Perfect Moment Ltd. (PMNT) Earnings Call Transcript & Summary

Good day, and welcome to the iAccess Alpha Virtual Best Ideas Fall Investment Conference 2025. The next presenting company is, Perfect Moment Limited. [Operator Instructions] I'd now like to turn the floor over to today's host, Max Gottschalk, Chairman at Perfect Moment Limited. Sir, the floor is yours.

Thank you very much. Thank you, everyone, for joining this call today and for your time. My name is Max Gottschalk. I'm the Chairman, but also the largest investor and shareholder in Perfect Moment. Today's presentation, I will walk you through the company. And at the end, we'll open the floor for questions. So for those of you who don't know, Perfect Moment is a lifestyle -- luxury lifestyle brand, focusing in the winter outdoor and ski market. And we're here really to give inspire individuals to share their Perfect Moments. In terms of the company's history, it dates back to 1984. The company was founded by French film maker, Thierry Donard, who, for the past 40 or 50 years has been capturing athletes performing their Perfect Moment. So mainly free riders in the world of ski, surf, skateboarding and any other extreme sports in a very similar fashion that Warren Miller did over the last few decades. So think of the Warren Miller equivalent in Europe. Over his career, he's filmed athletes and created clothing so that it would pop on screen. And so that's sort of the heritage. So a French heritage brand from the 1980s, born in Chamonix. So we are -- from my background, I grew up in Switzerland. So I was born and raised there. It was a skier and a professional skier as a young athletes. And so I grew up with the brand and grew a very strong affinity to it. And then went to the states and pursued a career in finance and worked in Wall Street and had the opportunity and met the founder of Perfect Moment in 2007, 2008 and had an opportunity to invest and buy the company. So in 2012, together with my wife, I bought the company, and we prepared it for a relaunch in 2015. So it was at a time where brands like Moncler and Canada Goose were growing very rapidly, both brands coming from an Alpine heritage turned lifestyle. And so we felt there was an opportunity to do the same with Perfect Moment. So when we relaunched the brand in 2015, we took designs and aspirations from the '70s and '80s and reinterpret them in a modern way and relaunched the brand. And that was at a time where social media and platforms like Instagram were on the rise. And we very quickly became a popular brand in social media. And in fact, today, we are the #1 followed ski wear brand in social media with close to 0.5 million followers. But then we also have a huge outreach every single month up to 16.6 billion unique viewers per month during the winter months. So I'll touch on that a little later. But we have a brand that's globally recognized and well known. In 2016, we introduced summer collections. In 2019, introduced some outerwear collection. And then over the last 5 years, have really continued to grow the brand in terms of its brand presence through collaborations and ambassadorship. So Nick Jonas and Priyanka Chopra joined us as shareholders, investors and moment makers in 2021 and became brand ambassadors. And really sort of help, again, push our exposure towards consumers all around the world. In 2022, we did a partnership with HUGO BOSS, which was a 2-year collaboration where we designed ski collections for HUGO BOSS, which was a very successful partnership for 2 years as the new CEO came in and wanted to talk to a younger, more female-orientated customer. In 2023, we helped Soho House launch their U.S. Portland House. And so they choose us as their partner brand. Again, a very successful launch for Soho House. And in 2024, we took the company public. So that's sort of the history. Over the last year or so, we've announced additional collaborations, one with Johnnie Walker, Diageo, where we launched a limited edition Blue Label Ice Chalet product co-branded, where Diageo paid us a nice royalty fee, but then also spent over $10 million in marketing behind this, which continues to bring brand awareness. And we opened our first store and then more recently, also announced a partnership with the Alpine Formula 1 team. And we continue to be approached by multiple brands. So over the last few years, I think we've built a brand that's known globally that has a huge cult following among celebrities all around the world. And about 12 months ago, has stepped in on a more executive basis on the back of the IPO and started to invest in the organization and new people. So starting last summer, we brought on board a very senior sales professional from LVMH and in a very short period of time, delivered over 30% growth in our B2B order book. And then earlier this year, we took in a team from Canada Goose, which includes the former President of Canada Goose International, who've been there 5 years responsible for its international expansion, taking the business from about $70 million to $300 million. And then we also took on board the team from their production team, so including Head of Production, Head of QA, Head of Sourcing. And so in the last 