Strong growth in Europe and an improvement in China contributed to a 32 percent gain in revenues in the first nine months of the year at the Moncler Group.
In the period ended Sept. 30, sales surpassed the 1.55 billion euros benchmark, compared with 1.17 billion euros in the first nine months of 2021. Compared with 2019, sales climbed 57 percent at constant exchange.
In the third quarter, revenues rose 12 percent at constant exchange to 638.3 million euros compared to the same period last year. Compared to 2019, sales climbed 50 percent.
“We are now facing the most important period of the year with confidence and great energy; conscious of the strength of our brands and of the unique and distinctive projects planned for these months,” said chairman and chief executive officer Remo Ruffini.
The executive underscored that “the spectacular event” in Milan’s Piazza Duomo at the tail end of fashion week drew over 18,000 people, and that the company continues to celebrate its 70th anniversary this year with a series of events and activations to connect with the brand’s communities around the world.
All the following figures were provided at constant exchange. The Moncler brand posted a 21 percent gain in revenues in the nine months, reaching 1.25 billion euros.
The solid double-digit growth continued in the third quarter, up 13 percent on the third quarter of 2021, driven by the direct-to-consumer distribution channel, which grew 21 percent.
In Asia, which includes the Asia-Pacific region, Japan and Korea, revenues in the first nine months grew 15 percent to 548 million euros compared with last year and they rose 36 percent compared with 2019. Growth in the third quarter was 14 percent on last year and up 40 percent compared with the same period in 2019, driven by the reopening of directly operated stores in the Chinese market, especially in July and August. Korea and Japan continued to record good growth also in the third quarter. In Asia, both channels recorded double-digit growth in the quarter.
During a conference call with analysts on Wednesday at the end of trading in Milan, Luciano Santel, chief corporate and supply officer, said the third quarter in mainland China was positive.
“June was good, and July and August are in line with June,” but that because of new lockdowns, business was weaker in September. However, he added that “the first week of October and the second week of October were very, very strong for China.”
He reminded analysts that Golden Week took place in the first week of October and that the results then were “very, very good, showing a strong double-digit growth,” also driven by the impact of the 70th anniversary events and the launch of the Maya 70 jacket.
While the situation in China is “still volatile and uncertain,” he explained that “what is very important from our perspective that is more focused on the long term, is that the brand in China is really very strong. Of course, we have to live with this situation.” Korea remains strong, as it has been for the past three years at least, Santel said, also citing Japan’s strong performance.
Moncler launched on Tmall at the end of September — an “important step to develop a new audience for our brand,” said Santel.
In the Europe, Middle East and Africa region, revenues in the first nine months increased by 29 percent to 486.3 million euros compared with the same period of 2021 and by 14 percent compared with 2019.
In the third quarter, sales were up 16 percent driven by strong demand from both local customers and American tourists. France, Germany, and Italy were the countries that contributed the most to the growth in the third quarter.
Revenues in the Americas in the first nine months grew by 18 percent to 218.2 million euros and they were up 34 percent on 2019. In the third quarter, sales rose 6 percent while they were up 16 percent on 2019. U.S. tourists flocked to Europe in the quarter, said Santel.
In the first nine months of 2022, Moncler’s direct-to-consumer channel was up 27 percent to 903.1 million euros.
The wholesale channel reported revenues of 349.5 million, an increase of 7 percent.
As of Sept. 30, there were 242 directly operated Moncler stores, an increase of four units compared to the end of June, among which were Düsseldorf and two conversions from the wholesale channel. As of Sept. 30, there were 61 wholesale shops-in-shop, a decrease of three units, among which were the conversion to retail of the Zurich Airport unit and the Paris La Samaritaine store.
Revenues at the Stone Island brand increased 23 percent to 304.1 million euros in the first nine months of 2022 compared with the first nine months of 2021 pro forma, since the brand was consolidated on April 1 last year.
In the third quarter, sales grew 8 percent compared with the same period last year, led by the direct-to-consumer channel.
In August, Stone Island Japan was established as a joint venture majority-held by the Italian brand, now directly managing the business in the country comprising 16 existing mono-brand stores converted from wholesale.
The Europe and Middle East and Africa region, the most relevant region for the Stone Island brand, grew by 14 percent to 218 million euros compared to 2021 pro-forma. Italy outperformed the rest of the region in the quarter, reporting a double-digit growth.
In the nine months, Asia reached 52.4 million euros in sales, up 66 percent.
The Americas recorded growth of 40 percent to 33.6 million euros.
The wholesale channel, which represents the most important channel for Stone Island, showed a 7 percent gain to 212.6 million euros in the first nine months.
Due to several conversions, the direct-to-consumer channel was up 91 percent to 91.6 million euros.
As of Sept. 30, the network of monobrand Stone Island boutiques comprised 71 directly operated stores, up 17 units compared to the end of June, as a result of the 16 conversions of the Japanese stores and the London boutique. There are also 20 monobrand wholesale stores.
Santel pointed to the relevance of the Stone Island Chicago store opened a week ago. “It is very important because it represents the new store format so that has been designed by Oma/Amo an architectural study that interpreted very well in my opinion the DNA of the brand. So we are very happy with the design and with the final result of the store.”
Santel expressed confidence in 2023, when additional Stone Islands will be opened, in Vienna, and Zurich for example, in very good locations “to properly communicate the values of the brand.” However, he said the retail strategy for the brand “is not driven by the aim to increase volumes,” which could be a short-term strategy. “Our priority now is to build a real retail culture in Stone Island, which is something that takes us some time.”
Speaking at the group level, Santel said prices were increased this season and also for spring 2023 by an average of about 10 percent, depending on individual currencies and that “the impact, the response has been, honestly, good, I would say, unrelated to prices.”
He explained that the increase in prices was to “offset the production cost increase for this season and for spring 2023 with questions about the following season since the cost of energy is decreasing.” What is impacting Moncler is “the raw materials that we buy from our suppliers that use energy. The step before fabric is the production of yarn. And so that kind of production is energy-intensive.”
Santel said that after working and investing on the footwear line for more than a year, the results were good, “performing very well with a very strong sell-through. I mean, the first prelaunch online was sold out in a few hours.” He admitted that Moncler was “not in a hurry” to build this business, and that “we are very confident for the future.” He also said that in the upcoming summer season, the collection will be broader. The plan with footwear is to achieve by 2025 sales equivalent to about 10 percent of the business. “We are confident about the first results, but there’s still a lot, a lot of work to do,” he said.