Moncler's stroke of Genius drives H1 sales and profits higher
Moncler has been shaking up its business in recent periods with a new approach to design. But is its shake-up paying off? It certainly looks like it.
On Wednesday, the company turned in a stunning set of figures that showed how a company specialising in luxury clothing for cold weather can prosper come snow, rain or even intense sunshine.
And there’s no denying that it’s seen all of those conditions in the six months to June 30 with a period of extreme weather leading to record snowfalls, floods and a heatwave.
Let’s look at the figures first. Sales rose 21% to €493.5 million and managed to rise an even more impressive 27% currency-neutral. Net profit climbed even faster, up 47% to €61.6 million, while operating profit increased 35% to €85.7 million, with all the figures beating analysts’ predictions.
And the performance doesn’t seem to be slowing down noticeably with Q2’s currency-neutral sales rise of 26%, a whisker short of what it achieved in Q1, but the first quarter was the biggest season for a padded jackets specialist, after all.
CEO Remo Ruffini said on a conference call that success was spread across geographies, calling out Italy’s above-expectations performance, and double-digit rises in China and Japan.
Italian sales rose 9% in H1, while EMEA was up 15% with France, the UK and Germany all strong. Revenues in France continued to see double-digit growth, “thanks to the local demand and the sustained tourists’ flow.” In Q2, the UK achieved “a good performance, despite a challenging comparison base… supported by retail organic growth, the positive contribution from wholesale clients, including some e-tailers, and the launch of 7 Moncler Fragment Hiroshi Fujiwara.”
Meanwhile, Asia and the Rest of the World rose a powerful 32% and now account for almost 43% of total turnover. Japan was especially strong, also due to the launch of 7 Moncler Fragment Hiroshi Fujiwara, but China prospered too as the firm was able to cut some prices on the back of import duty reductions.
The Americas is a much smaller market for Moncler but sales there rose 17%, accounting for almost 15% of the firm’s total, while currency-neutral they were up 29%. The company said “very good results were achieved in the United States and in Canada, for both the retail and the wholesale channels, supported by the good trend recorded in the existing stores and the opening of new wholesale shop-in-shops.”
Globally, on the retail front, revenues grew 26% to €376.8 million while comparable sales were up 27%. Wholesale was strong too, although the rise was a smaller 8% to €116.7 million.
So what was the genius stroke that made all this happen? Well, the Moncler Genius collection lived up to its name. The company said that it saw success globally and met all its targets. And with the firm’s Go Beyond tagline/mantra in mind, the brand is predicting more of the same in the future, as well as more big projects.
In fact, on the call, Ruffini couldn’t disguise his excitement about the Genius debut, saying: “I'm very happy with the success of Moncler Fragment Hiroshi Fujiwara launch. It was our first Moncler Genius drop and actually, the most important one. The supply chain did a fantastic job. Our marketing division supported extraordinarily, along with our CRM, retail and wholesale teams, who did something, I believe, unique. I'm very proud of the energy that this project has generated, both inside and outside of the company.”
Ruffini also said in the results release: “Go Beyond is a principle that has always driven Moncler, and it is precisely what has inspired our new institutional campaign Moncler Beyond, an idea that has emerged by looking at our heritage, at our origins and arising from Moncler’s essence, capturing the strong values of its community.
“I’m convinced that our capacity to go beyond, to explore new frontiers, and break new ground, is what steers and guides Moncler, quarter after quarter, towards new heights that I, for one, find exceptional. The results we are releasing today once again, not only beat market expectations, but even our own estimates.”
But while success is undeniable and is expected to continue, Ruffini was also understandably cautious, acknowledging the tougher comparisons ahead.
Yet there’s plenty going on that should help the second half perform. Most notable is the arrival of the second Genius collection, Noir by Kei Ninomiya, that hit Ginza’s Dover Street Market on Tuesday.
COO/CMO Roberto Eggs also said that the Hiroshi Fujiwara Fragment collection had helped drive foot traffic upwards in its stores and attracted a good gender mix, despite being menswear-focused, while also drawing in customers who don’t usually shop with the Moncler brand. It’s to be hoped that the second collection does likewise.
But let’s leave CEO Ruffini with the last words: “We still have many Moncler Genius launches to complete, starting from 6 Moncler Noir Kei Ninomiya. We shortly open our flagship store in SoHo, New York, which will be the largest [directly-operated store/DoS] of the network, and we will finalise the relocation of other important stores like London Sloane Street and Copenhagen.
“More than 15 DoS are secured for 2018, including the nine open as of today. Last but not least, in October, we will launch the whole Moncler Genius Building project, with important pop-ups around the world. I would like to conclude by underlining that we are working on several important projects, with the aim to deliver what our new corporate campaign Moncler Beyond is communicating: To go beyond limits, expectation and generation.”
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