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Moncler Shares Fall on New Strategy for Grenoble, Genius Brands

During the group's Capital Markets Day, chairman and CEO Remo Ruffini said Moncler will also invest in building its footwear category.

The Moncler Grenoble jacket in recycled nylon and recycled polyester. COURTESY IMAGE

MILAN — Remo Ruffini, chairman and chief executive officer of the Moncler Group, on Thursday laid out a new strategy for the luxury brand — but it got a quick thumbs down from analysts, who pushed the company’s shares down by almost 6 percent in the plan.

Four years after the launch of Moncler Genius, Ruffini is shifting gears and turning his attention to the Grenoble brand and Moncler’s main collection.

Moncler Genius has become a hub of creativity, freedom and global communication. I strongly believe in the Moncler Genius Model and in its ‘perennial’ development,” said Ruffini at the group’s Capital Markets Day in Milan on Thursday. However, “from today, Moncler Genius means also art, music, movies, sports, and much more…the way you combine them, makes a brand unique.”

Gino Fisanotti, chief brand officer, echoed Ruffini’s words, touting the next phase of the brand, which he sees becoming “stronger and more connected with the community. Genius is a platform for creativity” and after pairing with high-end designers, from Pierpaolo Piccoli to Simone Rocha, it will “expand as a platform into other businesses and industries, and allow more people to express themselves,” although details were not divulged.

Analysts seemed skeptical, however, with Moncler shares falling 5.6 percent to close at 44.60 euros on the Milan Stock Exchange.

Moncler Grenoble will reboot as “a high-performance” brand. Fisanotti pointed to the group’s legitimacy. “The brand is part of our DNA, it truly belongs to us and now we will double down on the technical aspect.”

A summer proposition will be explored as “consumer behavior has changed toward the mountains and a technical collection [works] year-round,” said Fisanotti.

Ruffini said that Moncler Genius accounts for between 5 and 10 percent of total sales.

Footwear, and sneakers in particular, are seen as an avenue of growth, as this division is “well below its real potential,” said Ruffini, aware of the “critical role” of the category in some markets such as the U.S.

Acknowledging the importance of building know-how in the category, Luciano Santel, chief corporate and supply officer, underscored that any potential takeover to this end would entail an acquisition of manufacturers, “not brands.”

In fact, responding to the possibility of adding other brands to the group, Ruffini said “there is still a lot to do with Moncler and Stone Island. I don’t see any [additional] aggregation in the midterm.”

Ruffini highlighted his goal for the group to become “a community magnet,” going “one-for-one, one-for-all digital,” and to embed sustainability across the board. “Consumers are simply people who have a transactional relation with the brand, they just come and go. We believe in the power of building and engaging with communities through long-term relationships,” he said, adding that “we will go beyond tier-one cities in their traditional luxury districts.”

In sync with this concept, Stone Island will focus on building a direct-to-consumer business. At Stone Island, the wholesale channel in the first quarter accounted for 76 percent of total sales, as reported. “The transformation will reflect what we did with Moncler early on, but we need to change the culture of the company and of people,” said Ruffini.

The goal is to open 100 stores in three years with a new concept, “less transactional and more experiential,” he said.

The first store to be unveiled with the new blueprint will be in Chicago during the fall and 50 percent of the network will be refurbished in two to three years. As of March 31, the network of monobrand Stone Island stores totaled 54 retail stores and 35 monobrand wholesale stores.

Carlo Rivetti, chairman and CEO of Stone Island, said the new concept will hinge on new sustainable materials and that “Chicago will allow the brand some fine-tuning before launching it globally in high-visibility cities.” He also noted that, over the past five years, Stone Island had already “been cleaning up its wholesale distribution” and that these additional steps were “not killing the channel, but improving it.”

Celebrating 40 years, Stone Island with the help of Moncler will be able to “spread its culture, talk with different audiences and languages and move into new territories,” said Rivetti.

The year 2022 is also a year of celebration for Moncler, which turns 70. Asked about whether he planned to stage an event during Milan Fashion Week with the new Genius format, Ruffini said there are plans to mark the anniversary in September in Milan, followed by seven weeks of other events around the world.

The Capital Markets Day was held after the release the evening before of the group’s first-quarter results, which saw the company registering a 61 percent jump in revenues, amounting to 589.9 million euros, compared with 365.5 million euros in the first quarter of 2021. Sales rose 58 percent compared to the same period in 2019.

Sales at the Moncler brand amounted to 473.4 million euros, up 30 percent compared to the first quarter of 2021 and up 27 percent at constant exchange rates compared to the same period of 2019.

Revenues of the Stone Island brand, which the group bought in 2020 and was consolidated from April 1, 2021, were up 32 percent to 116.5 million euros, compared with 88.1 million euros in the first quarter of 2021, and up 67 percent compared to the first quarter of 2019 at constant exchange rates.

Santel said that analysts’ consensus, which sees revenues totaling 2.4 billion euros this year and 2.7 billion euros in 2023, was “reasonable,” if the lockdowns in China wind down by the end of July. “We are aiming at a growth in sales of between 20 and 25 percent if conditions return to normal in China,” he said.

By 2025, Ruffini said the U.S. should account for 20 percent of sales, up from the current 15 percent and China “needs to represent 25 percent from the current 20 percent” of total revenues.

Santel was “not worried about the complexity of the supply chain. We are used to delivering on a monthly basis, with special projects. The key is to protect the know-how, technology and craft.” He cited the set-up of two academies to generate new technicians. He also said that, by 2025, the group expects to employ more than 50 percent low-impact raw materials.

Roberto Eggs, chief business strategy and global market officer, said the group is treasuring the lessons learned during the COVID-19 lockdowns, and that it will “move into omnichannel 3.0 by the end of the year, elevating the consumer experience.” Moncler has internalized its e-commerce in the past 12 months.

“We have built on our live-chats from the stores. Distant sales represented 17 percent of business and could become 25 percent of retail, leveraging our 2,500 client advisers and 250 stores,” said Eggs. “We need to push this information.” A new experiential store format was launched in Chengdu, to be followed by Shibuya, in Tokyo.

The group has partnered with the LeBron James Family Foundation to promote more diverse and inclusive projects, and with former Apple designer Sir Jony Ive “on innovative solutions and design,” said Fisanotti.


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