Moncler S.p.A. (MONC) Earnings Call Transcript & Summary

Good evening. This is the Chorus Call conference operator. Welcome, and thank you for joining the Moncler Full Year 2020 Financial Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Paola Durante. Please go ahead, madam.

Thank you, and good evening, everybody. Thank you for being here tonight with us to comment our full year 2020 financial results. First of all, as usual, let me introduce you to the executive team on today's call. Our Chairman and CEO, Mr. Remo Ruffini; Luciano Santel, Chief Corporate Supply Officer; Roberto Eggs, Chief Marketing and Operating Officer. Before starting the presentation, I need to remind you that this presentation may contain certain statements that are neither reported financial results nor other historical information. Any forward-looking statements are based on Moncler's current expectations and projections about future events. By the nature, forward-looking statements are subject to risks uncertainties and other factors that could cause results to differ even materially from those expressed in or implied by these statements. Many of which are beyond the ability of Moncler to control or to estimate. I also remind you that press has been invited to participate in this conference call in a listen-only mode. Let me now hand over to our Chairman and CEO, Mr. Remo Ruffini. Remo?

Good evening. Good evening, everyone, and thank you for attending the Moncler conference call tonight on our full year results. This is a moment that I like because it is when we review altogether, what we have done, what we have achieved and what we are going to do. And tonight, I look at it more closely. 2020 has been challenging. But at Moncler, we have worked together to turn this challenge into an opportunities. Since the COVID-19 outbreak, our first priority has been to protect our people and in doing this, we have also worked to reinforce our brand, our community and its sense of belonging. We immediately focused on the most important project. While postponing all those not essential, accordingly, our commitment to sustainability and to digital has remained unchanged, 2 main pillars of our strategy. We've also been forced to evolve our marketing strategy. Our CRM approach. We have been able to reach exceptional results, like the 7 million viewers -- 7 billion viewers, sorry, of the Moncler Bubble Up challenge on Tiktok. And more than 60,000 private appointment organized during 2020, while online achieved 15% of our sales. We will open our flagship stores, our new flagship stores in Paris in Champs-Élysées. A store that embodies the essence of our brand strategy. And in December, Stone Island joined Moncler, marking a milestone moment in our group's history. With Stone Island, the Moncler group reinforced its presence in the growing new luxury segment, which is about community, experience and contamination. It is beyond luxury. And very important, a comment on our 2020 financial results. Of course, they are far from what we were planning even only 1 year ago. Nevertheless, I believe, today, we are reporting extraordinary achievements. 11% revenues declined in the year with the fourth quarter up 8%, 26% EBIT margin. Last but not least, of almost EUR 200 million of net cash generation. This result tell us that Moncler is strong and that our business model is flexible, agile, and most important reactive. Looking ahead, I still see a lot of challenges for the global economy and for the sector. The 2021 outlook remains uncertain and difficult to predict. We are still experiencing important lockdown. Travelers continue to remain low, and the development of the vaccine campaign is still uncertain. This is the time to act even bolder to stand firm on our strategy and to invest on what is crucial for the long-term development of our company. We started to work very well with the people of Stone Island. In 2021, we still established the basics. The development guideline are clear, clean and well defined. For what concerns Moncler, we'll complete the internalization of our recovers. Finally, launching our new website. China will become even more of a focus as well as clienteling, with a strong attention on locals and new locals. Genius 2021 will evolve becoming a media hub, and the building will be its broadcasting studio. We'll explore every platform on which you could experience it. In 2021, Moncler Genius will come to you. All this cannot be reached without a superior product. We'll persist investing in research, technology, sustainable material and processes. Our commitment to you remain unchanged. We will continue to push for higher peaks. Thank you very much. And now let me now hand over to Roberto and Luciano. Thank you.

