Italian luxury outerwear brand Moncler has announced that it will not be paying dividends on its 2019 results due to a significant decline in sales in the first quarter. The company reported an 18% decrease in sales during this period, largely due to the global coronavirus pandemic.

Initially, the outbreak of the virus had a major impact on China, which serves as a key market for high-end fashion brands like Moncler. However, the virus quickly spread to other countries, leading to lockdown measures being enforced in various European states, including Italy and France, as well as in the United States.

Moncler, which has experienced robust growth in recent years and has become a leading luxury fashion group, has decided to suspend all non-essential projects, including specific advertising campaigns. The company aims to minimize its total capital spending by 30% in order to navigate the current economic challenges it faces.

In the first quarter of 2020, Moncler’s revenues reached 310 million euros ($335.58 million), slightly surpassing the average analyst estimate of 304 million euros, according to data from Refinitiv.

The fashion industry as a whole has been severely impacted by the coronavirus pandemic, resulting in significant declines in sales and revenues for many brands. Luxury brands, in particular, heavily rely on Chinese and other Asian shoppers, whose purchasing power has been greatly affected by the outbreak.

Moncler’s decision to forgo dividends on its 2019 results highlights the brand’s commitment to conserving capital during these challenging times. By reducing capital spending and focusing on essential projects, the company aims to mitigate the financial impact of the crisis and ensure its long-term sustainability.

As the coronavirus pandemic continues to disrupt global markets and consumer behavior, luxury fashion brands like Moncler will need to adapt their strategies to navigate through these unprecedented times. By making prudent financial decisions and concentrating on their core offerings, these brands can increase their chances of weathering the storm and emerging stronger in the post-pandemic era.

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