MILAN — “Now we are a family,” said Remo Ruffini.
The chairman and chief executive officer of Moncler SpA on Tuesday expressed his excitement at introducing a conference call with analysts as “the first time we include Stone Island.” The Italian brand, which Moncler took over in December, was consolidated in April, and Ruffini said he was “happy with the things done to set the pillars to grow Stone Island,” commenting on the group’s performance in the first six months of the year.
In the period ended June 30, net profit amounted to 58.7 million euros, which compares with a net loss of 31.6 million euros in the first half of 2020. In the first half of 2019, the company reported a net profit of 70 million euros.
In the first half of 2021, revenues rose 54 percent to 621.8 million euros, compared with 403.3 million euros in the first half of 2020, and the figure was a 9 percent gain on the first half of 2019.
Ruffini acknowledged a “still very challenging environment” but noted that July “started very well, after a further acceleration in the second quarter” of the year. The entrepreneur touted a “solid cash position, and we look into the future and the uncertain sanitary reality we have to coexist with, but we are ready, relying on two brands, product, ideas, flexibility and people to make it happen.” He admitted “building a strong brand has always been my obsession” and trumpeted his belief in “a stronger, even deeper consumer-centric organization, set and ready for the future, redefining luxury.”
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The call was also the first to include Gino Fisanotti, who joined the group in June in the newly created role of chief brand officer and touted its “incredible potential.” As a Nike veteran, he was asked about the footwear category for both Moncler and Stone Island, which has worked with Nike in the past. “Both have a healthy sneaker business, but we will unleash opportunities engaging with consumers to unlock a critical market,” Fisanotti said.
In the first half, sales of the Moncler brand rose 40 percent to 565.5 million euros compared with the first half of 2020. They were up 1 percent compared to the same period in 2019 at constant exchange rates. The brand reported an acceleration in the second quarter, increasing 118 percent to 200.1 million euros, compared with the second quarter last year and up 5 percent at constant exchange rates compared with the second quarter of 2019, despite the impact of the COVID-19 pandemic in the second quarter, especially in Japan and the Europe, Middle East and Africa region. Local shopping helped the performance, as did strong double-digit growth in the U.S., China, South Korea and online.
Ruffini and Roberto Eggs, chief business strategy and global market officer, emphasized the success of internalizing Moncler’s e-commerce, which was previously managed by the Yoox Net-a-porter Group. After taking the U.S. site in-house last September, Eggs admitted the Europe, Middle East and Africa region, internalized in May, was “more complex” comprising 33 countries and 22 different payment methods, but he touted the double-digit growth of the channel. Fisanotti also underscored the investments that will be made to leverage “a bigger, more effective and more efficient” digital platform.
The Stone Island brand posted sales of 56.2 million euros in the second quarter of 2021, showing a solid performance in all markets and channels. The company said that, if Stone Island had been consolidated since Jan. 1 this year, revenues in the first half would have been 709.9 million euros.
In the second quarter of 2021, Stone Island showed growth in Italy, which accounted for about 20 percent of total revenues, and in other European countries. Growth was very strong in the wholesale channel, which made up 72 percent of the brand’s total revenues for the period. The increase of online revenues as well as new store openings in China and the U.S. lifted direct-to-consumer sales. Chief corporate and supply officer Luciano Santel said based on its performance, it was fair to believe the brand would grow by 30 percent by the end of the year.
As of June 30, the network of monobrand Stone Island stores comprised 30 retail and 56 monobrand wholesale stores. A retail roll out for the brand is planned for 2022, with five to 10 openings year-on-year, Eggs said.
In the first half, the group’s operating profit amounted to 92.8 million euros, or 15 percent of revenues, compared with an operating loss of 35.5 million euros in the first half of 2020.
In the Asia region, which includes the Asia Pacific, Japan and South Korea, revenues climbed 56 percent to 282.5 million euros, accounting for half of the company’s revenues. Compared to the same period of 2019, sales in that area were up 15 percent.
In the second quarter, revenues in the APAC region recorded double-digit growth compared with the same period in 2019, mainly driven by mainland Chinese, where revenue almost doubled compared with the second quarter of 2019. Eggs also touted the performance of South Korea, with strong double-digit growth compared to the same period in 2019. Conversely, due to the tightening of pandemic-related restrictions, revenue in Japan slowed in the second quarter and was negative with respect to the second quarter of 2019.
In the EMEA area, sales in the first half grew 9 percent to 187.7 million euros, representing 33.2 percent of the total, while they were down 20 percent at constant exchange rates compared with the first half of 2019, with an improvement in the second quarter also thanks to the loosening of restrictions put in place to contain the pandemic. Specifically, in the second quarter, the U.K. and Germany significantly outperformed the regional average.
Revenues in the Americas climbed 91 percent to 95.2 million euros, representing 16.8 percent of the total. They increased 17 percent compared with the first half of 2019, accelerating in the second quarter (up 40 percent compared with the second quarter of 2019).
In the first half, the directly operated distribution channel produced revenues of 418.4 million euros, up 39 percent and representing 74 percent of the total. The e-commerce channel continued to grow strongly, showing triple-digit growth on 2019.
Like-for-like sales were up 41 percent compared with the first half of 2020.
The wholesale channel grew 43 percent to 147.1 million euros, driven by strong reorders, especially in the American market, and by e-tailers.
As of June 30, there were 224 directly operated Moncler stores, and 63 wholesale shops-in-shop.
Eggs said price adjustments could be made next year, without providing details. Brands are facing increasing costs across the supply chain, from raw materials to shipping costs.
In the first half, capital expenditure totaled 49.8 million euros, compared with 36.7 million euros in the same period last year, and mainly channeled into the development of the distribution and IT, as well as the expansion of the production sites. Santel said he expected capex to amount to around 130 million euros in 2021.
Free cash flow in the first half of 2021 was positive and equal to 51.0 million euros, compared to the negative cash generation of 74.2 million euros in the same period of 2020.
The net financial position stood at 233.9 million euros in cash, compared with 855.3 million euros at the end of December last year and 595.1 million euros at the end of June last year, including 551.2 million euros cash out for the acquisition of Stone Island and 118.3 million euros for dividend payments.
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