Thank you, Remo. Good evening. I'm very happy to have the possibility to comment 2020 full year results. Let's start by the highlights. As you have all noticed, despite a significant decline in traffic due to measures to contain the COVID pandemic. The second semester 2020 has shown very solid recovery for Moncler, confirming Moncler brand strength and efficient business model. Revenues declined by 11% at constant exchange rates, while Q4 revenues boosted by China and online increased by 8%. Retail revenues declined 12% during the full year, but with a strong recovery in Q4 with a plus 5% at constant exchange rate. Full year comp performance was at minus 18% but with a minus 9% in the second half of the year. Wholesale revenues declined by 5% at EUR 351 million. Retailers and very strong reorders boosted performance in Q4. We performed at plus 31% during the last quarter of the year. EBIT for the full year was at EUR 369 million, with a margin on sales at 25.6%. Remarkable results on H2 EBIT margin that reached 39% versus 36.8% in the second semester 2019, thanks to a strict control on expenses and flexible supply chain. Net income reached EUR 300 million with a margin on sales at 20.9% versus 22% in full year 2019. We benefited from 13% tax rate in 2020 due to trademark fiscal recognition pursuant to the August decree. Concerning net financial position, we reached EUR 855 million net of net cash versus EUR 662 million at the end of 2019 this includes lease liabilities for EUR 250 million of net cash versus EUR 23 million at the end of 2019. Let's move to the revenue breakdown by region. Moncler recorded a very strong recovery in the last quarter of the year with acceleration in all regions. Q4 2020, revenue rose by 8%, bringing full year total revenues at EUR 1.4 billion. Asia rose by 26% in Q4 with full year at plus 2%, driven by an outstanding acceleration of Mainland China at more than 60% during the last quarter of the year. Followed by a solid double-digit growth in Korea and in Japan. EMEA suffered from 35% of the store closed during the last quarter of the year. But despite that, the revenue only decreased by 13%, influenced, as I was mentioning by the lockdowns in November, especially in November and December. Northern Europe, so Scandinavia, Russia, Benelux and Germany outperformed the rest of the region with a positive growth during the fourth quarter of the year. Performance in Italy remained difficult. Probably the country most affected by lockdowns in Q4 and the lack of tourism. The Americas recorded a positive 5% growth in Q4, driven by robust performance both in U.S. and Canada and both in wholesale and retail. Let's look at the revenue breakdown by distribution channels. In Q4, Moncler performance accelerated in both channels, driven by China and the online. Retail revenues turned positive in Q4 with a plus 5%, notwithstanding the decrease in traffic in Norwegian. Comp store sales was at minus 9% during the second half of the year, while we had a minus 30% in H1. E-commerce recorded a very strong double-digit growth, close to the growth that we had in China. Wholesale revenue decreased by 5% in full year, with a double-digit positive performance in Q4 at plus 31%. This was supported by higher in season reorders for the full winter and a different timing in fall/winter deliveries. If you remember, the results of Q3 were at minus 6% and the last quarter of the year, plus 31%. But if we look at the total result of H2, it was still positive at plus 4.5%. E-tailers significantly outperformed the rest of the channel. Let's move to the brand, mono-brand store network evolution. As mentioned by Remo, December was marked by 2 very important openings. The first 1 was the store on Champs-Élysées. We'll come back to that in a few charts. And the -- which is the largest flagship store that we have in the network. And the second one is the opening of our first retail store in Spain in Barcelona, both performed extremely well during the months of December. We have already secured 15 DOS openings for 2021. Mono-brand wholesales accounted 63 locations at the end of 2020, 1 unit less than in 2019, but this includes 5 conversion of all corners in North America that were converted from wholesale into retail. Let me highlight some of the key challenges and trends that we have been noticing during the course of 2020. I must say that these trends were already there, but the COVID pandemic has just accelerated this very important sector trends. The first one is the digital science. The second point is the China relevance. The third one is the client knowledge and relation centricity. The fourth one is the casualization and the fee trend that we have seen is the sustainability. We have the Moncler way to address those important challenges and change that we are noticing in the market. The first one, and it was mentioned by Remo during his speech is evolution is very strong evolution in what we call new luxury, luxury that is going beyond the traditional boundaries and coats. A new luxury that is focusing on community experience and contamination. The second is our very strong engagement with locals and new locals, what we call new locals are the travelers that are back that don't have the possibility to travel anymore that we have been reactivated with strong private appointments during the year and distances. The third is the e-commerce acceleration. We have been lucky to start with retail excellence already 6 years ago. These have been the founding pillars of our retail strategy on which we have been having the omnichannel since 2018, and this has really been performing during the year 2020. We are also approaching the market with a new communication strategy regarding Genius. And we have been now embedding and integrating sustainability across the full organization and the full value chain. What are the key projects for Moncler for 2021? We have we're highlighting the most important ones, and we like to focus on 6 of them. The first one, as mentioned