6 months since the arrival, I have gone through a complete transformation of the organization which has meant a key focus on growth, margins and profit, which I'll touch on later. In terms of the products, this slide here will show you a little bit what we sell. So a lot of ski products, as you would imagine, a lot of knitwear was also very popular with our customers. We've got quite a female heavy customer base. Over 80% of our sales is to women. And about 70% or 80% of the revenues are in these products, mainly black pants, black sweaters and black jackets. So we've got a very core offering that year-on-year continues to grow in very, call it, plain colors. But what we're known for is for the more colorful and bold patterns that photographs fare well and everyone wants to be seen in. So you can see here some of the products. If you don't come across this product, I guarantee you next time you're on the slopes. If you do ski, you will start to recognize. So we've got a very strong brand identity, which I think is really important. In terms of our sort of footprint, we sell globally. So about 50% of our revenues is done through our own website, perfectmoment.com. The other half is done through wholesale accounts, about 170 accounts globally. 1/3 of our business is in the U.S., 1/3 in Europe, about 20% in the U.K. and 10% in the rest of the world. So we've got a global footprint when it comes to selling the products we sell in the Middle East, we sell all across Europe, every single country, we sell in Korea and Japan as well. And we, in fact, have very good opportunities coming out of China, which today we're not in at the moment. But we are a global brand with a global presence and recognition. And we do sell in what we will call our premium and luxury outlets primarily when it comes to our wholesale accounts. So in the U.S., it will be companies like Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman, Bloomingdale's. These will be some of our department stores we work with. In Europe, it will be Harrods and Selfridges. And in Asia Pacific in Crawford and others. So we have been very selective into which channel we sell into, primarily focusing on premium and luxury wholesale accounts and then also selling on online platforms. So we sell on Revolve and FARFETCH, on Net-a-Porter, MyTheresa and other [indiscernible] other sort of big online retail platforms. So very careful in growing our business initially very much focusing on the premium and luxury segment. And so today, we've got 170 accounts and growing. We just added 30% growth to our B2B order book to achieve record sales this year. And we're very excited with the changes we've made with respect to how we sell our products. We've signed 5 agencies. We've gotten our professional sales team and also professional showrooms. So the experience has been extremely elevated. But then also for the first time, we've been able to gather market feedback so that we can start to design collections that resonates with the market. So what feedback are we getting and what is the opportunity for Perfect Moment. So today, we're better known for a ski wear brand. Here on the left, you see a picture of somebody in our ski gear, but we've been slowly migrating into the lifestyle of the sport itself. So our customer is not your hardcore customer. She or he would be a more casual skier. We will go up in the morning, do a few runs, have lunch, do a few more runs and then end up at the bar at the end of the afternoon for the après-ski or the [indiscernible] restaurants and then into lifestyle. So the opportunity that we have is really to follow our customer off the slope back to where she lives in the city. And it's really the transition for what I would call ski in the ski apparels market into the more lifestyle area. So what does that sort of actually mean, right? So what we have here on Slide 10, we've got today about a 1.4% market share in the luxury ski apparel market, but we are the most followed skiwear brand on social media globally. So there's a disconnect there between brand and revenue. And brands that have us sort of following are typically anywhere between $100 million and $200 million of revenues. And so when you compare follower by revenue or revenue by followers, we trail our competition by about a factor of 10. So we believe we've got a real good opportunity to grow into the brand. And so since the new teams joined earlier this year, we've been very much focusing on executing on the plan to grow this business to a 5%, 10% market share. So $100 million, $200 million in sales should be achievable with a disciplined execution around the plan. That in its own right, should deliver anywhere between $20 million and $40 million in EBITDA and you do the math, that's a $300 million to $500 million market cap company if executed well. So that's the opportunity we have in ski. But the bigger opportunity for us is really to transition into the lifestyle piece. So we believe today, we have customers already that want more lifestyle and the feedback we're getting from all these B2B customers, Saks and others, so, look, we love your ski products, but please give us more outerwear. And so starting this year, we're introducing