China, South Korea Power Moncler’s Growth Streak

The Italian luxury brand Moncler seems unstoppable these days. Despite the global retail industry going through turbulent times thanks to geopolitical uncertainties like Brexit and the U.S.-China trade war and the economic slowdown in the Chinese market, the high-end skiwear maker still managed to kick off 2019 on a successful note. On May 10, the company reported double-digit growth at 11 percent at constant exchange rates (14 percent at current exchange rates) in the first quarter of 2019 from the prior year, with revenues reaching 425 million (379 million euros). Both the China and South Korean markets contributed significantly to this positive performance, marking the brand’s 21st consecutive quarter of growth since it went public on the Milan Stock Exchange in late 2013. “China mainland and Korea are the best-performing markets [of the quarter],” said Luciano Santel, Moncler’s chief corporate and supply officer during the conference call. Meanwhile, the investor relations director Paola Durante noted the 2019 Chinese Lunar New Year, which was a seven-day public holiday and an important occasion for gift-giving among Chinese families and friends, gave a solid boost to the business. Durante further noted an acceleration of consumer demand from Chinese customers and travelers since March of this year. The business in other key geographies grew evenly as well. The North American market, which includes the United States and Canada, increased nine percent in revenue year-on-year, while regions of Europe, the Middle East, and Africa grew by 12 percent in revenue year-on-year. The day before the earnings report, Moncler unveiled their latest 'Genius' collection, designed by Comme des Garçons alumni, Noir’s Kei Ninomiya. The Moncler Genius Project is a retail experiment that the brand created in order to increase awareness and alter the public perception of Moncler. “It is more conceptual but less commercial — not to create volume, but to bring a stronger perception of us,” said Santel. In 2018, the Moncler Genius Project accounted for around 10 percent of the brand’s full-year sales, which Santel expected to remain at around the same level this year. Moncler’s strong first-quarter earnings, which follows the same positive momentum experienced by luxury rivals Hermès, LVMH, and Kering, again confirmed much speculation that 2019 will see the gaps between different luxury Maisons continue to widen. That means strong players will further expand, while weak ones will continue to lose relevance. However, Moncler is cautious about the uncertain macroeconomic outlook going forward. “Whatever the economic scenario, what makes a brand successful is its strength….We will keep investing in all kinds of aspects of the company,” said Santel. Travel retail, for instance, is an area of potential growth for Moncler. The brand is set to open stores at least at 10 international locations this year in cities like Paris, Zurich, Istanbul, and Beijing, and four of them have already been completed the past Q1.

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China, South Korea Power Moncler’s Growth Streak