already by Remo, is the China focus. We have had a very intense work that has been done during the year to activate new local. So these travelers, these Chinese that were traveling abroad and buying abroad, and we have been able to reactivate almost 40% of them during the year. Thanks to clienteling action. And I'm given figures that are broader than just China because this has also been a focus that we have had in Korea, in Japan and in Europe and Americas. We have conducted more than 60,000 private appointments during the year and more than 25,000 distance sales. This has been able to generate for us, close to EUR 100 million turnover that we see as additional turnover, the store being closed. We are going to focus also on digital communication for China with a dedicated website that will be launched in September this year, and we will continue our program with WeChat mini program. We have also -- and this is something that we started before the start of the pandemic, strong project on retail regarding flagships. We have in 2021, the opening of an [indiscernible] we will refurbish Beijing Sanlitun as a flagship store, and we have signed for Plaza 66, the largest store that will have in China with the opening too that is planned for early 2022. And finally, the ground up pop ups. We see the Olympics in Beijing 2022 as a fantastic opportunity to leverage on the DNA of Moncler, and we are currently planning for a large number of grown up pop-ups that will start in December this year and at the beginning of 2022 in the main mall and location in China. Second point of attention and project for us, the e-commerce acceleration. As we mentioned, the performance in 2020 has been extremely good, but we have -- we're even more ambitious than that. So we will continue with the e-commerce in-sourcing, we have been successfully launching in North America in September 2020, and we are currently working for the in-sourcing of EMEA that will be followed by Japan and then China. The new website will be launched by June, as we already mentioned, is a website that is in part by a concept of fluidity and coming more from the entertainment industry. So we think that this will be a breakthrough in our approach to consumers. And we are going to focus on KPI's improvement, especially on returns by developing, and we are currently working on that, specific sizing elements in the -- on the website to facilitate and improve these very important KPIs. Third element is the new communication approach. We are going to transform Moncler Genius into a media hub. We have already started and opened our studio here. We are working and shooting for the new website. And will be moving from still life shootings to have more model dressed, and we are going also to introduce gradually more videos. We will continue with this digital approach that has been very successful. And the event that was usually taking place in Milano will be an international event that will touch 4 cities with the main one being located in China. We will -- we are planning for this event, very important even in September 2021. The last point is the focus on sustainability, on which we have been working a lot that will try that will start communicating much more in the future. Both projects is to reinforce the omnichannel. I already disclosed the figures of the very important activities that we have had in 2020. As we don't foresee travelers coming back to normal before 2023, but we think that the tourism will come one day back. We foresee a start of return by Q4 of this year. We'll continue to reinforce our distance sales and private appointment strategy. Wholesale utilization will continue. We have signed at the end of 2020 selective distribution agreements with our wholesale distribution. We have further decreased by 100 units the number of accounts that we have in wholesale. And we have started negotiation with the E-tailers to move them into e-concession. Point #5, product. Product, we see 3 big trends on which we believe we are well placed. The first one is casualization. The second one is personalization. The first one is sustainability. Concerning sustainability, we have launched in November this year, our collection, Born to Protect fully sustainable, and we will continue by introducing also in the Genius collection, a very strong part of sustainable elements. We are going to continue leveraging on the casualization trend, which is part of the DNA of Moncler. And we will launch a personalization project in September 2021 in our store in Champs-Élysées that will be followed then by an online presence in 2022. We'll continue also to work on the recycle of our garments. But as you know, we have very little leftovers as our strategy, our commercial strategy is based on scarcity. Finally, point #6 is Stone Island. Stone Island, is a fantastic opportunity to leverage on what has been made in Moncler, but turned it into a Stone Island way. We want to strengthen the position in the new luxury segment. We are currently already working with the integration of corporate function and will transform the business model in a more direct-to-consumer approach. To finish to picture or to show you the 2 last opening of the year. The first one is Champs-Élysées, the largest store that we have in our network. It's a 1,600 square meter store, gross square meter, net selling surface is 1,160. This store embodies the values of Moncler and the DNA of Moncler, with the digital and immersive rooms on the ground floor, what we call refuge, which are VIP modular elements that are -- that we can turn either privatize or use it at as a normal shop floor. And with the personalization that will be launched, the room is already ready in September 2021. Last, the opening of the Spanish market for us, finally, Barcelona that opened at the end of November, very successful start. I remind you that we had another country opening. We opened in Kyiv, Ukraine at the beginning of 2020. I leave the word to Luciano to comment the financial figures.

