MILAN — Close to joining the $1 billion club, Moncler SpA logged in another year of growth and profitability in 2015, driven by gain in all geographic markets.
This story first appeared in the March 4, 2016 issue of WWD. Subscribe Today.
In the 12 months ended Dec. 31, net profits rose 29 percent to 167.9 million euros, or $186.3 million, compared with 130.3 million euros, or $172 million.
Sales gained 27 percent to 880.4 million euros, or $977.2 million, compared with 694.2 million euros, or $916.3 million, in 2014. At constant exchange rates, revenues grew 19 percent.
Remo Ruffini, chairman and chief executive officer, said during a conference call with analysts that “2015 was another year of solid, double-digit growth for Moncler, which means we have achieved the results expected by the market at the time of our initial public offering one year ahead of schedule.”
Ruffini said the company was “working on important, long-term projects. Even though for global markets as a whole, 2016 has begun in a climate of economic uncertainty, I am convinced that this will be a year of further growth and consolidation for Moncler.”
The company’s growth last year was partially attributable to the appreciation of some currencies. Because a considerable amount of the group’s costs are euro-denominated, the improvement in profits and margins is also due to this currency trend, said the company.
In Asia and the rest of the world region, revenues grew 42 percent at current exchange and 28 percent at constant exchange. China, Hong Kong and Japan grew organically and through the contribution from new stores. Tokyo’s new Ginza flagship lifted the performance in Japan, surpassing expectations. Ruffini said this unit “showed a very good start, giving confidence in long-term flagship projects.” He highlighted upcoming openings in New York, London and Seoul.
Results from newly opened stores in Macau and Singapore also exceeded management’s forecasts. Korea was also a strong market, which has been directly controlled by Moncler since the beginning of 2015. Luciano Santel, chief corporate officer, touted the “very positive” performance of Chinese traveling abroad, in particular to Japan, Hong Kong and Northern Europe. The Chinese account for 30 percent of customers, said Santel, and are “growing.”
In the Americas, the company posted a 48 percent increase. At constant exchange, sales rose 27 percent, driven by the expansion in North America of both distribution channels, despite an extraordinarily mild winter season, which affected revenues in the fourth quarter. Roberto Eggs, chief operating officer, said the company has been diversifying its offer and leveraged other categories such as knitwear.
In Europe, the Middle East and Africa, sales grew 15 percent, with France — despite the terrorist attacks and a slower tourist flow; the U.K., and Germany posting significant results. Europe was “the best-performing market,” said Santel.
In Italy, revenues rose 5 percent compared to 2014, driven, in particular, by good results at directly operated stores.
Revenues from the retail distribution channel reached 619.7 million euros, or $687.8 million, up 44 percent, and accounting for 70 percent of the total. Comparable-store sales grew 6 percent. The wholesale channel posted revenues of 260.7 million euros, or $289.3 million, up 1 percent, and down 5 percent at constant exchange. This result includes the impact of the conversion of the Korean business from wholesale into retail, from Jan. 1, 2015.
As of Dec. 31, Moncler had 173 directly operated stores, an increase of 39 units compared to the end of December 2014, including new stores in Shanghai, Vancouver and a second store in Las Vegas, and 34 shops-in-shop. Moncler opened 27 stores during 2015.
The company has already secured sites for 15 new stores in 2016. Responding to an analyst’s question, pointing to the opening of a more limited number of units this year, Moncler’s Andrea Tieghi said the “strategy is to go for quality to improve Moncler’s presence.” Ruffini echoed these comments, saying the focus is also to expand the group’s chain of flagships with better locations and more space in 2016 and 2017.
Asked about price harmonization, Santel said the company is working to reduce the price gap between China and Europe, “maintaining carryovers flat.”
Regarding online sales, Eggs said he was “very happy with a strong double-digit growth.” This channel accounts for 3 percent of total sales. “We see the percentage growing in years to come.”
Advertising expenses totaled 57.8 million euros, or $64.1 million, representing 6.6 percent of revenues, in line with the previous year.
Capital expenditure totaled 66.2 million euros, or $73.5 million, compared to 49.5 million euros, or $65.3 million, in 2014, mainly related to the development of the group’s retail network. Investments were also channeled into the acquisition of a small manufacturing company in Romania, said Santel, to integrate the company’s supply chain and bring production in-house.