Italian fashion group Moncler has announced a first-half operating loss for the first time in its history, as the COVID-19 pandemic and subsequent lockdowns hit sales hard. The luxury goods industry as a whole has experienced a significant decline in revenues during the crisis. Moncler has not provided a forecast for the rest of the year, but its Chairman and CEO, Remo Ruffini, has expressed uncertainty regarding the second half of the year, due to the ongoing crisis.

During the lockdowns, sales in Moncler’s main markets dropped by approximately 50% in the second quarter, which was in line with analysts’ expectations. The first quarter also saw an 18% decline. The company reported a loss of €35.5 million in earnings before interest and taxes (EBIT) for the first half of 2020, compared to a profit of €102.6 million in the same period last year. The loss was primarily attributed to writedowns of €30 million to cover unsold inventory from Moncler’s Spring/Summer range.

Despite the challenges faced, Moncler has been one of the best-performing luxury groups in the industry, thanks to a successful makeover under Ruffini. However, the company announced in April that it would be canceling its 2019 dividend following the sales drop in the first quarter.

To adapt to the changing retail landscape, Moncler has revealed plans to bring its e-commerce channel in-house. The company aims to double the share of its online business over the next three years, capitalizing on the growing importance of online sales. Analysts state that e-commerce has experienced double-digit growth in the first half of 2020 and accounted for approximately 10% of Moncler’s total sales in 2019.

The long-term impact of the ongoing crisis on Moncler and other luxury brands remains uncertain. As the virus continues to affect consumer behavior and disrupt global markets, companies will need to adapt and innovate in order to survive and thrive in these challenging times.

Useful links:
1. Moncler Reports First-Half Operating Loss Amidst COVID-19 Crises
2. Pandemic Causes Moncler to Report Operating Loss for First Time