Okay. Thank you, Roberto, and good afternoon, everybody. Thank you for attending our call today. So we are now at Page 11. Where we report as usual the P&L of the year and the comparison with the year before. The profitability, we show in this slide is good, honestly, I would say, very good. If we think of the results and the mood at the end of the first half of the year when for the first time in our life, we reported a negative operating margin for EUR 35 million. So now we report EBIT of EUR 368.8 million with a generation of operating margin of over EUR 400 million, thanks to a very strong top line and acceleration of sales, as Roberto said, in the second half of the year, starting from September, higher sales accelerated better sell-through and lower inventory and no need of any write-down inventory now after the extraordinary EUR 30 million write-down we reported, as you remember in the first half of the year. So gross margin is -- was 75.6%. As compared to the 77.7% of last year, but totally due to the EUR 30 million, again, additional write-down on the first half of the year, if and when you have time, please take a look at the slide, we report in the appendix at Page 21, where we report the breakdown of our income statement between the first half and second half. The profitability of the second half as Roberto anticipated in the first slide was very good and totally, totally in line with the profitability we reported in the same period of last year, even a little bit better because -- but because we decreased, as you know, we made the strategic decision at the beginning of this year, we decreased our marketing budget because of the situation, stopping some very important, but not urgent marketing events and slowing down our media buying activity. So again, gross margin was very good in the second half and that at the end of the year at 75.6%. No particular comments on the other lines, less you will have questions later, I will be more than happy to answer your question. One important comment I have to make is about net income and the benefit coming from the tax rate that was unusually very low, 15%. Last year was already very low because of the last impact of the patent box. And as we said at the beginning of this call, we took advantage of a tax law that came out in August in Italy that allows the company to align the tax value of their assets to their book value, if they are different, and this was the case, for Moncler for the trademark. So based on accounting principles, we reported in the taxes and the benefit of EUR 55 million, which is an economic benefit that will produce cash benefits over the next 18 years. But again, the economic impact is totally reported in the P&L this year. We can move now to Page 12, to report CapEx. You may remember that last year before the outbreak, our plan was to spend in CapEx about EUR 130 million, then we decided and we communicated to the market that we had a cut of 30% that budget. At the end, we ended up with the EUR 90 million, which is exactly what we expected to do. EUR 90 million for in part allocated to distribution to the retail expansion and the EUR 35 million growing component in our, what we call infrastructure, which is mostly information technology, logistics and this year more than ever, but not only this year, also last year, the important project of insourcing our e-commerce. Let's move to Page 13 now. Net working capital, 11.5%, not so well as it was last year. But of course, we are talking about a year on which the inventory was for the reasons, we know very well, was much higher than last year, even if the amount of report here is greater than EUR 30 million write down still the good product, we didn't rate down, but we decided to carry over to 2021 was still bought last year. So we have a high inventory apparently higher receivables, apparently, I mean, the number is much higher than last year, but there are 2 components in this number. One is the wholesale business component, which is totally in line on a percentage basis with last year, total and full control of our wholesale credit. The other component is a positive favorable component due to the concession business we do in department stores mostly in China. Where we collect the money the month after. So this is the result of the very, very strong concession business we developed in December, mostly in China. But the money was collected in January. So overall, honestly, not well as much as last year, but I will say, still very healthy working capital. Next page, please. Net financial position. At the end, we reported EUR 855 million cash, which is almost EUR 200 million cash generation during the year, which is, I would say, a remarkable result. Again, most of the result has been developed in the second half of the year. Next page, please. Balance sheet, nothing to say, honestly, unless, again, you have questions later. And last slide, the cash flow statement where we report all the business components we discussed about during the call important to highlight the net working capital that was higher. The impact that was higher than last year for the reasons I told you. The change in other liabilities, which is unusually very high, but it includes the EUR 55 million tax benefit that will produce cash benefit over the next 18 years. And so this year, we reported the economic benefit. But still a tax credit. So to the end, EUR 855 million with the EUR 193 million change in net financial position. After the results an update, a very quick update about the Stone Island transaction. We have completed the confirmative due diligence with no exceptions at all. We are expecting soon, hopefully, the antitrust approval. And I mean, we are very confident, and we expect to have -- to hold the AGM at the end of March and the closing right after the AGM or by the end of March in order to be able to start integrating and consolidating Stone Island business from April 1. So from the beginning of second quarter. Next slide, very, very important slide that would require a lot of time to discuss about, but just a few comments, but happy to answer your questions. We presented in October and November, actually, our sustainability plan which is a call, which we call Moncler Born to Protect. That is based on 5 main pillars. So one is the climate change and our commitment to reduce year after year, the carbon emissions, not only the carbon emissions, we are responsible for in our sites, but also in all the value chain of our business model. Second pillar, circular, which is about usage, more and more of sustainable raw materials starting from nylon with a commitment to use by 2025, 50% of sustainable nylon. And then to recycle as much as we can to a project that has already started that is doing very well. Also the finished goods after their normal life in the stores in the outlet. Third pillar is the fairness, which is the base of any relation we have with anyone, but specifically also with our supply chain suppliers. With which we pretend, we require them to be fair as much as we want them to be with their people. And to develop a stronger partnership with them. For pillar and is about diversity and inclusion, which is something embedded in our strategy, in our vision, in our values, we have an important value, which is called bring other voices in to bring other opinions, different opinions, other concepts. And this is the only way to grow and to build a stronger culture. And last but not least, what we call the give back, which is about supporting communities, donating money, but also and even more important, sometimes even more difficult time, our time and our employees' time. So I'm done with the presentation, and we are ready now to answer your questions. Thank you.

