Moncler lost around €140 million in market capitalization on Nov. 3 as its shares plunged by almost 5 percent following the broadcast of an investigative report by an Italian TV program a day earlier. The journalists of the “Report” program on Rai 3, one of the country's state broadcaster's channels, alleged that Moncler was buying feathers for padding jackets from labs in Hungary where geese are mistreated, with their feathers being ripped from their skin, against European laws.
Moncler denied the claims, announcing it would take legal action against the news show, and issued a statement that said that all the down it uses is sourced from strictly certified suppliers that adhere to the principles established by the European Down and Feather Association.
Suppliers, said the brand, are obliged contractually to guarantee their respect for the treatment of animals, as set out in Moncler's Ethical Code, available on the brand's website. The firm added that there was absolutely no link between Moncler and the images transmitted during the program, which showed farmers, suppliers and companies operating illegally or unacceptably, as all of its down suppliers are located in France, Italy and North America. Therefore, the distressing images that Report showed, according to Moncler, were linked in a deliberately misleading way to the brand. Report's crew said they are ready to show the evidence they collected at any time.
Report's crew also went to factories in Romania, where different pieces of the jackets are stitched together. The journalists claimed that, at the end of the chain, a jacket being sold for between €800 and €1,000 costs Moncler around €40 to produce. The company dismissed these allegations, saying that the figures provided by the program were “misleading” and did not include a series of additional costs that raise the true price of every jacket.
Prada was also criticized during the TV program for moving part of its manufacturing outside of Italy.
Meanwhile, Moncler reported an 82 percent increase in its net earnings to €70.5 million for the first nine months of this year on 16 percent higher sales of €449.3 million. In local currencies, sales rose by 18 percent with growth of 36 percent in the Americas and 35 percent in Asia. China, Japan and South Korea were singled out for their strong performance. Sales were down by one percent in the domestic Italian market.
Moncler plans to take over the distribution of its products in Korea on Jan. 1. It will continue to expand its network of single-brand stores, which currently comprises 163 doors. At least 15 new ones will be opened in 2015.