Italian luxury puffer jacket brand Moncler is looking toward the future with optimism as it sets its sights on post-pandemic recovery. CEO Remo Ruffini believes that targeting younger consumers, specifically those in their twenties, and the Chinese market will be key to the company’s success in the second half of 2021. Luxury brands have been hit hard by the global health crisis, facing store closures, decreased demand, and a loss of Chinese tourists. In response, luxury companies are exploring innovative ways to attract customers, such as live-streaming collections and utilizing social media to promote and sell their products.

Moncler’s recent acquisition of Italian casual fashion brand Stone Island is part of its strategy to appeal to Generation Z shoppers. Stone Island has a strong following among younger consumers and aligns with Moncler’s goal of appealing to both luxury and streetwear buyers. Ruffini aims to position Moncler between high-end luxury brand Hermes and sportswear giant Nike. He believes that targeting younger generations and catering to the Chinese market will be crucial for the brand’s success in the post-pandemic era. According to consultancy Bain, Chinese consumers are expected to make up nearly half of global luxury goods sales by 2025, with the majority of purchases coming from individuals under 40.

Moncler, originally founded in 1952 with a focus on Alpine sports clothing, gained prominence under Ruffini’s leadership in 2003 when he transformed the brand’s puffer jackets into luxury status symbols. Since going public in 2013, Moncler’s market value has significantly increased and currently stands at 12.6 billion euros. Ruffini remains the largest shareholder with a 22.5% stake through a holding company. While the company anticipates a 15% decline in revenues this year, analysts predict a recovery in 2021 with projected revenues of 1.64 billion euros, slightly surpassing 2019 levels.

Ruffini expects a significant recovery to begin in July 2021, although he acknowledges that international travel may take several years to return to pre-crisis levels. He believes that while the first half of next year will remain challenging, the second half will bring about significant change. Ruffini has noticed that once stores reopen, consumers are eager to resume buying both in physical stores and online.

The acquisition of Stone Island allows Moncler to broaden its offerings and target a different market segment. Stone Island, with its more affordable price range compared to Moncler’s high-end jackets, has experienced consistent revenue growth over the past decade. It is expected to see a 1% increase in sales to 240 million euros in 2020, an impressive achievement considering the overall decline in luxury goods sales. This partnership also strengthens Moncler’s presence in men’s ready-to-wear fashion, which is currently growing at a faster rate than women’s fashion. Additionally, it reduces Moncler’s reliance on the winter season and opens doors for expansion in Asia, where the brand currently has limited market presence. The goal is to double Stone Island’s sales within the next five years.

Ruffini points to the increasing overlap between luxury and casual wear, a trend that has been accelerated by the COVID-19 pandemic. He cites examples such as Louis Vuitton’s collaboration with streetwear entrepreneur Virgil Abloh and Christian Dior’s partnership with Nike for sneakers. Luxury brands are also directly targeting customers in Asia, where sales have surged as lockdown restrictions eased earlier this year. Moncler plans to host its Moncler Genius event in China next year, reaching a potential audience of 150-200 million people. Ruffini emphasizes the importance of mastering social media platforms like TikTok, Weibo, and WeChat to effectively connect with target customers.

Moncler already generates 43% of its revenues from Asia and plans to open two more stores in China in 2021. The company aims to double its online sales within three years, building on the 10% of revenues generated through e-commerce in 2019. Although Moncler has long been seen as a potential acquisition target, the Stone Island deal demonstrates the company’s ambition to become a predator rather than prey. This move could be the first step towards creating an Italian luxury hub in an industry largely dominated by French luxury conglomerates LVMH and Kering, both of which have acquired several Italian brands in recent years. Regardless of these ambitions, Ruffini’s primary focus is ensuring that the two brands can grow together harmoniously.

Useful links:
Business of Fashion – Moncler Targets Younger Consumers, Chinese Market for Post-Pandemic Boom
Reuters – Moncler banks on younger, Chinese consumers for post-COVID progress