[Operator Instructions] The first question is from Louise Singlehurst from Goldman Sachs.

I wonder if I could take the opportunity to ask the first question for Mr. Ruffini, please. You kindly talked about the change in approach to customer engagement. I wondered if you could take this opportunity to summarize the key 1 or 2 points as you look back on 2020, the surprises to you, both in terms how the business has reacted internally, but also from a customer perspective and any particular surprises by nationality, cluster, demographic would be really helpful? And then secondly, with regards to online, obviously, with the internalization of all the e-commerce activities, which is underway. I wondered if you could provide us with any examples or anecdotes of how you think this is really enhancing the customer engagement. I don't know if there's any examples specifically for the U.S. that you might be able to share with us, which may also give us a bit of a feel of what's to come from the other regions going forward. And then finally, my last question, just in terms of the e-concession model, which you highlight again with online, and the direct relationship with Farfetch. Is there any particular region that you think the e-concession model can really help expand Moncler's engagement above all the others. And I wondered if you could talk about the margin dynamics of the e-concession model as well?

Yes. As you know, the world was changed. Since March was really quite sad, we were not able really to react this lockdown, especially in Italy, was quite tough. The mood of the people around. Having said that, we say we have to do something to change the approach. We have to be really keen to give a lot of energy to our people, to our customer, to our everybody. Having said that, we realized soon that the market was changed. The people are not traveling anymore. Then the commerce was very important. The relation with retailers was super important because at that moment, we thought it was the only chance to have relation with our customers. Then after that, we start to have a different approach in terms of clienteling, in terms of relation, again, with from the store to the client. And then we realized after a few weeks that the market was changed. Basically, Europe was actually locked down. There is no any more tourists. There is no any more energy. We realize that all the Far East, all the Asia was very interesting, very strong, especially China as well, Korea and Japan at that moment. But a big surprise at that moment was United States was quite successful on all the period and until basically end of October before the election, I think America was quite surprised for myself. Having said that, the way to work was basically totally, totally different because we start really talk with the customer through different tools. We start to have -- our communication was, again, totally different. We have a relation with the customer with what we call voices with the new project, we start talking with the people in the company. With the new project through Instagram to our in-house network, the world was changed. I think the relation is still very strong. I think the numbers reflect what we did in the last years, basically the last in 9, 10 months. But we're really confident that we have in front of us another year that could be more or less like 2020. But I feel now we have better ideas and better feeling to react of this situation. I think Roberto can go into the details.

