Remo Ruffini, the chairman and creative director of Moncler, who announced the company’s intentions for an initial public offering (IPO) on the Milan Stock Exchange and the retail managers visited Japan to give a presentation on growing business in Japan.
Mr. Ruffini acquired Moncler in 2003 and transformed the company into a luxury brand for down jackets. The company plans to go public on Dec 16. The stocks of the company will be publicly offered in Japan as well, without being listed on a Japanese stock exchange.
At the investor relations event held on Dec 9, Yuzo Yagi of Yagi Tsusho Limited, a business partner of the brand from 10 years ago, stated “We began to sell Moncler in Japan from 1996 as we saw value and promise for the brand. When we began to implement the same management style as that of Mr. Ruffini, who joined Moncler as creative director in 2003, sales, profits and brand recognition increased in Japan as well. People in Japan lined up in July, when it was still very hot to purchase the latest items for the upcoming fall/winter season. This proves the popularity of the brand. We have requests to open stores from up to 20 department stores, but we are making our choices based on a thorough analysis of which locations would be best.”
Next, Mr. Ruffini and other heads of the company made speeches incorporating keywords for success such as “tradition,” “creativity,” “quality” and “consistency.” Moncler’s products are the result of cooperation between designers and technicians, and the company does not enter license agreements or provide royalties. The company raised its creative communication style and thorough business management as some of its strengths.
For fiscal September 2013, the company recorded sales of 489 million euros and achieved a growth of 31.6% in two years from 2010. Its earnings ratio grew to 33.5%. The company places importance on improving distribution channels to achieve further business growth. As of this September, the company manages 24 shop-in-shops and 98 directly operated stores globally. The next step is to eliminate all outlets and convert all shop-in-shops to directly operated stores. The number of wholesale clients was 2,200 in 2010 and has gone down to 1,800 by September 2013. The plan is to further decrease the number to 1,650. In line with this, retail business accounted for 27% in 2010, which increased to 51% in September 2013. The target by 2017 is 70%. An e-commerce platform has also been set-up and will be further strengthened.
Directly operated stores play the important role of directly communicating the brand identity and understanding customer needs. The consistency of all Moncler store designs portrays a unified message. The brand opened its first directly operated store in 2006 at St. Moritz and the following year in Paris, the first one in a city. Since, the company has been opening an average of 20 new stores each year. This year, 15 new stores were opened by September. Another 9 are planned to open within the year. Approx. 18 new store openings are in the works in areas such as London, Tokyo, Hong Kong, New York, Moscow, Brazil, Mexico, Dubai and Istanbul.
New store openings are carried out based on visual merchandising and strict standards including the store location and size of store space. The goal is to make profits from the first year and cover all investment costs within 3 years. So far, all stores made profits from the first year, and on average, investment costs were covered in the first two years. Some stores were able to cover costs in the first year.
The luxury markets, primarily in Asia, have seen double digit growth in the past 3 years. Moncler seeks new markets and customers in such a time. Most of the sales of the company come from warm down jackets for winter, but the company focuses on creating other types of lightweight jackets suitable for warmer seasons. Knitwear and accessories are being expanded, and a collection for travel items has also been set up.
“Through the IPO, we hope to strengthen brand recognition in international equity markets, and attract investors and talent,” explained Mr. Ruffini. 10% of the equities will be publicly offered in Japan, the second largest market for the company after Italy.