UPDATE 2-Canada Goose to cut production, spending on retail stores as virus hits sales

(Adds details on investments from release, background)

Aug 11 (Reuters) - Canada Goose Holdings Inc said on Tuesday it would cut production and open fewer new stores this year, as the luxury parka maker tackles the coronavirus-induced strain on its business that has battered sales.

The company said it would invest more in its online business to prepare for a busy fall/winter season as reopened retail stores have seen a slow recovery in sales.

Canada Goose, which has restarted manufacturing down-filled jackets, said its overall production this year would be a third of the 2020 output, as it aims to reduce inventory levels by the end of the year.

U.S.-listed shares of the company, which forecast its current-quarter revenue would decline “significantly”, fell 8% in early trade.

Canada Goose, known for its expensive red parkas worn by everyone from Arctic scientists to Hollywood celebrities, expects its second quarter to be a “low point” for its online business as its products would mostly be off-season.

The company added it would focus on opening new stores in China, where the recovery of traffic has been better compared to other markets.

Several luxury players, including Versace owner Capri Holdings Ltd, LVMH and Kering, have also signaled a pick up in demand in China, where customers are turning to e-commerce due to restrictions on traveling abroad.

Canada Goose’s revenue for the first quarter ended June 28 fell 63% to C$26.1 million ($19.63 million), hurt by a near 75% decline in its wholesale unit, but beat Wall Street estimates of C$18.34 million.

Sales at its nascent direct-to-consumer business that includes online operations declined about 70%.

The company’s net loss widened to C$50.1 million from C$29.4 million, a year earlier. Excluding items, it reported a loss of 35 Canadian cents per share, smaller than anticipated. ($1 = 1.3293 Canadian dollars) (Reporting by Praveen Paramasivam in Bengaluru; Editing by Vinay Dwivedi)