What's Behind Moncler's Rapid Rise?

Index Moves is our monthly analysis of the biggest climbs and drops on The Jing Daily KraneShares China Global Luxury Index, which tracks the global market performance of the luxury sector. The Index relies on the Jing Daily Global Luxury Score and Jing Daily Brand Awareness in China Score in addition to fluctuations in market cap and stock closing price. Below, we highlight luxury brand moves for the month ending May 31, 2021. When May began, Moncler was in tenth place on the Jing Daily KraneShares China Global Luxury Index. Yet it was in first by the end of the month. It is one of several luxury companies that spent the month playing catch-up. “The laggards at the beginning of the year, particularly in the first quarter, are starting to perform well,” explains Thomas Chauvet, Head of Luxury Goods Equity Research at Citi. So far this year, Moncler’s share price is only up 17 percent, while the overall luxury sector is up 28 percent. Sensing an opportunity, investors have bought into Moncler, sending both its share price and ranking on Jing Daily KraneShares China Global Luxury Index upwards. Then there was the Swatch Group, which climbed from 24th to fifth place, also marking the Swiss watchmaker’s debut in the top ten. The brand's shares ended 2020 down 11 percent, so it still has ground to make up. Richemont, however, went from ninth to third place on the Jing Daily KraneShares China Global Luxury Index in May, largely thanks to better than expected full-year results. Swatch and Richemont might not stay ahead for too long, though. Both Swiss companies outperformed the market at a time when Swiss watch exports flatlined compared to 2019, according to data released by the Federation of the Swiss Watch Industry in May. And selling watches is the mainstay of Swatch, a key revenue producer for Richemont. Online retail is here to stay But the brand that saw the largest increase during May was Farfetch. The online luxury retailer leaped from 39th place to 11th, the strongest sign yet that online retail is here to stay. COVID-19 did much to shift luxury shopping online, but there were always fears that it was a temporary fix as customers couldn't shop in person. Then, in May, Farfetch reported a 46 percent jump in sales for the first quarter of 2021, even though lockdown restrictions were repealed in much of Europe and North America. Meanwhile, a new entry on the list, The RealReal, underlines this shift to online shopping after making its debut on the Jing Daily KraneShares China Global Luxury Index in May. The company sells pre-owned luxury items online, and its ranking (currently 39th) will likely rise further following Etsy’s purchase of Depop, another online retailer of pre-owned fashion, for 1.6 billion in June. Other new entries in May include Levi Strauss, Abercrombie & Fitch, and Shanghai Bailian, a Chinese department store group. What goes up must come down As various brands rose on the Jing Daily KraneShares China Global Luxury Index in May, some of 2020’s winners started to fall behind. Last year, while the world was ordered to stay at home, sales of athleisure wear surged. One year on, as much of Europe and North America reemerge from lockdowns, those sales have come down. As such, Nike, adidas, Lululemon Athletica, and Canada Goose all fell last month. Despite their fall, the Jing Daily KraneShares China Global Luxury Index climbed ever higher in May, ending the month at a record 353.5.

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What's Behind Moncler's Rapid Rise?