Moncler Milan

MILAN Moncler showed no sign of slowing down in the third quarter and the brand’s chairman and chief executive officer Remo Ruffini pointed to further innovation in the future to engage the brand’s consumer.

In the nine months ended Sept. 30, revenues climbed 15 percent to 736.8 million euros, compared with 639.3 million euros in the same period last year, lifted by all distribution channels and geographic markets.

“Innovate while remaining true to its origins has always been Moncler’s motto, and it is the driving force that has enabled us to continue our double-digit growth this quarter as well,” said Ruffini. “Today’s consumers are rapidly evolving, especially in the luxury goods industry, and run along paths that are very different to the past, at times breaking well-established moulds. Engaging this consumer means using new tools and codes alongside more traditional approaches. I believe it is essential, today more than ever, to look ahead with even more boldness and courage. For this reason, my team and I are working on important new projects, that I am confident will add significant value to the Moncler brand.”

Responding to one analyst’s request to elaborate Ruffini’s quotes during a conference call after trading hours in Milan, where the company is publicly listed, chief corporate and supply officer Luciano Santel said “there are new exciting projects coming up. We are thinking more and more about new ways to communicate our brand to the younger generation online, who think about digital but not only, it’s also about brand, product and collection. To break something old, this is the meaning of the sentence.”

Asked about the trend, Santel said “October started very well” and that he was confident about the last quarter of the year, even if this was “a very challenging comparison as November and December last year were very strong. So far so good.”

In the nine months, sales in international markets climbed 18 percent to 622.9 million euros, but revenues also rose in Italy, reaching 113.8 million euros, up 4 percent and representing 15.5 percent of total.

In the third quarter, business in Italy was slightly affected by the temporary, four-month closure of the company’s flagship in Milan’s Via Montenapoleone, which reopened last week double the size, making it the brand’s largest store in the world. Ruffini said the banner “symbolizes the profound evolution Moncler has undergone while remaining faithful to its unique DNA.”

In the Europe, Middle East and Africa region, the company posted an 18 percent gain to 240.3 million euros, representing 32.6 percent of total. In particular, the retail channel continued to see double-digit growth in all main markets, led by the U.K. and France.

In Asia and the Rest of World area, revenues increased 19 percent to 257.1 million euros, accounting for 34.9 percent of total, boosted by all markets. Japan continued to post double-digit growth, largely driven by the retail channel. The Asia-Pacific region accelerated in the third quarter, thanks to strong performance in both channels. The retail channel benefited from sound organic growth and the expansion of the network, including the relocation of the Hong Kong-Harbour City store to a flagship on Canton Road. Korea grew double-digit, driven by an increased appreciation of the Moncler brand from local customers.

Sales in the Americas grew 14 percent to 125.4 million euros, supported by double-digit growth across both distribution channels and both North American markets (U.S. and Canada). Retail performance was largely driven by new openings, while the wholesale channel continued to deliver solid results, supported by healthy sell-through and ongoing development of the shop-in-shop network. Moncler’s wholesale business is increasing  in department stores, but these “are not growing overall,” said Santel. “We monitor the credit aspect and our future business with them as retail is not strong or particularly healthy in the U.S. now.”

Revenues from the retail distribution channel rose 19 percent to 477.8 million euros, accounting for 64.9 percent of total, lifted by organic growth and the development of the monobrand retail store network.

The wholesale channel was up 8 percent to 259 million euros, driven by organic growth and the ongoing development of the shop-in-shop network.

As of Sept. 30, Moncler counted 195 directly operated stores, an increase of five units compared to the end of December last year and 48 wholesale shop-in-shops, an increase of six units. In the third quarter of 2017, Moncler opened four retail stores, including its first store in Kazakhstan (in Almaty), and two shop-in-shops (net of two conversions into retail).

Paola Durante, Moncler investor relations and strategic planning director, said the company is entering Mexico next year and will open its first store in Oslo. Moncler will also open a travel retail store in Thailand.

In light of the performance of the spring collection, Santel said he is “very confident about 2018.” He also touched on the brand’s online business, which is “growing faster than brick and mortar. We know the potential is higher than what we are able to deliver now. We are also happy with our  online wholesale, but we control the amount of product we sell to preserve the brand. We are very selective — volumes come after the brand.”

He also said other categories such as knitwear are “growing faster than outerwear. We are confident, consumers are asking for them and we get credibility.” Shoes are also expanding, but at a slower clip. “Step by step, season after season, the other categories are growing very nicely,” he added.

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