fall and spring collections, so broadening and shouldering what is quite a seasonal ski business into 9 months business. And we will be presenting to our wholesale accounts a pretty well-designed collection for next year. So we're quite excited about the opportunity to go after that market that has got 10x addressable market in terms of size. And that's what the team at Canada Goose is really helping us execute on. And so we're very excited about the prospect of being able to expand away from ski into an all-seasons brand. If we can do that, we've got $1 billion potential brand potential on our hands. When you compare that to the current market cap of around $15 million, 1-5. That's certainly meaningful upside potential for the brand. In terms of our following on social media, I just want to share here with you some stats and some images to give you a sense of the brand reach and who talks about it. So we've got -- we're just shy of about 0.5 million followers on our social media platforms, primarily Instagram. In the last year alone, we had 934 million audience and social media -- social audience, reached by content posted by key opinion leaders, KOLs and influencers. And we had 16.6 billion unique visitors per month globally. 16.6 billion unique visitors per month globally. What does that mean? And so I don't really know, meaning there seems to be a hell of a lot of people who have had exposure to the brand. And when compared to brands like Apple, when Apple launches its new iPhone like it just did, iPhone 16, I think, 17, I forgot now, that's the sort of exposure they get. So we've got a brand that, in our opinion, punches well above its weight, which is really sort of the opportunity that we have to convert that awareness into desire into customer. In terms of the press, who writes about us because, again, of the imagery that we have and the social following that we have, we've got celebrities wearing it. We've got -- we find ourselves on the cover of magazines. So travel magazine, fashion magazines, but then also financial. So we're talking fashion and financial press covering the story of Perfect Moment. And they like us because we are an exciting brand. We are a growing brand. And for many, we represent the revival of the sport post-COVID because we're really about the outdoors and the lifestyles associated with the sport. So that's quite exciting. Here's a few sort of imagery of where we've appeared. In terms of our influencer community, it's diverse, it's global, it's deep. And what's important is that none of these people here were paid $0.01 to post. Many brands, what they'll do is they'll get people and pay people to wear their products and post. All of our posting here was done organically. People just love the product. They want to be seen in it. They want to feel part of this community and lifestyle that we've sort of created with the name Perfect Moment and the brand. And so we've got this cult following happening, which is very exciting, which provides us with that great opportunity to capitalize on, and that's really what we've been focusing on over the last 12 months. So we've got people like Alessandra Ambrosio, we've got Justin Bieber, we've got [indiscernible], we've got Winnie Harlow, we've got Mariah Carey, Bradley Cooper, just to name a few of the people. I just love to wear our products improve themselves in it and provide us even more exposure and brand equity value. In terms of the team, and I think just to touch on it, for a firm our size to be able to attract that talent, I think it's quite unusual, right? I've been in private equity and venture capital for over 30 years now. And I think what we've been able to assemble here as a team is world-class. Obviously, you've got me and my wife, not to discount us, but we've got a fair amount of experience in the apparel world in the consumer world, but then also in venture capital and private equity. My wife, Jane, is a creative force behind the brand. She's the one who's had the vision since day 1 and has been working intimately with our design team and creating products that are highly desirable in the marketplace. Chath Weerasinghe, the former President of Canada Goose International; Vittorio Giacomelli, who is our Head of Products; Rosela Mitropoulos, who comes from LVMH's been trained. Rosey understands luxury and all of the sales channels associated with that. And then on the Board, we've also tried to bring people with relevant experience as an independent director to this company. We've got Berndt Hauptkorn, who is the current President of Chanel, the former CEO of Uniqlo and Bally, so understands fashion, understand luxury. Obviously, there's no more luxury brand than Chanel. So it has been a great value, great door opener and a valuable adviser to the company. We've got Tim Nixdorff, who is the former CMO, Chief Marketing Officer of Rag & Bone in the U.S. And then we've got Tracy Barwin, who is the former Head of e-com for Nike in Europe and then Uniqlo. So great Board with very strong fashion experience. And then we've got 2 bankers, Andre Keijsers, who's got a very strong background in governance and corporate structure and M&A. And then also, we've got Adam Epstein, who recently