Moncler thrives in China as rivals falter

The Chinese retreat from luxury is undeniable, as reflected in the full-year 2024 performances of major brand owners like LVMH and Kering — despite mild Q4 upturns. The latest results from Moncler Group on Thursday brought some light to the darkness. The Italy-based fashion house, which acquired Stone Island in 2020, posted a solid revenue increase of 4% on a reported basis, reaching €3.1 billion ($3.24 billion). Of this, the high-end outerwear Moncler brand generated €2.7 billion ($2.82 billion), up 5% on a reported basis. Unlike most luxury rivals, full-year sales in Asia, including Asia Pacific, Japan, and Korea, surged by 7% (11% at constant exchange rates), “supported by a return to solid double-digit growth in mainland China,” the company said. Sales to Chinese traveling outside of China experienced double-digit growth in Q4. This comes despite a high comparable base and challenging macroeconomic conditions that have affected consumer confidence and gotten the better of other luxury players. Japan, Korea, and the rest of Asia Pacific also performed well, all accelerating year over year. In an evening earnings call, CEO Remo Ruffini said the results were “remarkable.” Ruffini added in a statement: “Both Moncler and Stone Island delivered double-digit growth in the DTC (direct to consumer) channel while maintaining a resilient 29.5% EBIT margin, underscoring the strength of our business model and operational discipline. “As we move into 2025, we see a still uncertain global macro environment. Yet, we are confident in our abilities to navigate the future inspired by what we’ve believed since day one: never compromise, never get bored so we don’t bore others.” Authenticity pays off Moncler seems to have won over Chinese luxury shoppers by sticking to these core principles and using events and new stores to boost its visibility. The October 2024 Moncler Genius showcase in Shanghai, which closed Fashion Week, featured a live show experience that was the biggest ever hosted by the brand. The City of Genius was set in a 30,000 square-meter space to create 10 designer neighborhoods, each representing concepts where luxury, art, design, entertainment, and culture converged. They featured Hiroshi Fujiwara, Palm Angels, Mercedes-Benz by Nigo, Willow Smith, A$AP Rocky, Donald Glover, Lulu Li, Jil Sander, Rick Owens, and Edward Enninful. The project had a colossal reach: more than 8,000 guests attended in person, while the livestream attracted 67.5 million viewers across digital platforms. This led to a total engagement of 896 million people globally, according to the Moncler brand. Ruffini said that this type of event “is what makes our brands truly distinctive” and had redefined the concept of brand experience. Other factors have also helped Moncler in China. As Roberto Eggs, chief business strategy and global market officer of the Moncler Group, said during the call, “The results in the Chinese market have not come by chance but due to a number of elements we have been putting in place. These include a good understanding of the Chinese consumer, helped by a local team, as well as knowledge of Chinese culture embedded in different departments in our head office.” Dominating the outerwear niche Eggs added that Moncler is one of the few brands, and possibly the only go-to brand in China, for luxury outerwear. “So when people start thinking about winter, we are absolutely top of mind, and there is no real competitor in the market — at least not in our positioning.” “When people start thinking about winter, we are absolutely top of mind, and there is no real competitor in the market — at least not in our positioning.” Chinese interest in outdoor activities post-Covid has been another factor in the brand’s success, and Moncler expects this trend to continue. The brand’s distribution footprint has also increased, though at an operational level, discussions with landlords have evolved over the past five years. “They are now the ones proposing better locations for Moncler because we are providing an interesting alternative in their malls, and we are also a traffic builder,” Eggs explained. Since January 2022, Moncler’s stock has experienced a rollercoaster ride. After falling to a low of €46.30 in November last year, it has been on a strong rebound, closing at a 2025 high of €63.74 just before Thursday’s earnings call. As a key component of the KraneShares Global Luxury Index ETF (KLXY), which tracks leading luxury stocks, Moncler’s performance highlights its role in the sector’s resilience. LVMH, Kering struggle In contrast, the world’s biggest luxury group, France’s LVMH Moët Hennessy Louis Vuitton, has seen its stock drop by 11.3% year-to-date. Its share price fell sharply at the end of January after it announced revenue of €84.7 billion ($88.57 billion), down 2% on the previous year, with profit from recurring operations sliding by 14% to €19.6 billion. After reaching a 2025 high of €754.80, the stock fell below €700 and is now showing signs of a slight recovery. Sales at LVMH’s Wines and Spirits division contracted by 11%, with cognac and spirits sales in China down even more as consumer demand dried up. This affected Hennessy in particular, though new collabs this year might land well. Billionaire LVMH chairman and CEO Bernard Arnault was, nonetheless, positive on China’s future as a luxury market. He said, “The Chinese government is now aware of the need to kick-start the economy. Secondly, our high-quality products are still extremely desirable. I expect to see a gradual recovery in China and to get back to a normal situation after two years.” Meanwhile, Kering’s fortunes are very much tied to Gucci, the biggest brand in its portfolio. With last year’s revenue down by 23%, driven by reduced Chinese demand, the label is in need of a refresh strategy. Kering’s stock has also been on a precipitous slide since its mid-2021 high of €741.70. Today, it closed at €275.20, and over the past year, it has fallen by 35%. Hermès’ full-year results will be out tomorrow at 3 a.m. EST.

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Moncler thrives in China as rivals falter