Salem Radio Network News Sunday, May 22, 2022

Business

Moncler bets on store expansion, online sales to drive growth

By Claudia Cristoferi and Silvia Aloisi

MILAN (Reuters) -Italian luxury group Moncler said on Thursday it would open, refurbish or relocate 200 stores in the next three years, mostly in Asia, and raise online sales of its eponymous brand known for puffer jackets to 25% of total revenue.

The group, which in 2020 acquired streetwear brand Stone Island, also plans to further diversify from winter clothing.

Spring-summer collections will account for up to one third of revenues in 2025, and footwear will reach 10% of sales, it said in slides ahead of an investor presentation. It did not give a revenue target.

Currently about 75% of revenues come from outerwear, according to Barclays analysts, who cited knitwear as another diversification option for the brand.

By 2025, Moncler expects more than 50% of growth to come from China and the United States, the group said.

The store expansion plan – which covers 100 openings or renovations for the Moncler brand and 100 for the Stone Island label – sees up to 38 openings in Asia, including Japan and South Korea, 22 in Europe and the Middle East, and nine in the Americas in the next three years.

The group’s online sales stood at 15% of the total at the end of 2021, up from 10% in 2019, before the pandemic.

Moncler, which on Wednesday reported a 60% jump in first-quarter sales, has like most rivals seen revenues rebound in Europe and the United States as COVID-19 restrictions eased.

But it faces a setback in the Chinese market, the biggest for sales of high-end wares, where a strict lockdown has been imposed in the luxury hub of Shanghai and other cities since March.

On Wednesday it said around 30% of its main brand’s stores in China were closed because of the restrictions, up from 10% in March.

Just over a third of Moncler’s retail sales came from China last year but the brand is less exposed than rivals to risks of a prolonged shutdown as the second quarter is seasonally less important for its annual earnings, analysts say.

In its presentation, the group said its planned openings in China included a flagship store in Beijing, adding it would create a China business unit at its Milan headquarters and reinforce its organisation in the country.

(Reporting by Claudia Cristoferi and Silvia Aloisi; editing by Barbara Lewis)

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