Lifted by double-digit growth in Asia and the Americas and a solid performance in Europe and in Italy, Moncler SpA saw revenues grow 18 percent in the first quarter of the year. In the three months ended March 31, sales rose to 237.3 million euros, or $261 million, compared with 201 million euros, or $225.1 million in the same period.
“The results achieved in the first three months of 2016 have exceeded our expectations, as well as those of the market,” said Remo Ruffini, chairman and chief executive officer. “I am also pleased with the important projects we are pursuing in our retail store network and the positive feedback we have received on our collections even in non-core segments. I believe that we are doing well, and this gives me confidence that, despite the continuation of an uncertain and volatile macroeconomic situation, we will achieve further growth in 2016 compared with 2015.”
The figures were released on Tuesday at the end of trading in Milan, where the company is publicly listed. In accordance with a new European directive, public companies are no longer obliged to report first- and third-quarter financial figures. Starting with the first quarter of the year, Moncler has decided to voluntarily provide information on sales trends.
During a conference call with analysts, chief corporate officer Luciano Santel said, “April and May are well in line with our expectations. All regions are performing well.”
In the first quarter, in Asia and the Rest of the World, revenues increased 32 percent to 99.5 million euros, or $109.4 million. The company defined the performance in mainland China “outstanding,” also driven by business during the Chinese New Year. He said Japan showed “ongoing strong growth, also thanks to the excellent results of the newly opened flagship store in Tokyo’s Ginza.”
Asked by one analyst about pricing architecture, Santel said that “the price gap between Europe and mainland China had to be reduced down to 60 percent from over 90 percent.” Moncler “didn’t touch the price of carryovers,” said Santel, but took action on the new products.
Responding to a question about the brand’s ongoing success in Asia and globally, Santel attributed it also to “the healthy distribution implemented, selective and limited.” The company has reduced the number of wholesale accounts in Japan, for example, he said. Tokyo has been “positively affected by Chinese travelers,” he added. “The Chinese are still growing for us,” he said to an analyst, adding that they have increased in New York as well.
In the Americas, sales gained 28 percent to 33.5 million euros, or $36.8 million, supported by solid growth in both the retail division, lifted by new openings, and the wholesale channel, which benefited from a better penetration in top wholesale accounts. “The U.S. was difficult for apparel for department stores because of the mild weather for fall, but Moncler saw very good results, and January and February caught up. We are pretty satisfied,” remarked Santel. “The Moncler brand is very strong and our partners, from Neiman Marcus to Saks are looking at us with a lot of attention, and keep developing the business with more and more spaces that may provide a fair representation of the brand, such as shops-in-shops.”
In the Europe, Middle East and Africa region, sales were up 5 percent to 67.7 million euros, or $74.4 million. All North European markets, in particular Germany and the U.K. showed good results in both channels, while France and Belgium slightly underperformed, dented by the recent terrorist attacks and the resulting slowdown in tourist flows. “In Europe, tourism was lower than last year,” said Santel. “Paris, Milan and Rome were negatively impacted, mainly in tourism from Asia.”
In Italy revenues rose 5 percent to 36.6 million euros, or $40.2 million.
In the period, retail sales rose 23 percent to 170 million euros, or $187 million, while wholesale revenues gained 7 percent to 67.2 million euros, or $74 million.
As of March 31, Moncler’s monobrand distribution network totaled 175 directly operated stores, an increase of 2 units compared to the end of December 2015, and 34 wholesale shops-in-shops. A new flagship opened in London last week and a “grand opening” will take place in September. Santel said retail is “a priority for this year, in all different regions. The productivity of new stores is good, they perform well from the first day of business.”
Fifteen locations have been secured for 2016 including the four already opened. A store in New York’s Madison Avenue will open between September and October, and one in Seoul will also open in September.
Santel also highlighted the performance of categories other than Moncler’s core outerwear. “Customers are starting to ask for knitwear,” he noted. “The sell-through is pretty good and I am confident and comfortable about the project that offers strong and important opportunities.” Footwear is also “performing well,” he said and the company “is training salespeople how to sell shoes, moving the focus from outerwear to footwear. It’s very encouraging.”
The executive also emphasized the “retail excellence project.” He explained that Moncler has noticed “repeat customers” account for “ a very small amount of sales” and that the company “had never paid specific attention to developing relations with existing customers.” The group is looking at correcting this and to “increase the contribution of repeat customers. This is one of the most important areas we have been working on in the past few months and we are seeing interesting results.”
The group’s own online channel last year accounted for 3 percent of sales. An additional 3 percent derives from wholesale accounts such as Mytheresa, Net-a-porter or Mr Porter, said Santel. “[The channel ] is growing nicely,” he said. Moncler’s online store is operated by Yoox. The agreement was first inked five years ago and it has just been extended for another five years. “Their decision to invest in IT infrastructure was a key factor to develop this business. We agree that omnichannel is critical,” observed Santel.