunity to get their knockoffs into the hands of eager buyers worldwide. “There’s a little bit [of counterfeit product] at the odd flea market,” Spreekmeester says, “but we could deal with that a lot more easily than with what’s happening online.”

Conversations with industry peers led Spreekmeester to the Boston-based online security agency OpSec. For a monthly retainer, OpSec scans the Internet several times daily for Goose and its other clients, looking for rogue vendors selling fake goods, either business-to-consumer or business-to-business. OpSec sends cease-and-desist letters on Goose’s behalf, and works with ISPs and auction sites to try to close the counterfeiters. Goose also established a relationship with a U.K. company called IP Crime Unit that educates European border patrol officers on how to spot counterfeit goods. Goose would do the same thing here in Canada, if it could—but to Spreekmeester’s chagrin, Canada is one of the few countries in the world whose border patrol officers do not have the right to seize counterfeit product.

Which is another problem Goose is trying to solve. Though Spreekmeester is loath to talk politics—“It makes my eyes glaze over,” he protests—the company has assumed a leadership role with two industry groups. In February, the Outdoor Industry Association, a U.S.-based apparel manufacturers’ organization, asked Spreekmeester to help form a task force to teach member companies to understand and combat the spread of counterfeiting. As well as co-chairing that task force, Spreekmeester co-chairs the Canadian Intellectual Property Council, a task force within the Canadian Chamber of Commerce. Though Spreekmeester personally focuses most on educating manufacturers, retailers and consumers, both organizations are lobbying in Washington and Ottawa for stricter controls on Internet commerce and, in the case of the CIPC, for the passage of Bill C-11 (formerly Bill C-32), the Copyright Modernization Act.

But as he concedes, many of the company’s efforts are only modestly successful. That’s where Goose’s partnership with the Canadian Anti-Fraud Centre (CAFC) comes in.

One day during the 2010 Christmas shopping season, Spreekmeester got a cold call from Barry Elliott, a former Ontario Provincial Police anti-rackets detective staff sergeant based in North Bay, Ont. Elliott had created the “PhoneBusters” anti-telemarketing scam effort in the ’90s, which evolved into the CAFC. Though it deals with 100,000 cases a year, on subjects from computer viruses to identity theft, the CAFC had never dealt with counterfeit apparel cases until Elliott started getting complaints about fake Goose gear.

Elliott and Spreekmeester leveraged the CAFC’s existing relationship with Visa; Elliott and Goose checked out the complaints as they streamed in, and Goose filed them with the credit card company, which would have the counterfeiters’ acquiring bank investigate and terminate the counterfeiters’ account.

But Elliott and Spreekmeester didn’t want to just sit around and wait for victims to call. They approached the Canadian bank that holds Goose’s accounts, and it agreed to issue a number of Visa cards that volunteers from Nipissing University’s criminology department use to make buys from suspected counterfeiters. Goose then follows up with the credit card company, and the counterfeiters’ financial apparatus gets dismantled. The program has been successful enough that the CAFC is now working with nine other apparel brands.

But Goose and the anti-fraud centre are hoping to land a more decisive blow against counterfeiting by focusing on Internet payment service-provider (IPSPs) companies, which provide the means by which vendor websites are linked in to banks and credit card companies. Elliott and his team are currently making their case to the roughly 120 IPSPs in Asia, who among them work with thousands of websites selling fake product. “In the short time we’ve been looking at this, this would be the Achilles heel of counterfeit-good sales on the Internet,” says Elliott. Throttling the fraudsters’ ability to collect money could prove a more effective strategy than taking on individual websites. “If we can get control of this particular area, whether co-operatively or by policy or law, we can cut off the ability of counterfeit websites to collect money. We won’t care if they stay up and running if they can’t sell anything.” As far as Elliott knows, they are the only ones in the world focusing on this potential solution to the counterfeiting problem.

Back in Toronto, the number of complaints streaming into Goose headquarters rises as the temperature drops. Along with Spreekmeester and Lyons, two other head office employees devote large parts of their work days to dealing with the counterfeiting issue, and the volume of complaints has grown so large that it’s been reassigned from Lyons to the company’s customer service department. Anti-counterfeiting expenditures now represent a six-figure budget line, no small change for a company with revenue of just over $150 million.

“It’s expensive,” Reiss admits, but he doesn’t see any choice. “It’s important to protect our brand. We’re obligated to.” And their would-be customers are the beneficiaries