"Moncler, Hong Kong Protests and COVID-19... Impact Inevitable"

[Asia Economy Reporter Eunmo Koo] Moncler is facing increasing concerns as the spread of the novel coronavirus (COVID-19) adds to the impact of the Hong Kong protests. Given its heavy reliance on mainland China and tourist consumption, the damage caused by the epidemic's spread is expected to be inevitable.

According to Shinhan Financial Investment on the 23rd, Moncler's sales in the second half of last year increased by 14.1% year-on-year to 1.06 billion euros, and operating profit grew by 18.5% to 400 million euros. While steady growth was recorded across all regions, sales in Asia slowed due to the aftermath of the Hong Kong protests.

By region, sales in Asia increased by 14.8% to 470 million euros, Europe, Middle East, and Africa (EMEA) grew by 13.0% to 300 million euros, the Americas rose by 15.9% to 180 million euros, and Italy increased by 11.5% to 120 million euros. Hyunji Lee, a researcher at Shinhan Financial Investment, explained, “Asian sales continued to show a sluggish trend in the fourth quarter due to the lingering effects of the Hong Kong protests, while European sales expanded more in the fourth quarter than in the third, offsetting the slowdown in Asian sales.” Sales by channel were 820 million euros in retail, up 15.5%, and 240 million euros in wholesale, up 9.5%.

This year, sales are expected to be negatively impacted by COVID-19. The researcher said, “Moncler is conducting the ‘Moncler Genius Project,’ which introduces collaborative products with famous designers each season,” adding, “This year as well, it is expected to support the brand’s growth by presenting consumers with a variety of design products.”

However, the negative impact due to the COVID-19 outbreak is inevitable. The researcher reported, “In addition to some store closures, a sharp decline in customer traffic and logistics disruptions have directly affected e-commerce sales in China.” However, she added, “It is positive that the epidemic’s spread occurred at a different time than the second half of the year, when performance is concentrated.” Shinhan Financial Investment estimates Moncler’s sales this year to increase by 10.1% from last year to 1.79 billion euros.