Remo Ruffini on Moncler, seasons, possessions and the next step in luxury
Moncler, which announced impressive results for 2018 on Thursday, is one of Italian fashion and luxury’s greatest success stories this century. And the individual who gets the most credit for that is its CEO and shareholder of reference, Remo Ruffini. He first bought majority control back in 2003, when the brand – born in Grenoble, France in 1952 – had largely fallen asleep.
By 2008, the giant American private equity firm Carlyle had acquired 48%; by December 2013, Ruffini led it onto the Milan stock exchange, with a market capitalization of 2.5 billion euros. Today, remarkably even given the hothouse pricing for luxury marques, it is worth over 8 billion euros.
After introducing a couture and luxe menswear element with Moncler Gamme Rouge and Moncler Gamme Bleu collections designed by Giambattista Valli and Thom Browne respectively, Ruffini suddenly changed tack last year. His latest re-invention: Moncler Genius, where a gang of hot designers make capsule collections that roll out more or less monthly in Moncler’s worldwide network. In the latest iteration in Milan last week, these included names like Simone Rocha, Craig Green, Palm Angels and Hiroshi Fujiwara of Fragment.
Remo is from Como, north of Milan. His father and mother both had fashion brands. After they separated his dad moved to America and his mum stayed in Italy. He has the drive, ambition and belief in the future of an American, and the personal style, artistic tastes and optimism of an Italian.
So, we caught up in Milan with Remo (pronounced ‘Ray Mo’), for a candid talk, and some insights into how he made Moncler a mega success; his future plans and his next moves outside the ultimate puffer label.
FashionNetwork.com: Why did you decide to launch Moncler Genius?
Remo Ruffini: Let’s go back a couple of years, and when we decided to go from a seasonal business to a monthly business. There was also a giant change: digital, where people shop every day online, and search for new products every day. So, I said, let’s try to move the company to these ideas.
So, last June we started the first deliveries with this model. It’s the right way for our company to work. It means every month we have a project. Which is very Moncler, very linked to our DNA; a nuclear activity. We can build a story every month and talk and socially network every month. History is made today by building up a community; and if you have a strong one you have to talk to them every day.
FNW: How did you choose these designers?
RR: We started with eight and now have nine. Basically, my idea was to cover the year all round. Roughly, we make eight deliveries each year; we don’t deliver in January and August. I always think about all generations. My strategy is to have kids using the jacket on the skateboard, all the way to couture like with Giambattista (Valli) and now Pierpaolo (Piccioli).
Hiroshi was good for young kids; Francesco is much more street. Palm Angels is street, skateboard and fantasy; Richard Quinn, young and smart. Simone Rocha, sophisticated ladies. Then Craig who is very conceptual, and very strong in men’s.
FNW: Are you not concerned that this gets confusing in your stores?
RR: But the idea is to make the delivery and sell all the product within one month. So, every month you find different ideas. Then we try to re-unite all the brands of the season to have at least two or three months where you have the whole project in store. Last year we also opened three Genius pop-up stores, in NYC, Aoyama and Printemps in Paris. Small, but enough to contain the whole concept. For sure, we made mistakes, since not many people have done this in our industry. Sometimes too much product, sometimes they came on top of each other. Also, we didn’t maybe have enough time to talk to the customer.
FNW: What percentage of company sales is Moncler Genius?
RR: Small, and I want to keep it tight. At least three percent, but not as much as 20. But towards 10, but don’t insist. The idea is to really sell the product in one month; that means about 20 good days of retailing.
FNW: The down jacket and outerwear represents 75% of Moncler business. Otherwise it’s knitwear, jerseys and sweatshirts. Moncler Genius is made in Italy only with sub-contractors. Moncler’s classic gear is made in Romania, a company plant employing some 1,000 people. It accounts for some 25% of total product. You closed Moncler’s facilities in France. Why close down the historic plant?
RR: Logistical problems. In the end, our company is based near Venice and a plant in Grenoble is a 7-hour drive.
FNW: Why did you finish working with Thom Browne and Valli?
RR: They each wanted to seriously build up their own companies. Thom sold to a private equity company, then to Zegna. Valli is now a partner with a Kering company. Plus, if you want to change from seasonal to monthly we had to change approach.
FNW: You get plaudits of taking a historic brand and stretching its concept. How much further can you go?
RR: The brand was very small when I bought it but very nice. Less than 50 million annually. The idea is to keep the roots, the down jacket, and the mountains but give something extra to the customer. We made a big step in last 15 years, but today you cannot make too many plans. You just need to follow the people.
FNW: A key element in rebuilding Moncler was staging epic shows, starting in NYC with a famed installation in a giant bank, inside of which hundreds of models on three layers were pinned against a massive spinning top; or a mass dance routine outside Lincoln Center All a bit of a risk? Why did you do that?
