Energy is a recurring word for Remo Ruffini, chairman and chief executive officer of Moncler.
He certainly doesn’t lack any, as his words seem to rush to catch up with the flow of his thoughts. Ruffini has succeeded in channeling this energy into a business that has consistently grown to reach the $1 billion in sales milestone last year, while wiping out its debt. In the first half of the year, the company recorded the 14th consecutive quarter of double-digit growth since it was publicly listed in 2013, with contributions from all regions and channels. Since its initial public offering, Moncler has seen its stock price soar 142.5 percent to 24.73 euros, while profits have risen 158 percent, looking at the company’s net income growth between full-year 2016 and full-year 2013.
In the first six months of the fiscal year ended June 30, net profit climbed 25 percent to 41.8 million euros, compared with 33.6 million euros in the same period last year. Sales rose 18 percent to 407.6 million euros, compared to 346.5 million euros in the first half of 2016. (Third-quarter figures are to be released today).
It is that growth across the board that has earned the Italian brand the WWD Honor for Best-Performing Company, Large Cap.
Ruffini credits sharing clear strategies and vision with the private equity funds that have invested in the brand over the years, from Mittel to The Carlyle Group and Eurazeo, for their support.
Having acquired the company in 2003, his passion for Moncler led to the brand’s turnaround as he masterminded the development of the label from a collection of utilitarian down-filled jackets with mainly local distribution into an international luxury fashion label that will count more than 200 stores around the world by the end of the year — including its largest flagship, a four-story building covering 8,640 square feet, which was unveiled this month on Via Montenapoleone in Milan. While preserving Moncler’s identity and history associated with the mountains, the executive has helped raise the label’s profile and fashion content, forging strong relationships with designers from Nicolas Ghesquière and Junya Watanabe to Giambattista Valli, who designs Moncler Gamme Rouge and Thom Browne, who’s in charge of the Moncler Gamme Bleu line for men — attributing each choice to his instinct. While shunning the idea of becoming a generalist, Ruffini has been championing product diversification, with investments in the development of knitwear, for example. He has long advocated a consumer-centric strategy, growing the company’s wholesale channel while selectively pacing its retail expansion.
Here, Ruffini talks about his refusal to compromise, his efforts to create a solid company for the long-term, one that is unique and caters directly to the customer, who is “the only point of reference” and who is also “looking for that special energy.”
WWD: What were the watershed moments for Moncler?
Remo Ruffini: The first years were fundamental to bring the company to a level of quality, not only in terms of products. That allowed me to change its strategy so that the brand would no longer be carried only in sports stores, but in a totally different channel. This meant a total restructuring at all levels. The second step was to change the mentality of the people, shifting from a wholesale and mainly domestic business dating back to 1952. It was a big leap not only because we had to expand our offer from the colorful and shiny down jacket, but also because we opened our first stores in 2007. It was a fundamental step — we had to create a new machine, moving from wholesale to retail with two different organizations. We changed the quality and the mission of the company. Moncler was a different entity then, that had come out of a crisis. We had to create a company that could face the world, change the perception of the brand, work with people’s mind-sets within Moncler, while also focusing on the quality of the product. But I quickly realized that I had to change the quality of the company. The next important moment that gave us credibility, visibility and respect was when we went public. The market saw us in a different way and we worked in a different way, creating the structure and organization that allowed us to be part of a financial community that was not familiar to us. And this was 10 years after the acquisition, so it was very fast. After the listing, I found myself with a totally different company, an international one fighting in the luxury sector with much stronger competitors. We had changed skin. We had attracted a lot of financial investors. The third phase is marked by our dialogue with consumers and investors.
WWD: You were determined to publicly list the company and orchestrated the IPO. Why was it such a priority?
R.R.: It was a natural step forward. Private equity funds were part of the investors and their investments span from three to five years, so I realized that the Bourse could be the only way out. We worked with that goal and I think it went well.
WWD: Waiting for the right window can be a challenge.
R.R.: We were prepared and we waited for the right moment. There was no urgency, it was not a priority. It was a moment that shareholders expected. I could not imagine going through everything again with new private equity investors. This allowed us to have a more long-term vision and ease in our management. The company has been performing well, so it’s also easier to communicate with our shareholders.
WWD: Your peers often speak of storytelling, also in approaching a listing. Do you think it’s important?
R.R.: No, I didn’t tell any story; I talked about the history of the company. I think transparency is very important, what we did, how we grew our strategy for the brand, what we wanted to do. All of this together worked. If you communicate, it’s easier for the market to understand. Ours is a simple, clear and strong strategy — to continue to have a very solid business, without compromises and communicate with the market. We listen to our shareholders but follow our own strategy. We focus on a few things done well, we don’t have any markdowns, and we are very controlled. This allows us to grow, but this is not the fundamental point. If you do things well, the consumers will follow and this leads to growth. But growth has to be a healthy one.
WWD: What is your long-term vision?
R.R.: I am looking for uniqueness and I want a strong, solid company, without compromises. This is fundamental. The company grows through the main collection, which is solid and consistent, but this is not enough. Each season, there must be collaborations with designers and capsules because I believe that consumers need a different energy. Back in 2005, the first was with Junya Watanabe. It’s part of my strategy and not because it’s trendy now. I’ve always had these collaborations; I was the first, when nobody was doing it.
WWD: You have repeatedly used the word energy. Why is that? Do you think it’s necessary in the face of the competition? Or do you believe customers are fickle and have a short attention span?
R.R.: I don’t think of our competitors, I only think of being unique, with a product and project that is unique. When I see these luxury malls in Asia, with all the brands displayed in the same way — accessories in the front, small leather goods on the left, foulards on the right and ready-to-wear in the back, I am looking for uniqueness, which brings energy. We add small things to increase the perception of the product and then I must go to the consumer, who is the only reference point. I don’t believe competition should be taken into consideration [when thinking of the customer], but I do believe in engaging the customer. Our strategy is based on the consumer. There are no filters between us and the market. We eliminated distributors, franchises and agents years ago. We transfer the energy to the consumer. We want to convey a strong emotion for a strong perception of the brand.
WWD: Looking back, did you expect this progression for the company?
R.R.: No, I would have been arrogant and presumptuous to think of these numbers or the penetration of the market. Growth was never my only goal — it’s to do things well, the quality and the relation with consumers. These results are obtained thanks to the execution of the strategy. But I would never have imagined this.