MILAN — On the back of gains in profitability and revenues in the first three months of the year at Moncler SpA, chairman and chief executive officer Remo Ruffini continues to stand by his long-term strategy.
This story first appeared in the May 16, 2014 issue of WWD. Subscribe Today.
Discussing the quarter, the first as a public company, Ruffini told WWD that he aims “at a sustainable and long-term growth. This has not changed since the IPO [initial public offering]. I continue to work believing that our main shareholders are our consumers and that we have to work to satisfy them.”
Moncler shares have risen 17 percent since the first day of trading on Dec. 16, but Ruffini said “not much has changed. Apart from the euphoria of the moment, I said to myself then that I wanted to return to work in the respect of our shareholders and seriously.”
In the period ended March 31, Moncler reported a 43 percent increase in net profit to 23.5 million euros, or $32.2 million. This compares with 16.4 million euros, or $21.6 million, in the first quarter of 2013, including net losses of 3.3 million euros, or $4.3 million, from discontinued operations and the devaluation of the “other brands” including Marina Yachting, Henry Cotton’s and Coast Weber & Ahaus.
Revenues rose 16 percent to 145.4 million euros, or $199.2 million, compared with 125.6 million euros, or $165.8 million.
“I am very satisfied with these results, which were ahead of our expectations. Exchange rates and macro-political reasons surely weighed on the figures in the period, and last year, too. They are all negative factors, but our strategy is long-term, this is very important,” underscored Ruffini. “I look at our customers and listen to them. We don’t operate with quarterly strategies, and, if you work well, you can see the results.”
Adjusted earnings before interest, taxes, depreciation and amortization, before the 600,000 euros, or $822,000, of noncash costs related to the stock option plans, rose 14.7 percent to 45 million euros, or $61.6 million.
Dollar amounts are converted at average exchange rates for the periods to which they refer.
The brand recorded double-digit growth in all markets. Asia and the Rest of the World was up 31 percent to 45.3 million euros, or $62 million, boosted by its performance in Japan and China, yet dented by the negative trend of the yen in relation to the euro. At constant exchange, sales would have grown 42 percent.
The Americas were up 12 percent to 14.1 million euros, or $19.3 million, and the Europe, Middle East and Africa regions climbed 20 percent to 53.3 million euros, or $73 million. France, Germany, Turkey and the U.K. were singled out as particularly strong markets.
Ruffini touted the group’s “diversification” and market balance that helps weather difficulties. “We always take into account a slowdown,” he said. The entrepreneur remarked on how Asia and the U.S.
“performed very, very well” — the latter also over the past six to eight months. He noted that business in China was also “very good,” and underscored Hong Kong’s “very strong energy.”
Italy inched down 4 percent to 32.6 million euros, or $44.6 million, largely due to a different timing effect in deliveries between the first and second quarters and also by an ongoing selective reduction of wholesale doors. Asked if the scaling back is complete, Ruffini said the company still “needs to do a few doors in Italy. The wholesale network here has deteriorated because of the strong crisis.” The group’s retail channel rose 23 percent, accounting for 56.3 percent of total revenues, driven by the expansion of its own stores and like-for-like gains.
The wholesale channel rose 7 percent and accounted for 43.7 percent of total sales, despite the planned reduction of wholesale doors and the conversion from shops-in-shop to concessions of five units over the past 12 months.
At the end of March, Moncler had 138 stores, of which 111 are directly operated.
Ruffini said the stores totaled 140 boutiques at the end of April with the opening of the brand’s first Russian store in Moscow and a new directly operated store at Hong Kong Airport.
In the first quarter, capital expenditure totaled 9 million euros, or $12.3 million, compared with 6.4 million euros, or $8.4 million, in the first quarter last year, mainly related to the development of the group’s network of stores, a new showroom location in Milan and investments in IT infrastructure.
In the first quarter, advertising expenses totaled 10.5 million euros, or $14.4 million, compared with 9.4 million euros, or $12.4 million, last year.
Ruffini was confident about new company projects. Asked about the development of a knitwear division he had recently referred to, he said he had set the project in motion. “It’s in place, we have looked for the right people, and we are pleased with it. We will be operative with the winter collection,” he said. True to his inclinations, he was cautious. “I want to be sure, I don’t want to rush after immediate sales, I want to create a culture and not look at the numbers, but create a special and unique product—just like the down jacket.”