Regarding the question you raised, the first one on our approach on clients during the pandemic. I think that all the work that has been done over the past 5 years to develop well-defined and rich database the fact that we have provided tools to our sales force, more than 1,500 people and that we have been empowering them to do clienteling action has been really key. I think we had prior to the pandemic already all the, let's say, the substance, the basis to leverage. And clearly, there was a demand from consumer and not having the possibility to come into the store to stay in contact with the brand, and it has been communication that has been going both in us calling us and us calling them. So this 60,000 action that I was describing, the fact that we start introducing already from March distance sales with videos showing the collection, leveraging on what we call our preferred client has been a key factor of success of the sales that we have had and the acceleration we have seen at the end of the year. The database, the enriched database with more than 3 million clients that we have now has been an asset, incredible asset in the performance that we have had at the end of the year, and we think we can go even beyond that because we don't have for the time being, an omnichannel that is including also the, let's say, the connection with all the stores and so on, and this is something that is going to be in place when we will launch the new website and we finalize the internalization with WinApp. So this one pool inventory is something that we are going to start leveraging from June this year and will be probably another step in the possibility to give a better service to the consumers. Regarding the demand on different nationalities, the start of the year with the closure in February and March of a lot of store of China has decreased the weight of Chinese during the first half of the year, but there's been an incredible rebound and very successful actions that we have been able to take on the Chinese market during the second half of the year and especially last quarter of the year. And at the end, the weight that we have on our Chinese consumer is absolutely in line with what we had in 2019, even slightly, we gained 1.1 percentage points on the weight of Chinese. So the reactivity of China and our Chinese organization has been extremely good and extremely efficient. Our current market performed very well throughout the year despite the fact that 1/3 of the business in Korea is usually done with travelers. We had no travelers in Korea during the year, but we have been able to grow positively quarter after quarter even in reaching a double-digit growth in the last quarter of the year. So an extremely good performance. And here also the weight of the Korean has increased by 1 percentage point. The performance of the Japanese has been in line with the global performance. Americans have also performed very well with a positive growth at the end of the year, which is plus 5%, I must say that the performance was even stronger during the month of October. We had a very strong double-digit growth in October. And then with the election there was a little bit more bump towards the end of the year and with a strong recovery at the end of December. So these are for the main nationalities. Then globally our business has become more of a local business during the year. Usually, we have -- if I'm talking international travelers, that represents 35% of the total. And then we had another 15% for local travelers. So for example, the Germans that are traveling to France or the Italians to -- that are traveling to Switzerland. These are called local travelers. The local travelers is 15%. So the local travelers, we have had some traffic this year, but the international travelers, they decreased by more than 70% this year. And if we look at the last quarter of the year, that decreased by 90%. So I think all the actions that we have been able to take during the year on the local client that we have, the activation is what has been paying off during this year. And I see the return of let's say, international travelers as something that is going to come on top of the current growth. I think this refocusing on local clients is something that we have been pushing since 5, 6 years. And this has been a year that has been really seen some concrete sign of success. Regarding the concession, I think it's difficult for the time being to give you some elements on the commercial negotiation because they are not finalized. We don't see that's something that is going to be dilutive for us. We see that as an opportunity to get better control of the image of Moncler and the brand. We consider this as a very important channel, one of the most important channels, and we want to be working together as a partner with E-tailers on this. I think that the potential on this channel is strong. We think that we can double the business with E-tailers within the next 3 years. And so we will start. We are currently negotiating with them, and I think we can probably disclose some positive comments during the first half of this year, but it's still a little bit early to say more than that.

The next question is from Susy Tibaldi with UBS.

Hello, can you hear me now? Okay. Perfect. That's strange. So clearly, you had a very strong end of the year. And I wanted to check if this kind of positive trends and have also continued in the first part of the new year. Obviously, it's still very early days and still a lot of disruptions. So any comments there would be quite helpful, maybe some trends that you've been seeing in Chinese New Year. But also, I was wondering, if I'm not wrong, Q1 January is the most important month, could you remind us how much in terms of weight it represents in Q1 in a normal year? Then a question on the retail KPIs. Obviously, it is a little bit unfair to compare to previous years because we had a lot of store closures. But I was thinking, especially in Q4, if we just look at the stores that have been open, how would you say the KPIs compared in terms of store productivity. So the number of units per transaction, the selling price, I can imagine that the conversions have gone up, but perhaps you had some restrictions in terms of how many customers were allowed in the store at one time. So just -- it will be very interesting to see how the KPIs compared. And then just to follow-up on the question on the E-tailers. So it sounds like it's -- you see it as a very important channel. And I was just wondering, given that now you're internalizing your own e-commerce, how do you think about the balance between your own e-commerce and these e-concessions. Again, wouldn't it be beneficial to -- maybe also to your margins to convert some of those e-concession sales to your own e-commerce? Or how do you think about these 2 different channels?

