Good afternoon. This is the Chorus Call conference operator. Welcome, and Thank You for joining the Moncler 9 months 2021 Interim Management Statement. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Paola Durante, Strategic Planning, Intelligence and Investor Relations Director. Please go ahead, ma'am.
Thank you. Thank you, operator, and thank you all for joining this call. As usual, the interim management statement call is hosted by Luciano Santel, Moncler Group Chief Corporate and Supply Officer, and by myself. I start providing a brief overview of our results and then Luciano and myself, as usual, we take all your questions. Before going into 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 and are subject to risks and uncertainties that could cause the results to differ even materially from those expressed in or implied by these statements. Let's now go into the presentation, and I move to page two, where you see we have included some brand highlights.
In fact, I wanted to start the call today commenting on some of the many important projects and events that happened in the last few months. Of course, I have to start with the Moncler Genius event, Mondo Genius, which took place digitally and physically on September 25th. I hope you have seen it, the shows or the replay after, but really it has been an unprecedented event, and the results were above any of our expectations. As of today, the show, the event, generated a total reach of 4.2 billion, with 510 million views and 238 million on the live audience. Impressive. The quarter has not been only Mondo Genius. We had also 3 strong Genius launches, Moncler Fragment, Moncler 1952, both men and women, and Moncler Hyke, actually, our new Genius.
Going to page three, you can see that in October, we introduced the teaser of our new corporate campaign, We Love Winter. As you know, you know we love winter. Pre-launch our first ever fragrances, which will be fully launched then in Q1 2022. Last but not least, Stone Island presented its running shoes in collaboration with New Balance. The sneakers have been completely sold out online, basically immediately, I have to say, I think in 1 hour, and recorded extraordinary results in all the channels, in particular on e-tailers. I just mentioned the results on END. The raffle on END for the shoes, the shoe was in the top 10 ranking of the END app. Okay, let's now go to numbers.
Let's move to page 4, where we comment the group nine months revenues results. As usual, I comment constant Forex, but this year, differently from other years, I will mainly comment performance versus 2019 numbers to, as you can understand, to underline and to value the underlying trend of the business, excluding the pandemic effects. In the first nine months of 2021, Moncler Group reached EUR 1.2 billion revenues, up 56% versus 2020 and 20% versus 2019. This result includes also Stone Island, the green box. That revenue, as you know, has been consolidated since the first April, so for 2 quarters, the second and the third quarter within the nine months, and contributed in the nine months EUR 156.4 million.
Excluding the acquisition of Stone Island, Moncler revenues in the first nine months grew 36%, as you can see from the chart versus 2020 and 4% versus 2019, with a significant acceleration in Q3, which showed a double-digit +10% growth versus 2019. Let's now move to page five. We focus now on Moncler brand only. On page 5, we analyze in detail the performance by region. Okay, let's start with Asia, the blue box that, as you know, include APAC, Korea and Japan. Asia generated EUR 468 million in the nine months, contributing to 46% of total revenues.
The region rose by 24% in Q3, driven by the Chinese mainland, which further accelerated in Q3, and also by Korea that continues to post outstanding performances. Rest of APAC and Japan suffered mainly from the COVID restrictions. You know that Australia has been closed most of the quarter, and also many of the other markets. In particular, Japan has been very difficult in the quarter due to the COVID restrictions. Let's now move to EMEA. EMEA reached EUR 369 million and contributed for 37% of Moncler nine months revenue.
The region showed a significant improvement in Q3 with the revenues very close to the 2019 levels, -2% as you see from the chart, thanks to a much stronger DTC business, which has been driven by online. You know that EMEA has been the online, the direct online has been integrated since July and by local customers. Locals, in particular in the quarter, grew. I say nice, but it's really a very good double-digit growth recorded a very good double-digit growth and fairly offset the lack of the tourism, of the travelers, as you know, particularly that we are still missing, particularly the one outside the region. Finally, Americas. America posted another strong results. In Q3, you see, the business was up 10%.
This performance has been partially offset, so the DTC did very well in the Americas, while the wholesale business has been impacted by a different timing in deliveries, and also by some wholesale conversions into retail, which affected the results. Very solid results across the regions. Let's now move to page 6 of the presentation. Yes, Moncler brand revenues by channel. In the first nine months, DTC revenues reached EUR 702 million, contributing to 69% of total Moncler brand revenues. In Q3, DTC rose by 15%, driven by online, and also by the strong performance of some new opening stores. With regard to the direct online, I can confirm, as I was saying, that we have concluded the internalization of our e-commerce business.
