MILAN, Italy — Moncler, the Italian luxury outwear brand with more than €1 billion a year in annual revenue, is changing creative course.
On Monday, the firm announced that it is ending its partnerships with designers Thom Browne and Giambattista Valli, longtime creative directors of its Gamme Bleu and Gamme Rouge sub-labels. Their Spring/Summer 2018 runway collections, which were shown this past June and October, respectively, will be the last of the "Gamme" lines, which will be discontinued thereafter.
“Both Giambattista and Thom agreed with me that Moncler had to move on towards new challenges,” Remo Ruffini, president and chief executive of Moncler, told BoF in an interview. “It has been a true honour for me to have worked with such unique talents and I am enormously grateful to Giambattista and Thom for their extraordinary work at Moncler. I will for sure miss both a lot.”
“It’s been a great run, and lots of fun for so many years. But, as we defined a new growth strategy for the Thom Browne brand, I have realised that my focus should be on my own business,” said Browne, who began designing Gamme Bleu in 2009. “The fact that this happened when Remo was starting to rethink Moncler’s future made our decision mutual and effortless. I wish to thank the teams who made things happen, together with Remo, who through the years has allowed me complete creative freedom.”
“Conceiving the wardrobe of the Moncler woman and infusing it with the Valli DNA was a real challenge. It brought creations for every moment of her life, from a morning in Gstaad to an evening at the Met Gala in New York,” said Valli, who first partnered with Moncler in 2008. “I want therefore to thank Remo for his foresight in choosing me for this exciting project and his support throughout these ten years where I was able to build a team and bring to life unique collections under the Moncler Gamme Rouge label.”
While Ruffini declined to share details on his future plans for Moncler, a move away from the runway collections signals his desire to bring more immediacy the brand. “The world has really changed since I started the Gamme project,” he said. “It’s more volatile than it was 10 years ago. This is the moment to make something for this world, with more energy.”
Early evidence of this shift in strategy can be seen at Moncler’s new 800-square-metre flagship on Via Montenapoleone in Milan, where products from different lines — including the “Gamme” collections, the main range and one-off collaborations — are merchandised together rather than separated into different departments. “The client wants something new every week, every month,” Ruffini said. “Before, it was six months to deliver a product. With more energy, with more deliveries, with more products, we can easily be at the top of the market.”
Not only is Moncler responding to changes in consumer behaviour, but the company is also facing increased competition from emerging players. “Moncler’s high growth rates and profitability have attracted newcomers as well as existing brands operating in contiguous business segments,” said Luca Solca, head of luxury goods sector at Exane BNP Paribas, in a May 2017 note. “While still dominant, Moncler’s market share is declining.”
For now, Moncler has managed to sustain double-digit growth. In the first nine months of 2017, sales at Moncler reached €736.8 million ($859.5 million at current exchange rates), up 15 percent from €639.3 million ($745.7 million) during the same period in 2016. Sales at its own stores were up 19 percent.
“Moncler is one of the few growth stories in the luxury goods sector at the moment,” Mario Ortelli, head of the luxury goods sector at Sanford C. Bernstein, told BoF earlier this year. “The company still has further opportunity to develop its offering into different products from outerwear as well opening stores, shifting their revenues from wholesale to retail.”
As Moncler moves further direct, creating a more responsive supply chain that better meets consumer demand will be of utmost importance. In October, Italian luxury powerhouse Gucci announced plans to revamp its production strategy, increasing vertical integration and reducing lead times.