Susy. I don't know if I will be able to answer to all your questions because you have some quite detailed question. Let's start with the -- with the current trend that we have been experiencing. I cannot disclose the weight of January, but as you can imagine, January is more important than March. In our sales, we started well. With a trend that is in line with the performance that we have seen at the end of the year. Difficult to give a real true picture on the Chinese New Year. As you know, Chinese New Year is usually, we look at it in 3 different steps, the 7, 10 days before the Chinese New Year, the week of the Chinese New Year and then the follow week after the Chinese New Year. As you know, the business of comparison is a little bit tricky because last year, Chinese New Year was on the 25th of January. And most of the Chinese, a lot of Chinese were still traveling abroad. So buying abroad to bring back the gift at home. This year, it was on the 12th of February. There have been some restriction in China, and the government has pushed, as recommended to Chinese, not to travel to their home town or village so there was less opportunity to go buying. At the same time, last year, December -- last year in February, a lot of stores were closed. So clearly, when you see the current performance that we're having. It's a very strong triple-digit growth that we have in China, but you need to -- more to compare the results towards 2019 then towards the figures of February 2020. Overall, we are satisfied. I think even slightly better than we were expecting at the start of the year. But I think that March will be probably and April, May, June, out of good months because there, we will have a base of comparison that is an easier one. This, unless there will be new lockdowns in Europe. So I would say a good start of the year, in line with the performance that we have seen in Q3 -- in Q4, sorry. Regarding the retail KPIs, I will try to give you a flavor of it. But here again, difficult to comment. And usually, we don't comment on comp sales per quarter. But you can imagine that with this very strong performance, our performance on comp sales despite of having 20% of the network closed in December and 10% in November during the last quarter was flattish. So it was a very good performance that we have overall. The net selling surface during the year increased by 10%, and the average store size is getting closer to the ideal, which is we aim to be slightly above 200 square meters, this year we increased by 5%. Sales density has suffered but if we rework this data by the number of months of closure, we have not been that far from the very good result of 2019. What has been really suffering. And I think this is for all the retail industry with the lockdowns and the measure taken by the different government is the traffic. So traffic has been the KPI that has been mostly impacted, but a big part of this slowdown in traffic has been recovered by a very high conversion rate. So didn't fully compensate. So at the end, we got some less transaction, but the conversion has been very high. So which means that the clients that were entering the store were more willing to buy. And I hope that also our client adviser have been able also to take advantage of less traffic to do a more qualitative work. Globally, our sales per transaction increased by 8%. Our unit transaction increased by 1% and the average transaction value increased by 8%. So I think that the retail KPIs, with the exception of traffic that has been the KPIs that have been really impacting the business. Overall, they have been good to very good. Sorry, you had the last question on E-tailers, yes. Quickly on that. I think the way we see the E-tailers business and even if we convert it to concession, I think it's the same like when somebody wants to enter in the mono-brand store, you prefer to buy in a multi-brand store. So I think both are important. We don't see one as a competitor to other, but it's more something -- it's a different type of consumer that you're attracting through retailers. So I think the question here is more how to deliver a better image, better service developing also a specific capsule and so on to be an attractive brand also with the E-tailers or e-concession. I think it's like saying I don't want to be wholesale. I want to be full retail. I think there is complementary. There are different typology of clients. Some feel more confident to buy in a multi-brand environment, some others they want to have the full experience with the mono-brand store. And what we would like is to improve on both internalization of the e-commerce for the business we are managing ourselves. And moving to e-concession and developing even more as a partner with E-tailers.

The next question is from Luca Solca with Bernstein.

You mentioned that you have worked very effectively with Stone Island and that you are now in front of a clear and precise set of actions that you want to take on this business. I wonder if you could elaborate on that a bit. And if you could, in particular, give us how confident you are about the ability with Stone Island of sustaining a direct retail strategy that could potentially shift your distribution over time from wholesale to mono-brand stores and to direct-to-consumer digital distribution? The second question is on customer data. It seems that you have done an incredible amount of work, contacting consumers directly and offsetting this way, the lack of traffic and the lockdowns and so on. I wonder about your strategy moving forward, building up this capability and the actions that you have in the pipeline. And how this compares to what you're doing when it comes to digital distribution, how much of the client data can you capture through digital concessions, for example, is that putting you in a position to have a direct dialogue with consumers or not? And then if you could give us a bit more color on what has been going on with European consumers and a bit more granularity on the different nationalities and the trends you've been facing in Europe?