Japan has been internalized early July, and China in October. Moving to the wholesale channel. It grew by 2% in Q3 versus 2019, in line with our expectations. Q3 performance has been influenced by a different timing in deliveries among Q2 and Q3. In fact, as you may remember, in Q2, given the very high request of products, of garments, especially in the U.S., we delivered early also some full winter products to fulfill the demand. In terms of year-end indication, I can confirm, just to give you an indication, that year-end wholesale should grow around mid single digit compared to 2019, of course. Now page seven, I'm looking at Stone Island results.
In the first nine months, Stone Island, so from January 1 to end of September, Stone Island reached EUR 244 million, of which 156 consolidated in the Moncler Group. Stone Island recorded in the first nine months a 27% growth versus 2019. Q3 revenues, as you can see from the chart, reached EUR 100 million, with a very strong contribution of all channels and all markets. You see in the chart, on page 7 that EMEA and wholesale are the most important markets from one side and channel from the other. Finally, now I move to page 8 of the presentation, Group Monobrand Store Network.
At the end of September, the group retail stores reached 263 units, of which 233 are Moncler and 30 Stone Island. In the third quarter, Moncler opened 9 doors. Among these, there are some very important flagships that you can see the pictures on the following pages. We opened Milano Galleria, we opened Chengdu Swire, we opened Hangzhou MixC, we did the relocation of Los Angeles, Rodeo Drive, and also we refurbished entirely the Beijing Sanlitun store that is now a real flagship also performing quite nicely. In terms of temporary store closures, just an update on the COVID. At the end of the quarter, we had 3 stores closed.
Nevertheless, you remember that during the quarter, sorry, particularly in Japan, but also in the month of August in China, we had some shorter opening hours in our store or some very short temporary closure. Moving, so you can see page nine, Milano Galleria, page ten, the pictures of our very nice Chengdu Swire flagship.
The Ginza and the Los Angeles Rodeo Drive, page 12. Now let's move to page 13. That is also, yes, my last page. Page 13, a very quick sustainability update. I just would like to remind and underline the fact that 30% of Genius outerwear presented in Mondo Genius, so in the last show that we had, was entirely made with sustainable fabrics, and all bear the Moncler Born to Protect tag. This tag guarantees that the products follow Moncler strict protocol for sustainable materials. As you know, Moncler sustainable jackets have been introduced in the 2019 collections, and since fall winter, and since then, the range has been progressively enlarged and also extended to other categories. I think with this comment, we ended the presentation.
Now I will hand over to the operator for the Q&A questions, and Luciano and myself will take all your questions. Thank you. Thank you, operator.
Thank you. Excuse me. This is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. To remove your question, please press star and two. Please pick up the receiver when asking questions. The first question is from Susy Tibaldi of UBS. Please go ahead.
Hi. Good evening. Thank you for the presentation. My first question would be on what you're seeing now. I know you're quite usually quite reluctant to comment on the exit rates or the current trends, but it would be very, very helpful to understand how you saw the progression of the growth during the quarter, especially to understand if you saw an acceleration in September, given that that's when your important part of the year starts, and that's when local consumers start to have a higher weight. To understand if you saw an acceleration in September going into October, and any volatility during the quarter.
Secondly, thinking about the fourth quarter, again, last year, you managed to grow 5% in Q4 retail despite having significant amount of stores closed, which was very, very impressive. Is it fair to assume that this year the traffic is going to be higher? You're seeing higher traffic than last year, similar conversion rates, and therefore we should imagine also volumes to be stronger than last year, plus a little bit of pricing on top. If you can confirm how to think about the fourth quarter. The last point on the margins. Last year in H2, you achieved a record EBIT margin of 39%, significantly ahead of 2019. There were some one-offs, obviously, but how should we think about H2 now?
Because, if I'm not wrong, at the H1 call, Mr. Santel mentioned that, 28% margin for the full year was a reasonable assumption. Now you had a very good start to the second half with a good prospect for the fourth quarter. Is this 28% now a bit too conservative? Thank you very much.
Okay. Susy, thank you. Thank you for your questions. About your first question, the current trend and the evolution of the business trend in Q3. In Q3 was a strong quarter in many regions, not all of them, because unfortunately Japan suffered. The reason why Japan was weak was totally because of the pandemic spike in July and August, and also the delay in the vaccination plan. Now, the vaccination plan is much better than a couple of months ago, and the business not only is doing much better. With the exclusion of Japan, I would say that in Q3, all our regions did very well.