joined us, who runs a microcap fund. So really trying to sort of understand what's going on in that microcap space and help us sort of maneuver through the [indiscernible]. So a great Board with a lot of experience both in microcap fashion and luxury, which has been extremely valuable to us as a management team. In terms of growth strategies, where are sort of the opportunities and sort of what we're looking to do as a business. So we've got really 3 growth driver for the business. How do we grow top line? How do we take advantage of the growth opportunities we have across geographies and channels. And so it starts with product. For us, so we've got a product strategy and how we can expand from ski into lifestyle, and I'll show some examples. We also have a market strategy. We've got strong opportunities to continue to grow in the North American markets, opportunities in Italy, especially now with the Olympics. We've got a really exciting partnership we're about to announce. And then obviously, Asia Pacific, still a little bit of a white space for us, in particular, China. But China is the fastest -- in China, ski is the fastest-growing sport. And so we see huge potential for the brand there, considering that it's also 50% of the luxury market. And then we've got the channel strategy and how do we keep going deeper in our direct-to-consumer channels. As I mentioned, we've invested in our B2B wholesale or sales team, that's yielding strong results. And then also, obviously, retail. We've started with a few pop-up shops, trying to see how to optimize the retail model. But once we've got a season business or an established 9-month business between fall, winter and spring, we believe we're going to have an opportunity to do more in retail. And so we're starting to plant the seed for that. So to give you a sense here, what are we doing on products? So we're starting to introduce outerwear products, not only ski, but products you can wear apres ski, but then also back in the city when you walk down the street. So think of a Moncler jacket. Lifestyle and accessories. So again, more driven to fall and spring and then accessories to accessorize the ski collection and other products. So we're doing some interesting collaboration with ski brands and pole brands and eyewear brands. So all great accessories. And so that typically represents 10 or so percent of the revenue and should going forward. In terms of geographies for us, the U.S. is our biggest market and our fastest-growing market. So we are investing in North America. We'll bring more boots on the ground to help us capitalize on the opportunity. So quite excited there. We've got strong relationships with key retailers such as Saks and others. And so the question is really how do we grow from 1 door to 10 doors, how do we grow our business from $1 million to $5 million? And these are the conversations we're having now. And so we're quite excited with growing opportunities for us in North America. Optimize Europe is all about really localizing your sales channels and direct to consumers about translating our website and being able to service our customer in their own languages. It's about capitalizing on the momentum we have, for example, in Italy with our wholesale distributor. So great opportunities across Europe. And then as I discussed with you, China, in particular, we're very excited about. It's 100 million skiers, 1,000 ski resorts. When you look at brands like Arteryx, they are just killing it there. And so we think there's space for a brand like Perfect Moment is more fashionable in its product category. So this is how we will grow the business is by broadening the collection, pushing harder in certain markets and then taking advantage of the Asia opportunity for us. And finally, obviously, it's good to grow the business, but there's no point of growing a business unprofitably. And one of the key transformation of the company now since the beginning of the year is really about rightsizing the organization, reducing expenses. We've transformed our supply chain. We've managed to maneuver through the tariffs that are being imposed. We moved production from Asia to Europe. We've changed our logistics so that we pay duties on cost or wholesale versus retail. And so we've really sort of improved the services and saved a huge amount of capital. About 10 points of margins have been improved this year alone and meaningful cost savings across all functions have been achieved through getting rid of excesses, fire people. And so the focus has been really around taking this company to profitability as quickly as possible. So these are some of the initiatives here. So I realize I'm talking a lot, and it's already 9:26 here p.m. in Europe, so 3:30 almost your time, and I want to leave room for Q&A. Here are some of the numbers. You can see on the slide. The underlying business continues to grow. Our wholesale order book has very healthy numbers. We've got a fairly clean cap table. All of this information is available online. We're trading at a high discount to our competitors. And I will leave it at that for the presentation. So thank you so much for your time. I will go to the questions now that I have access to over here.

