Moncler Group's €3.1bn revenue and roughly 30% EBIT margins make it bigger than Burberry and closing in on Gucci.
Moncler's €1.15bn purchase of Stone Island's parent adds a brand now at roughly €400m revenue.
Remo Ruffini bought Moncler for about $1m in 2003 and still holds around 16% after its 2013 IPO.
Moncler's $1m puffer became a €3.1bn luxury compounder
Moncler is a mountaineering equipment maker that became a luxury brand twice, most recently when Remo Ruffini bought it for about $1m in 2003 and rebuilt it around a single puffer jacket. It compounds at roughly 16% a year with 30% EBIT margins, sustained by deliberate scarcity and the Genius designer platform. What is left is the US and China, and the risks are fashion's cycles and Ruffini himself.
Takeaways
Moncler compounds like a top luxury house. The group made €3.1bn of revenue last year, with the Moncler brand at €2.7bn and Stone Island just over €400m. The top line compounded at just over 16% over the decade, with EBIT margins near 30%.
Genius keeps the core collection growing. Genius, a multi-designer platform launched in 2018, has worked with more than 80 designers and keeps the core collection fresh. Grenoble recalls the technical heritage, and when Genius was quieter the core business grew more slowly.
Stone Island is the only acquisition. Moncler bought Sportswear Company for €1.15bn, 70% from the Rovetti family and 30% from Temasek. Stone Island has grown from €240m to about €400m of revenue, with direct-to-consumer up from 29% to 52%.
Growth has to come from America and China. The US is only about 14% of Moncler's sales, below most big luxury houses, while Asia is about half of group revenues. Grenoble boutiques and the Fifth Avenue flagship are the other levers, along with Stone Island's weakness in Asia.
Scarcity is the commercial strategy. Moncler limits supply on purpose, the way Ferrari does. It backs that with white goose down quality and a ban on live plucking, and with stores such as the Galleria in Milan and the Tokyo facade.
Cyclical fashion and one man are the risks. Gucci's margins have swung from 40% to the teens, and its slump after Alessandro Michele shows how fast taste turns. Moncler leans on Remo Ruffini, though Davies expects him to stay.
The lesson is to protect the brand. Richemont spent €500m buying back inventory and treats it as investment in the brand. Adidas was left with unsold Yeezy stock after splitting with Kanye West, and Davies's closing lesson is to protect the brand first.
From the slopes to the street
Moncler was founded in 1952 near Grenoble, making sleeping bags, tents and equipment for mountain workers and mountaineers.
In 1954 Lionel Terray collaborated on a line and the brand kitted out the Italian K2 expedition. Around the 1968 Grenoble Olympics it equipped the French downhill ski team.
In the 1980s it came down from the slopes to the streets, worn by Milan's Paninari subculture and celebrated in the Pet Shop Boys' 1986 song Paninaro.
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On this episode 2
Show 1
Remo Ruffini bought the brand for about $1m in 2003 and the operations in 2005, then floated it in 2013. Revenue grew from about $45m to roughly $450m by 2012.