Regions like China that were already very strong in Q1 and Q2, in Q3 did even better than the two quarters before. Regions like Korea that has been strong, not since ever, but at least over the past two years. Also last year, you may remember that Korea kept growing. In Q3 was even stronger than before. The same for Americas and Europe, much better. I mean, as Paola said, Europe in Q3 did very well, notwithstanding the total lack of travelers that, as you may remember, represent in Q3 or used to represent until 2019 up to 60%-70% of our business. A great job that was done with the local customers.
Of course, some minor countries like Australia, still heavily hit by COVID or Singapore, Taiwan did not do well at all. I mean, overall, of course, about Q3, we are very happy for the acceleration we saw in Q3. Talking about the beginning of Q4, talking about the last weeks, I can tell you that October, the very first two weeks of October started pretty well with some kind of acceleration. I mean, over the past two weeks, business is doing very well. Again, it's just a qualitative comment. I mean, we are happy with the way the Q4 started. So far so good.
About your second question, which is about Q4, whether or not we can do in the retail better than last year, I can tell you that for sure we have a space positive impact because we have more stores and also the impact, the space impact coming from some important locations like Los Angeles, Rodeo Drive. Assuming a better Q4 this year than last year is, as usual, very challenging, but it is reasonable. Not unreasonable. Of course, needless to say, when we talk about Q4, needless to say because this is something we keep saying every year at this time, we still have ahead the 10 most important weeks of the year. Every day is an important day of this quarter.
It would be very imprudent to anticipate strong results for the year end. We are confident because looking at the recent past, business is doing well. It's not only a matter of business because, I mean, we are confident about the brand, we are confident about the extraordinary results that the Mondo Genius event developed around the world, and the metrics that Paola communicated are really amazing. To answer your question, challenging but doable. Last question about operating margins is to some extent a consequence of the second question about how we perform in Q4 in retail. You are right, we said 28% because we believed, and we still believe, honestly, that achieving the same result of 2019 was and still is very difficult because EBIT was over 30%.
I think that 28% or 29% is a fair assumption, but it will totally depend on the next weeks. Again, we are very positive, confident. We cross our fingers because again, we have ahead the most important period of the year. I think that 28% or 29% is something reasonable. Thank you.
Thank you so much. Thanks.
The next question is from Melania Grippo of Exane. Please go ahead.
Hello, good evening, everyone. This is Melania Grippo, Exane BNP Paribas. I've got two questions. One, if you could please elaborate on the performance that you have done in the U.S. You mentioned that it was impacted by some shifts in wholesale, as well as the conversion of shop-in-shops into concessions. If you could please provide a quantification on this impact. Second question, if you could please remind us your CapEx budget for 2021 for Moncler as well as Stone Island brands. Also how should we think on this item for next year? Thank you.
Okay, thank you for your question. About U.S., U.S. is one of the regions that did better in Q3. Actually, Q2 also the business in U.S. and North America, Canada too, did very well. Q3 we saw an acceleration specifically in the direct to consumer, in the retail and online business. The wholesale business, of course, results depend totally on the deliveries. As Paola said before, we started earlier than last year and then the year before to deliver to our key accounts, specifically to our department stores in the U.S., fall winter product, more than before in June. This was because the sellout of department stores and not only the last spring summer season was very strong.
They found themselves at the end of the season with no product. They requested, strongly requested, Moncler to anticipate deliveries of fall winter season. This is the reason why the wholesale business in Q2 was particularly strong. In Q3 of course there was some kind of a rebound effect because of the anticipation of deliveries, and this is the only technical reason why you see a smaller growth rate in Q3 than in Q2. Overall, business in the U.S. and North America is doing very well. Of course, when we talk about wholesale, we report business results based on what we deliver. We look much more closely and much more in-depth to the sellout of our customer, wholesale customers.
I can tell you that the sellout of department stores in the U.S. is very good. Not only in the U.S., of course, but now we are talking about the U.S. Of course, the conversion of some shop-in-shop into concession stores moved some business from wholesale to retail. Again, overall, excluding these technical aspects, the business overall in North America is doing very well. I mean, we are very happy. Something I can add is that the business growth would be much stronger should we decide to exclude Hawaii. Hawaii is simply because some brands do exclude Hawaii. If we exclude Hawaii, the growth rate would have been much higher simply because Hawaii business is done with Japanese customers so they did not visit Hawaii this year.
Business is strongly down in Hawaii. If we exclude Hawaii, the business growth would have been much higher. U.S. very good. Your second question was about CapEx. CapEx, nothing changed. At the beginning of the year, I think, or the end of last year, we said that our target was about EUR 130 million for Moncler only at that point. I mean, the CapEx budget for Stone Island is not so big. It is, I mean, less than EUR 10 million, so I can tell you that overall, at the consolidated level, we still expect a CapEx in the region of EUR 155 million, EUR 140 million, including Stone Island. Thank you.