Okay. So I've got a question here. The question is North American now drives 40% of sales. What initiatives are in place to deepen penetration in this market and capture repeat growth? So as I mentioned earlier, we are already in some of the greatest stores in the U.S. So -- and whether it's Gorsuch in the mountains, whether it's some hotels, whether it's Saks, Bergdorf, Neiman Marcus and Bloomingdale's. And so what we're doing is we're looking to bring additional resources in the U.S., North American resources that know that market very well and really working with our existing customers to see how we can grow with them. So to give you a sense, Moncler probably clears between $2 million to $4 million per door at Saks. That's a huge business opportunity for us to tap into. And so we are starting conversations as to how we can take some of that market share, how we can grow into it, how we can develop shop-in-shops. So these are in flight, and we're very excited about. Another question. China represents 50% of the global ski market. What progress has been made on entry discussion? And how should we think about timing? So a very good question. China market is, in fact, 50% of the market, luxury and skiing, $100 million skis as I mentioned. This is a market that's very tricky to enter as a foreign brand, and so one needs to do it with the right partner. And I'm pleased to say that we are having conversations with partners that I believe could be suitable for us, and it's clearly a priority for the company. So as soon as we find the right partner, we will be quite excited about entering that market, and it's certainly a high priority for Perfect Moment. Another question. With social media reach of 16 billion monthly impressions and 500,000 followers, how are you converting brand awareness into sales growth? Another great question here. So what we're doing is we are investing in communications is really around creating now what we call brand desire. It's about storytelling. It's about getting people familiar with the brand. So it's quite one thing to know about it. It's another to sort of make people buy it. And I think historically, we've -- while we've been great at brand building and we've built this great brand equity. I don't think we've been that great at converting that brand equity into customer. And so that's what the new team from Canada Goose is doing, creating a strategy, hiring new people and having a very concise strategy on how we convert that awareness into consumer. Another question here, and I realize I'm running out of time. What milestones over the next 12 to 18 months should signal progress towards your stated $150 million revenues and profitability ambitions? Another great question. Well, I think a couple of things. One is our path to growth. So are all of the initiatives I've mentioned translating into top line growth so far in our B2B business, we've been able to show 30%. We also have other initiatives. So we believe we're back on what we call a growth trajectory post-COVID low. And so look for growth because that will be a very good indication as to where we're heading, number of accounts and so forth. And then this will be, I think, the key driver. The China entry, if we're able to find a Chinese partner, we can announce on that. I think that should give you a very good sense of the direction of travel, depending on the quality of the partner we can find. And so you should be able to see in the underlying business, some trend that should hopefully give you comfort that we can get to this between $100 million and $200 million in revenues. This may go fast. This may be go slower, but we are fairly confident in our ability to get to $50 million initially and then ultimately to $100 million through the right strategy. So that's it for me. I think we're sitting at half past 3:00 now. So again, thank you so much for your time today. I hope you found this presentation interesting. We, myself and the management team are available for follow-up calls and one-on-one meetings tomorrow if you wish to hear more about the story. So again, thank you very much for your time, and speak to you very soon.

Thank you. That concludes Perfect Moment Limited's presentation. You may now disconnect. Please consult the conference agenda for the next presentation.