RR: Honestly. Not a risk, a little the opposite. I didn’t have that much money to invest in marketing at that time. So I said let’s do a strong show in NYC to reach a global audience. If you consider how much a page in a Vogue or Marie Claire in several countries costs that quickly becomes quite a lot of money. So less than one million on a show does not seem so bad. At that time, we realized social networking had become important, so having a big show had a big reach, especially in China. It made us look so much bigger than we were. That was my main goal! Exactly!
FNW: I skied in Courchevel at New Year’s and discovered you have store high up on the slopes. How did that happen?
RR: We give customers a backpack and you put the jacket inside and you can ski away. It’s a very good business. Now we have opened a store in the village. They are both still alive and doing very well. We now have almost 220 stores worldwide. Plus, we have concessions in Europe, and in America we do wholesale – shop-in-shops with Barneys and Bergdorf. We give the product and they manage. In Europe, with Harrods, and Selfridges and Galleries, it is based on concession.
Worldwide we have around 1,000 doors. For China, we believe that travel retail will become very important. Shops in airports – we don’t have many – so we plan to develop 20 to 25 stores in next two years. In China, we have only 34 stores right now. China is around 30% of our business. But we won’t push to open more – maybe relocate some old ones. We are lucky in that we don’t have that many. A decade ago the mood was open, open, open in China. Now I think many brands feel they exaggerated.
FNW: What sort of year are you expecting?
RR: Macroeconomics means 2019 will not be a very good year. Italy is difficult, France is difficult. US is so so. China is not going down but will grow less. But we broke a billion euros in 2017!
FNW: What’s the ownership structure of Moncler?
RR: Personally, we own 27%. Then Eurazeo, our holding, owns another 5% - and then about 70% is floated.
FNW: Everyone in Italy seems worried about a French invasion of their luxury brands. They already own Fendi, Gucci, Pucci, Loro Piana, Bottega Veneta, etc… Are you concerned?
RR: Not really. Yes, they buy our brands. But they have a totally different mentality, building two to three great groups that are very strong financially. Mr. Arnault and Mr. Pinault have built incredible groups and very successful. In Italy, we are more entrepreneurs. We really care about our own companies. Zegna doesn’t want to become a group. Prada tried and it didn’t work. Our culture is different, more family orientated.
FNW: Are you concerned about tension between France and Italy?
RR: Populism has become stronger and stronger. In France, they have, I believe, a good president with stable ideas on how to manage the country. But, I thought your (‘yellow vest’) populism was a matter of three or four weeks, but now I see it as more like the Five Star (Movement) in Italy. In three years Five Stars went from 0.5% to 30% of the vote. Their policies are to break the rules. These are people who never managed a company or the state or anything. They try to do their best. But they are not the best. They don’t care about the cradle of ideas. When I was young I felt strongly against communism. I had definite ideas. Today, kids just care what’s going on today. They don’t like immigration. They just react.
FNW: Why did you buy Attico?
RR: That’s my family business. I have a holding company and two sons and I don’t want them working in Moncler. I never worked in my family’s companies. It’s a better experience outside. We built a new group called Archive, which bought Attico and Langosteria.
FNW: Langosteria is Italy’s most exclusive and famous seafood chain in Italy. Three restaurants in Milan, and a fourth in Portofino. Which makes you the Richard Caring of Italy?
RR: Richard is incredible. He did a very good job. In food and beverage he is the number one in the world. At the highest level. At this level nobody competes.
FNW: What’s your next step for your own company?
RR: Our next step won’t be clothing or luxury, but hospitality. With a family investment. We don’t do fundraising. We don’t like debt. We don’t have any debt in Moncler.
FNW: What will be the next big step in luxury?
RR: Travel will be very important in the next 10 or 20 years. Everyone wants to travel. Possession will no longer be important. When I was 20 my dream was to buy a nice car; to get a mortgage on a nice flat. Kids don’t want that today. They want to travel, to have experiences, to eat outside. To eat differently. In Milan, everyone goes out to dinner every night. Ten years ago, it was once a month.
FNW: So you admire LVMH buying Belmond?
RR: Yes, a great chain with incredible locations. Based on that you can build the biggest and best chain of resort hotels in world. Okay, they paid a lot, but they have the best. They have the best! If you don’t pay a lot, you can have a bigger chain, but really medium. Who else has such beauties in Portofino, Amalfi, Capri and Syracuse in Italy?
FNW: Where do you go on vacation, and where do you like to dine?
RR: Last time we did a tour from China to Dubai, across Bhutan, India and Vietnam – many stops very interesting. Resorts, cities, historic sites.
Where do I like to eat? It has to be Lo Scoglio, near Positano. And, I don’t like Michelin stars, I prefer a trattoria. Yet, I also love Daniel Ulm in NYC, at 11 Madison Park. Incredible experience. And, of course, Langosteria!
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