Moncler's bet on the supply chain

Moncler's next challenge will be in the footwear sector and in the diversification of its communities through three distinct dimensions, Moncler collection, Grenoble and Genius as well as stores with a renewed format. This strategy will start at the end of fall with a first test in the Chicago store, as anticipated by chairman and ceo Remo Ruffini during the Capital markets day of the group held yesterday in Milan.

The spotlight is on the Italian supply chain, specifically in the footwear sector, where acquisitions have been planned to implement the brand's know-how in the segment. «Moncler’s footwear business has increased a lot but is still well below its real potential. Now we are ready to accept this challenge», Ruffini stated. «We know that sneakers are a must for our communities and we also know that footwear will help unlock the potential of the Us market». Footwear will be further developed to become an increasingly important sector to reach new audiences, aiming to represent 10% of Moncler's total revenues in 2025.

«We are not aiming at brand acquisitions, but at structures with already developed skills to serve the group», Luciano Santel, chief corporate & supply officer of the company, explained. «Preserving Italian craftsmanship is one of the keys to our success and since we are growing, but production capacity is not unlimited, we aim to expand it». After that of Stone Island, no other brand acquisitions are planned in the medium term. «It could happen again in the future, but now we are not focusing on this type of operation», the management specified. A great confidence in the performance of the current fiscal year was also expressed.

After having closed an excellent first quarter with a 589.9 million euros turnover, a 60% increase year-on-year at constant exchange rates and a 58% increase compared to pre-pandemic levels, analysts' consensus estimates a 19% increase in 2022 revenues. Is it a cautious estimate? According to the company, it is under normal circumstances. «We are aiming to exceed a 20% increase, up to 25%. Thanks to our execution capacity, we are able to do that, provided mainland China will recover by the end of summer», Santel stated. «If the health emergency in the country will not be over by the beginning of the third quarter, the situation will be more problematic».

In these first three months of the fiscal year, however, the Asia Pacific region was driven by double-digit growth in the Chinese market, although March results were impacted by lockdowns in some cities, including Shanghai and Shenzhen, and the subsequent closure of approximately 10% of the store network. Lockdowns continued in April and currently about 30% of stores are temporarily closed. Regionally, China and the Americas are generally confirmed as two focus areas that will contribute 50% of the projected sales growth in 2024.

Another priority for Moncler will also be the strategic development of both new and existing communities and, for this, the brand will focus on three specific target audiences across its three dimensions. Moncler collection will primarily target the Gen X and Millennials community and Moncler Genius will target Gen Z, while Moncler Grenoble will primarily target Active Millennials. Each of these three divisions will feature dedicated and consistent design, merchandising and marketing. In line with this vision, the store network, with differentiated store formats and merchandising, will also follow the new community-focused strategy by being developed in those cities or areas where subcultures are born and grow.

«By 2024, there will be 100 stores opened, relaunched or renovated, also with a growth in average sales area», Ruffini announced. «The first test will start in late fall in our Chicago store». In addition to retail, the digital channel will also be further developed and it is estimated that online sales will reach 25% of the total with 100 million visits to the official website by 2024.

Finally, two new partnerships have been announced. One with Sir Jony Ive to explore innovative solutions and new designs and one with the Lebron James Foundation to support, integrate and develop new opportunities for the black community in America and around the world. Now we look forward to September, with a maxi event on the agenda to celebrate 70 years since Moncler was founded. «The celebrations will start in Milan and then continue with a series of stops around the world for the following seven weeks», Remo Ruffini revealed. (all rights reserved)