Moncler closed the January-June period of 2020 with operating losses: it’s the 1st time in history since Remo Ruffini became head of the brand. Revenue was down by 29% even with double-digit growth in China and in the online channel during the second quarter.
“It’s hard to understand how the 2nd half of the year will evolve – commented Mr. Ruffini, president and CEO of Moncler in a note -. I think that the situation we are living now will have important consequences, at least in some parts of the world, for a few more months”.
The manager announced that among the countermeasures adopted there is the direct management of the e-commerce channel, a move that means the end of the partnership with YNAP.
In red for the first time in history
Moncler’s revenue for the first 6 months was of 403.3 million euro. The result is the outcome of the April-June period, during which Moncler’s sales decreased by 52% at constant rates, on yearly basis. The semester recorded a loss of 31.6 million euro, while net profits during the same period of 2019 were 70 million.
“In order to save the brand’s integrity – reads Moncler’s official statement -, the management decided to reduce orders for the Winter 2020 season, while all PE 2020 products that weren’t chosen for 2021 as well, have been sold for less to the market”. The loss taken on these goods was equal to 30 million euro.
Moncler hasn’t made any statement on the results for the 2020 fiscal year, but has mentioned that the brand doesn’t expect a quick recovery from the crisis.
Goodbye YNAP
The brand has also decided to directly manage its e-commerce, with the goal to double the channel’s weight within the next 3 years. According to analysts cited by Reuters, the group’s online sales are worth 10% of the total in 2019, between direct online sales and other multi-brand channels.
Before this decision, the luxury group was having its e-commerce activities managed by its partner Yoox Net-a-Porter (YNAP), with which the agreement expires this year.
Ruffini’s faith
There is a specific reason why Mr. Ruffini can maintain faith: 595 million euro of cash on hand. “The brand’s cash reserve reassures us for the future – he explains to La Repubblica – and even speculative investors have recognized, in the last few months, that we have been disciplined and have thought long-term when deciding on how to manage liquidity”.
How does Moncler plan to spend its reserve? “We will only invest if the opportunity is interesting enough: I have looked at many things throughout the last years – he concludes – but nothing was really worth it”.
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