MILAN — The impact of the coronavirus pandemic dented Moncler SpA’s revenues in the first nine months of the year, but the company started to see improvements in the third quarter and is banking on the recovery of Mainland China and new projects that have growth potential, such as the internalization of its online business in North America.
In the nine months ended Sept. 30, revenues decreased 23 percent to 765.1 million euros, compared with 995.3 million euros in the same period last year.
The third quarter continues to be affected by the pandemic, but to a lesser extent, said the company on Thursday at the end of stock market trading in Milan, noting that revenues were down 15 percent to 361.8 million euros.
“We ended the third quarter of 2020 with better results than we expected,” said chairman and chief executive officer Remo Ruffini. “Not only is the Chinese market seeing high and constantly improving growth rates, but other markets and all distribution channels are also showing continuous progress in their performance, although in many cases they are still negative. The signs we are seeing in October are encouraging, but we know we have challenging weeks ahead of us, made even more uncertain by the current global economic and health situation.”
The lack of tourist flows impacted Italy, which in the nine months reported a 34 percent drop in revenues to 86.2 million euros.
The Europe, Middle East and Africa region saw a 21 percent decrease in sales to 239.2 million euros, also affected by the lack of tourists. In the third quarter, which was down 18 percent, Germany, Russia and the Middle East outperformed the rest of the region, while France remained weak.
Revenues in Asia and Rest of World were down 19 percent in the first nine months with a significant improvement in the third quarter, a 4 percent decrease. This result was driven by the outstanding performance of Mainland China, Taiwan and Korea, which registered double-digit growth rates in the third quarter because of the positive reception of the fall collections and to the significant growth in local demand.
Luciano Santel, chief corporate and supply officer, also emphasized during a call with analysts the importance of a “very positive” China market, and the boost seen during Golden Week.
On the contrary, Hong Kong and Macao were “a disaster,” said Santel, and Japan was penalized by the challenging comparison basis with last year, ahead of the value-added tax hike. But Santel said Japan showed improvements in October and he expressed his confidence in that market going forward.
In the Americas, revenues decreased by 29 percent to 113.5 million euros, with a significant improvement since August in both distribution channels, particularly in the retail network. Santel said the company had seen a younger customer approach the brand in the region.
“In the last nine months we have experienced unexpected events — difficult, to be sure, but also highly formative,” continued Ruffini. “I think it is our duty now to take what we have learnt and turn it into something valuable for the future. Being flexible and responsive, while maintaining an efficient cost structure, are still fundamental to a successful company. These qualities have always been part of Moncler’s DNA and now I have solid proof that they have been strengthened even further. I know I always ask a lot of all my people, but as I often say, in these months it has been their capacity to act, to change, to adapt and to improvise that has convinced me that our company, and above all our brand, are protected and founded on solid pillars.”
Santel emphasized the importance of internalizing Moncler’s e-commerce in America beginning Oct. 6. “We are already very satisfied, we’ve seen very good results,” said Santel.
In May or June of next year, the company will internalize its online business in Europe, “the most important region for the online,” claimed Santel, but “Europe is more complex given the taxes, duties, currencies and so on.”
Japan will follow in June 2021 and, China will be up next by the end of the second half of next year. “It’s a completely different project and it’s a huge opportunity,” admitted Santel. “We have started moving the machine and have already worked with TikTok and opened WeChat mini programs.”
Responding to a question about the presentation of Moncler Genius, now expected to be next February, at the time of the pandemic, Santel kept details under wraps, but said “you’ll see, it will be amazing as usual — you just have to wait.”
After a delay in July, following the lockdown in Italy, all the Genius collections were delivered, “despite a very intense timeline.” The Moncler and Rick Owens collaboration made its debut on Oct. 22 and will be followed by Grenoble and the 1017 Alyx 9SM capsule by Matthew Williams in December as expected, the executive noted.
In the nine months, sales of the retail distribution channel were down 27 percent to 502.7 million euros, compared with 690.4 million euros in the same period last year. In the third quarter, retail revenues were down 20 percent with a constant and progressive improvement compared to first-half results.
The online channel continued to register positive double-digit growth rates.
The wholesale channel posted a 14 percent decrease to 262.4 million euros. In the third quarter, wholesale revenues decreased by 7 percent. Santel was pleased with the performance, noting that this channel is less exposed to travelers. “We are implementing business actions to capture locals, we call them the new locals, contacting them, inviting them to our stores, in Mainland China especially,” he observed.
“The current situation is increasing our seasonality,” said Santel, “with people buying more when it’s cold, compared to last year. Based on October, the last quarter may be performing very well, with pent-up demand and pretty cold weather.”
As of Sept, 30, Moncler counted 217 directly operated stores, an increase of eight units compared to the end of December last year and 63 wholesale shop-in-shops, a decrease of one unit compared to Dec. 31.
During the third quarter of 2020, Moncler opened four retail mono-brand stores: one store in Japan, one resort location in Capri and two units in the EMEA area.
Next year, Moncler will open a flagship in Milan’s Galleria Vittorio Emanuele II and in Madrid as well as flagships in Hangzhou and Chengdu.
Gross margin by the end of the year is expected to be in line with last year, said Santel.
As reported, Moncler has unveiled its Born to Protect Sustainability Plan until 2025, which will also see the establishment of a Diversity and Inclusion Council by January 2021.