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Moncler CEO Ready to Restart Activities, React to Industry Slump

Moncler CEO Ready to Restart Activities, React to Industry Slump

(Bloomberg) -- Moncler SpA is ready to restart activities in Italy “as soon as possible” in a move that could lead the luxury outerwear maker to adapt its business plan, accelerating further with digital strategies.

Chief Executive Officer Remo Ruffini, 58, said the Milan-based company is preparing to restart once the government allows businesses to get back to work, and will then finalize collections for the next season.

Moncler CEO Ready to Restart Activities, React to Industry Slump

Italy, the original epicenter of the European outbreak, has begun to plan for when the country can emerge from its stringent lockdown as the trend of fatalities and new cases flattens out.

Still, it’s likely that only select industries, including agribusiness and companies linked to the health sector, will be able to open in mid-April, an official familiar with the discussions said.

Ready to React

Moncler is taking all possible actions to withstand the impact of the outbreak on its business and is aiming to keep its balance sheet healthy, the CEO said. “Moncler is solid and we are ready to react to a decline in the luxury sector,” even if it were around the 30% some analysts have forecast, Ruffini said in a phone interview Monday.

Goldman Sachs estimates an “unprecedented” 30% contraction in global luxury sales as its base scenario for 2020, according to a March 30 note, in which it keeps Moncler among its key picks in the sector.

Europe is among regions that will be hardest hit by a recession and fall in demand driven by an expected slump in tourism, while China, which relies on local demand, may cope better with the downturn, he said. “You also have to be careful about a possible second wave of contagion” and its impact, the CEO said.

Ruffini doesn’t rule out adapting the Moncler Genius initiative -- a project to roll out different designer collections on an almost monthly basis with a focus on digital, events and store rejuvenation -- to respond to possible changes in consumer behavior.

“On the consumer side it’s a real unknown how they’ll react,” he said. “We’ll see if Genius is still up to date or whether we’ll have to evolve it.”

Ruffini, whose investment vehicle owns a 22.5% stake in Moncler, bought the company in 2003 and turned it into one of the world’s hottest luxury brands.

At the end of last year Moncler attracted interest from luxury giant Kering SA, people with knowledge of the matter said at the time. Moncler is one of the most profitable luxury companies with margins for earnings before interest, tax, depreciation and amortization as high as 41%, in line with French powerhouse Hermes International.

Ruffini stressed that conditions will never be the same as before the coronavirus pandemic, saying this should push companies to be more creative. “All industries will be forced to learn how to dance in the rain instead of waiting for the storm to abate,” the executive said.

©2020 Bloomberg L.P.