Remo Ruffini and Moncler: Chasing the Peak

Remo Ruffini is an Italian billionaire businessman, currently serving as the Chairman and CEO of the luxury company Moncler. From his early roots in picturesque Como, Italy, to Moncler’s acquisition of Stone Island, Ruffini’s career encapsulates a blend of innovative foresight and business savvy. Let’s take a closer look at him, and the company he’s helped back up on its feet, growing revenue and EBIT with a CAGR of 15% respectively, with EBIT margins consistently near 30% since its 2013 IPO.

• Entrepreneurial roots: Remo Ruffini, hailing from Como, Italy, utilized his fashion lineage and early business ventures, leading to his pivotal role at Moncler.

• Strategic transformation: Under Ruffini’s guidance, Moncler transitioned from potential bankruptcy to a luxury fashion mainstay, revolutionizing its brand identity and product range.

• Global expansion: Ruffini's strategic focus on Asia-Pacific, particularly China, aligns with Moncler’s growth, tapping into the region's burgeoning luxury market despite potential risks.

• Stone Island acquisition: The purchase of Stone Island marks Moncler's significant move towards a multi-brand strategy, expanding its reach and reinforcing its position in the luxury sector.

Born in the picturesque town of Como, Italy, in 1961, Remo Ruffini grew up immersed in the world of fashion, with both parents helming their own clothing businesses. He started his career at his father’s New York-based company, Gianfranco Ruffini Ltd., before returning back to Italy at the age of 23 to start his own venture, New England. His entrepreneurial nerve shone through early on when he sold this company to Stefanel Group and delved into creative consulting, eventually leading him to his current position as the CEO of Moncler.

In 2003, after working as its creative director for four years, Ruffini took a pivotal step by acquiring the luxury brand Moncler, originally founded in the French alps in 1952. At the time, Moncler was teetering on the edge of bankruptcy, but under Ruffini’s guidance, it has undergone a transformative rebirth. He started out revamping the brand’s identity, steering it away from its utilitarian roots (Moncler actually equipped the Italian expedition of K2 in 1954), towards the high peaks of luxury fashion. His strategic vision was clear: reinvent the iconic Moncler down jacket and transform it into a must-have fashion piece. Essentially blending the brand’s mountain heritage with metropolitan chic.

The fruits of this labor became more evident when Ruffini Took Moncler public in 2013. This after increasing sales from $45 million in 2003 to $489 million in 2012. The IPO price range was set between €8.75 to €10.2 per share, and at close, the market settled at the latter, valuing the company at more than €2.5 billion. Notably, Ruffini still owns 24% of the company as of March 2024.

Moncler is an iconic luxury brand primarily renowned for its high-end outerwear. The company has its origins in the French mountain village Monestier-de-Clermont (hence the name Moncler), close to Grenoble, where René Ramillon and André Vincent founded it in 1952. The iconic Moncler down jackets were as noted above originally used to protect workers and expeditioners against the harshest climate conditions. Something the company of course utilizes in marketing and branding efforts.

However, following the strategy of Ruffini, its offerings have been expanded to include knitwear, leather goods, footwear, fragrances, and accessories. All of which the company designs, produces, and sells. This is mainly done through direct-to-consumer (DTC) sales, including directly operated stores (DOS), direct online sales, and e-concessions. In 2023, the DTC channel accounted for 84% of Moncler’s total sales.

Moncler revenue growth by channel in Q4 2023. Source: Moncler Q4 2023, slide deck page 17

Moncler revenue growth by channel in Q4 2023. Source: Moncler Q4 2023, slide deck page 17

Then there’s wholesale. This channel includes sales to multi-brand stores, department stores, and e-tailers. Although Moncler is focusing more on DTC sales, wholesale remains an important part of its business. In 2023, wholesale revenues accounted for almost 16% of total sales. And lastly, effective from January 2024, is Moncler’s exclusive licensing agreement with EssilorLuxottica for the design, production, and global distribution of Moncler eyewear. Francesco Milleri, Chairman and CEO at EssilorLuxottica, stated the following about the agreement:

Geographically, having a spread that allows for targeting high-net-worth individuals and aspirational consumers is crucial for luxury brands. This has notably led to an increasing shift towards the Asia-Pacific region, which can perhaps largely be attributed to the region’s economic growth, increasing wealth, and the expanding middle class, particularly in China. China’s luxury market growth – driven by a surge in local consumption and the government’s initiatives to foster domestic spending – is further underpinned by post-lockdown “revenge spending.”

Luxury brands, not least Moncler, have been capitalizing on this trend. In 2023, Asia was the largest contributor for Moncler, with revenues of €1.3 billion, marking a 30% growth compared to 2022. EMEA (Europe, Middle East, and Africa) followed with revenues of €910 million, up 14%. And the Americas contributed €370 million, down 1% compared to 2022.

Expanding into the Asia-Pacific region, particularly China, is however not only associated with growth opportunities. While the region has shown strong growth potential and increasing luxury consumption, there are concerns to take into consideration. China’s “Common Prosperity” policy aimed at reducing income inequality could perhaps impact luxury spending patterns, to name one thing.

Since its IPO in 2013 however, Moncler has increased its revenue and EBIT with a CAGR of 15% respectively, with EBIT margins consistently near 30%.

Moncler recently held its Fall/Winter 2024 show, and not surprisingly the choice of location fell on St. Moritz, known for its breathtaking landscapes and status as a luxe winter destination. This helped form the perfect backdrop for Moncler Grenoble’s collection, which is designed for the slopes and aprés-ski elegance.

Ruffini himself has actually stated that he’s considering St. Moritz his second home. He first visited the Swiss skiing paradise at three years of age, and always went there as a child. He has a house there today, and whether he’s checking in on the Moncler Boutique, skiing, or mountain biking, it’s according to him a place where he can connect with nature and switch off the outside world.

Interestingly, the forest in front of his St. Moritz house inspired a Moncler Grenoble collection in 2013, when the company transformed New York’s Gotham Hall into a “human forest” of 370 people dressed in shades of green.

In 2020, Moncler bought the Italian outerwear company Stone Island for about €1.15 billion. This deal was Moncler’s first major acquisition, possibly signaling its strategic shift towards becoming a multi-brand group. The purchase price was about 16.6 times Stone Island’s EBITDA for 2020.

This deal brought together two prominent Italian brands, each with strong growth trajectories and distinct brand identities. Stone Island, known for its high-end streetwear and technical innovation complements Moncler’s luxury outerwear expertise. The deal was seen as a strategic move by Moncler to enhance its brand portfolio and capitalize on the growing luxury sportswear market, especially appealing to younger consumers and expanding to strategically important markets like the U.S. and Asia.

Since the acquisition, Moncler has continuously aimed at leveraging Stone Island’s strong brand identity and loyal customer base, while providing the infrastructure to accelerate its growth, particularly in DTC channels.

Remo Ruffini’s transformation of Moncler from near bankruptcy to a luxury powerhouse is an impressive feat. His strategic moves, particularly the Stone Island acquisition, signify Moncler’s expansion beyond premium outerwear, embracing a multi-brand strategy to capture new markets, especially in Asia. This forward-thinking approach has positioned Moncler as a key player in the luxury sector, continually innovating and expanding its global presence.