Chapter 6 - Moncler deep-dive, top selling in outdoors on Amazon & summer plan

Moncler - Deep-dive

The list of most powerful brands in outdoor wear last week got me thinking. In number 2, right behind The North Face, and in front of brands such as Patagonia and UGG, was Moncler. A brand that I knew a bit about - its French heritage etc., but I didn’t think it could be so big. Boy, I was wrong. It’s a c. $2.5 billion a year, publicly listed giant. And yet, it remains subtle. Perhaps it’s the Italian way. Although, to get to the heart of the brand we have to start in France, in 1952.

The origin of the brand’s name lies in its foundations. Moncler is a cross abbreviation of Monestier-de-Clermont, a mountain village near Grenoble in southeastern France. This is where René Ramillon and Andrè Vincent founded the company in 1952. Initially the brand focused on manufacturing tents and sleeping bags. In fact, their first foray into apparel was actually to make quilted coats for their workers, to keep them warm.

French mountaineer Lionel Terray first recognized the potential of Moncler products, leading to the creation of the specialist line "Moncler pour Lionel Terray." In 1954, Moncler's down jackets were selected to outfit the Italian expedition to K2, resulting in the first successful ascent of the world's second-highest peak by Achille Compagnoni and Lino Lacedelli.

In 1955, Moncler continued to ‘demonstrate its reliability’ by equipping the expedition to Makalù. This was quite a baptism of fire for the fledgling brand. But these high-profile expeditions cast Moncler into the limelight. Definitely a case of being in the right place at the right time. The brand quickly went from strength to strength and even boasted icons such as Jackie Kennedy, Brigitte Bardot and the Empress of Iran among their customers. Early influencer buy-in for the trips to the slopes!

The next watershed moment came before the 1968 Grenoble Winter Olympics, when Moncler was named the official supplier for the French national downhill skiing team. That same year, Moncler introduced a cartoon duck mascot named MonDuck, further enhancing its brand identity.

During the 1980s, under the creative direction of Chantal Thomass, Moncler transitioned from outdoor gear to urban fashion, becoming an iconic garment for a generation of young people. This was the first glimpse of Moncler as we know it today. The brand was staying true to its heritage, but wanted to push its market boundaries, which was brave. It did however have a captive audience. Brands such as Patagonia and TNF hadn’t yet made a major impact - indeed TNF didn’t really arrive in street apparel until the 90’s. Its original stitching and its lacquered effect in bright and unique colors were its trademark. Interestingly, in its earlier days the focus was very much on a younger demographic.

2003 was THE red-letter year for Moncler. The brand was struggling to achieve profitability, and rumor was that it was in danger of going under. Not so sure how true that is, as such stories are often exaggerated. What is true is that the numbers didn’t look good. Enter Remo Ruffini. In 2003, after working as its creative director for four years, Ruffini took a pivotal step by acquiring the luxury brand Moncler. It’s written:

“Ruffini did not seem like the savior Moncler needed so desperately. A school drop-out, he started his career working for his father’s mid-sized clothing company before embarking on modest success with two of his own clothing brands.”

But he was. He saw the potential to leverage off of the brand equity and reputation, and transfer Moncler into the luxury fashion niche. This wasn’t just a move to higher end. It was a move right to the top, from the hills in France. And wow, did he succeed. I’ve listened to lots of his interviews while researching this piece. And he echoes one point time and again. 2 rules - stay true to the brand’s heritage in the mountains - its DNA, and continuously innovate. His vision was to transform Moncler’s jackets from their niche positioning as a functional piece of clothing for alpinists and adventurers to a trendy, yet warm and comfy luxury fashion product.

Ruffini, an expert of brand rejuvenation, strategically relocated the company to Milan, Italy’s fashion capital. He oversaw a redesign of the jackets, enhancing their aesthetic with a glossy finish and introducing vibrant colors like red and blue. Positioning the jackets at a premium price point of approximately US$ 1,000, Ruffini targeted affluent, fashion-forward young consumers in Europe's urban centers. Moncler jackets quickly became a sought-after alternative to less stylish winter wear. Following this success, Moncler expanded its presence by opening its first five stores across Europe.

The next key moment came in 2008. To realize Moncler’s global expansion, Ruffini required a strategic partner. He lacked both the financial resources and the extensive network necessary for international growth, and neither he nor Moncler's top management had the expertise to scale the business to meet their new global ambitions. This critical partnership materialized with the involvement of the private equity firm Carlyle. The PE firm provided the capital (approx. $200m) in return for 48% of the company’s shares.

The Carlyle Group provided Ruffini with the international network and expertise required to drive global expansion and market consolidation, particularly in Asia. Leveraging their experience in scaling fashion and retail businesses through geographic expansion and bolstering proprietary online sales, Carlyle was instrumental in Moncler's growth strategy. Additionally, they assisted Moncler in recruiting top management talent from prestigious fashion houses such as Gucci, thereby strengthening the company's leadership team and positioning it for continued success.