Okay. I -- as you know, we received a lot of order to buy some company in the near future in the last 2, 3 years, but we always refuse because we never found the right company, the right position and the right idea of what we have in mind to develop this world for the near future. Having said that, when we start talking with Stone Island, we soon realized that it was very, very similar to our mentality to our culture. It was very similar, was Moncler like more or less 10 years ago, the company is very wholesale. They just start the retail. The real experience is in wholesale, for sure. I think the culture they have in the company is very strong in terms of product, in terms of production. As you know, they are quite unique in this kind of world of garment dye that is very trendy at the moment, it's really trendy since 30, 40 years because actually, when they...

Sorry, there is a back background noise. I don't know, if possible.

When they found the company like 40 years ago or 35 years ago, Navarino was found by Massimo Osti. The company was soon very, very successful. And we really felt that this company was really a good company for us to -- for our mentality, for our way to work. And again, the culture in terms of vision, in terms of rigor, in terms of distribution, it was very close to Moncler like 10 years ago. Having said that, talking about retail, basically, they've not starting yet, for sure, as I said before, the culture is very in wholesale, but we're really confident that we can help them to develop the retail business, but not only. They are quite strong in digital as well. I think to really match the 2 culture between us and them. I think we're going to really -- we're really confident we really trust that we can build up a company, very solid, very strong with a very strong brand perception. I give the floor to Roberto, just to add more details on that?

Good evening. So Luca, regarding customer data, we have been working very strongly these past years. And develop a full set of services that we wanted to offer. So our team was already trying to get and to be proactive and to contact the client with goals, e-mails. What we have been having this year is something we are not used to do is videos, live stream videos with groups and so on, working also with small influencer or local influencer to transform and stylist also to transform these sales, these remote sales are something more exciting. So this is definitely something that we have been having this year. Where I think we can still improve because it's really a learning curve and something we're not everybody feels confident to do, but let's say, the return on investment because part of the marketing budget has been really allocated this year to this very effective tool has been bringing a lot of positive results. We believe that this next level of service will be also -- we will be able to provide it through internalization of the e-commerce, not only the fact of benefiting from the one pool inventory, but also the fact of being able to merge live the data from the website with the database that we have currently is done in a remote way when we are receiving on a monthly basis data from -- but this will be done live. So I think this is opening a full set of new services and more informed information. This one famous one vision of the client with all the touch points, this will be something that we will be able to leverage from mid of this year. So we are really looking forward to that. Regarding your question on European consumers, overall for the year 2020, they have been growing positively despite the fact that we have had really a few months of lockdowns in Europe and all nationalities have been growing positively. The best-performing subregion in Europe has been Scandinavia. Probably or so because they are already more keen to buy online. So it has been also something that has been easier to leverage the same for the Germans. The Swiss also have been performing well. And also the Benelux or the Dutch and the Belgium has been also performing extremely well. But as was mentioning, all the nationalities that have been growing positively for us, some double digit, the one I mentioned, some others more flattish or slightly positive, but you can imagine that when we have 4 months or 5 months of lockdowns is impacting more of your business. Overall, what we have seen is a business that has been become more local towards the end of the year. The last quarter of the year, we were 90% local, which is something unseen before. We're more at 40% of tourists towards the end of the year. It has become this year because of the lockdowns, the pandemic and no travelers, a business that has been much more local. And all the actions that we have been putting in place have been an accelerator of the growth of our local business.

Roberto. Can you tell us a word about how you can capture consumer data through digital concessions, if possible? Or.

To tell you the truth, Luca, it's a topic that is on the table is a little bit like when we started to negotiate and move our business from wholesale to retail in concession. It's always a hot topic where everybody believes that it is own client. I think that when you find clever people on the table, usually, it becomes a shared data, and that is something that you can leverage together to be even more effective, but it's something that is not sold yet.

The next question is from Anne-Laure Bismuth with HSBC.