It’s fair to say that Moncler is veering away from the outdoors at this stage, but I’m going to stick with it to finish the story, because it’s a brilliant example to analyze. By 2011, just three years after Ruffini partnered with Carlyle, Moncler's store network had expanded from the original five European locations to a global network of 56 stores. Additionally, Moncler launched its own online sales platform. Consequently, total sales surged by 150% within this period. More impressively, direct retail sales—from Moncler's own stores and online platform—increased from 13% to 58%. This is hugely significant as it preceded the D2C craze. Ruffini mentioned in several interviews that this was strategic beyond just the P&L. He wanted to keep close control over the product distribution, and own the whole customer experience.

As a PE fund, Carlyle had to attempt a return after a prescribed period. That period arrived by 2011 when they sold part of their stake to another investment firm, Eurazeo, for about $500 million. Carlyle’s remaining 17.8% stake was worth about $700m at the time.

There was other restructuring during this period, with manufacturing moving from France to Romania and the adoption of 3PL partners. While this restructuring was met with internal resistance, the net result was that Moncler had 100 employees in 2003. There were 3,500 by 2018.

An IPO of Moncler shares took place on the Milan Stock Exchange on December 16th 2013, with an initial value of €10.20 per share. Ruffini said that he realized they needed more money, but he didn’t want to get back pitching to new PE partners, so he felt this was the way forward. It also helped make ‘noise’ about the brand. The Italian stock exchange was an interesting choice.

In my opinion, one of Ruffini’s greatest achievements was the launch of Moncler Genius in 2018. Tagged ‘One House, Different Voices’, this was essentially a collaboration between the brand and various designers. The fashion industry traditionally holds biannual shows - Spring/Summer and Autumn/Winter. Ruffini wanted to buck this trend. He speaks about the need to have something to shout about every month - particularly for their social media engagement - so that’s exactly what he did. A monthly collection. This worked fantastically by keeping the brand relevant all the time. It also had the knock-on effect of giving the industry something new every month, hence also earning them a lot of unpaid media. Their industry was crying out for it. Nowadays their collaborations are wider, one being MATE .bike - a Crowdfunded electric bike start-up. And I think this is a template that can be followed outside of fashion. Monthly limited product releases? Bi-monthly? Monthly outdoor expedition by brand and collaborators? Something we’re looking closely at.

In 2021 Moncler acquired their first business - Stone Island. It’s a complimentary clothes brand, with attitude. The original lines were inspired by military uniforms in 1982. And in 2022 Moncler celebrated its 70th anniversary with an event in Milan - the Piazza Duomo. In the same year, Moncler launched a new chapter, evolving the brand into three dimensions – Collection, Genius and Grenoble – to reach broader audiences. Obviously a move towards even greater scale.

‘Alongside maintaining their brands’ identities highly independent and based on authenticity, the constant search for uniqueness and the extraordinary bond with the consumers’ communities…’

This is part of their vision statement - I say part of it, as it’s about one third of a sentence full of generic crap. I was disappointed to see this, and the fact that a lot of the information on their corporate website is dated. But I guess it’s a different beast now.

So, it’ll be interesting to see where to from here. Double down on brand, or chase the €79 Billion a year Louis Vuitton’s of this world. Having researched the president, and analyzed recent activities, I suspect the latter.

Conclusion

The Moncler story intrigues me. It’s an example of moving, literally, from the mountain-tops to the high street. I had no idea of its extreme outdoors history. Leveraging off its brand integrity, Moncler and Ruffini have executed brilliantly. And they have paved a different path. Patagonia, The North Face and others have pushed to the high street, but not to the luxurious extent that Moncler has. My wife described the brand as being at the exclusive end of luxury. But, it comes back to what was originally a great product functionally. And that was proven in the most extreme places on earth. That makes the story telling a little easier, right? Moncler’s move to the high-street wasn’t straightforward and Ruffini’s vision was key. “I believe our driving force lies in emotion.” Particularly the emotion of affluent people it seems. And he is to be applauded. Albeit, I think the authenticity is certainly diluted.

CRUA NPI - Step 3

Initial Design. Only after you’re happy that the first 2 steps are completed correctly, and that the results were accurate, do you move to design. Remember -look out for confirmation bias. It’ll ruin the process. You don’t want to be halfway up the wrong ladder..

At this stage I like to turn the rough sketches into actual drawings. I still do this myself, but you can get it done on Upwork or similar, without much cost. This is the beginning of a design brief - draft 1. Make sure to label the draft number on all info, so it can be kept track of.

I’d also suggest engaging with your manufacturing partner at this stage. While you don’t want to be swayed by them wanting to make it easier for themselves - tail wagging the dog, or so to speak - you should seek their opinion on the design. There are some changes and iterations that, if made at this stage can save time, money and gray hairs later on.

Once these initial designs and the initial consultation have begun, the first prototype can be planned for. And there are some important things to look out for there. We’ll dig a little deeper next week in step 4.

Hopefully you continue to get some value from the newsletter. Thanks for reading and please pass it on to anyone you think will benefit.

Until next Tuesday, and chapter 6, Go n-éirí leat!

Derek