Thanks.
The next question is from Erwan Rambourg of HSBC. Please go ahead.
Hi. Good evening, Paola and Luciano. Thanks for taking my questions. I have two questions on China, and then another one. I'm wondering if you could explain the acceleration in mainland China on the two-year stack, because a lot of your luxury peers have actually seen a slowdown which is related to COVID-19 cases between late July and mid-August. Is it a question of awareness of the brand? Is it a particular launch? Is it a particular campaign? Can you explain how you're actually accelerating in mainland China? My second question on China is on the price positioning that you have in China today relative to Milan or relative to Paris, for example. I remember you had quite a premium a while ago.
It's probably not very important as the world is shut, but, you know, eventually, hopefully, the world will reopen, and I'm just wondering where you stand in terms of that, price gap. Then my third question is on Mondo Genius, to understand if the sales are mostly gonna be in Q4 or if, the bulk was already invoiced, late in Q3. Thank you.
Yes. Thank you for your question. About the China acceleration is something to be honest very strong. Very strong. That is the clear demonstration of the strength of the brand. Because in China mainland we are doing the business this year we did in 2018 with the Chinese customers all over the world. That means that we have practically offset all the lack of business with the Chinese customers in Europe or in North America, Korea, Japan with the business in their local market in China mainland. The reason for that, I mean, I think there are several reasons, but in one word, the brand in China is very strong.
Anytime we deliver, just to give you an example, a Genius collection, the first region in terms of results, of response is China. Fragment did very well. I mean, all Genius collections did very well and are doing very well in China. So, the explanation is that, Chinese customers love the brand. Also, if I look at the results of Mondo Genius event, the digital results, I can tell you that 30% of the views we reported came from China. So overall, we are very happy and nothing to add, except that, the brand in China is really very strong. About price and price gap, we still have with China price gap of about 140. 140 is-
Oh.
Yeah. Yes. Okay. 140. 140 is not the target we set as a management team. Roberto and I have a target that is to go down to 130. It is taking longer than expected, but I think that we will get there, probably in a couple of years. 140, of course, needless to say. Still, higher than planned but much lower than what it was in the past. Of course, the reason why we believe that we have to further decrease the price gap is not because of business concerns, but because we believe that having a more balanced pricing policies across the region, say, is more a matter of brand integrity. That's why we believe that the price gap will have to decrease. Right now is 40%. About last question was about-
No, it was about Mondo Genius sales, but you can-
Yes, Mondo Genius sales. Honestly, I mean, first of all, important to remember that Mondo Genius, as much as all the Genius event we run in the past, was and still will be a brand event. That means that what we aim to obtain with this kind of event is a strong enhancement of the perception of the brand, of the brand awareness. The digital results, Paola said before, are very encouraging because we were able to reach people, younger generation customers, new customers in new geographies, new people that probably didn't even know the brand. This is extremely important. The business impact of this kind of event is not something we can see overnight. Honestly, we didn't expect to see overnight a strong impact on business.
Even if I can tell you that the online business in September, during, before, after the announcement of the event, during the event and after the event has been very good. Again, this is not and was not our goal. Mondo Genius has been, let me say, an extraordinary brand event, very important for the future.
Yes, maybe important also to highlight that, we have several Genius launches presented already on September 25, but that will cover the next 12 months, so it will be every month, one launch. We started with Rick, that was the first one, but the coverage will be over 12 months.
Excellent. Okay. Thank you very much. Thank you.
Thank you.
The next question. Excuse me, madam. The next question is from Thomas Chauvet of Citi. Please go ahead.
Good evening, Paola, Luciano. I have three questions, please. The first one, coming back to retail trends. The +15% two-year stack retail growth. You had quite a step up in openings in the period compared to the first half, particularly in Asia. Could you give us some color on the space contribution this quarter so we can try to derive the two-year stack retail like-for-like? I mean, if my rough calculation is correct, you had maybe low single digit negative LFL on a two-year stack in Q3. Is that sensible? I guess the acceleration in the first two weeks of October suggests you may be already positive.
Secondly, on e-commerce, well done for finalizing the internalization of that business, that channel. Can you share the overall growth of moncler.com in the period and the weight of e-com sales in, I don't know, total Moncler brand or total Moncler retail sales? That would be useful. Finally, with your retail opening plans and the resurgence of COVID restrictions in some parts of Asia, are you still sticking to all your store opening plans for Q4 and the beginning of next year, particularly in China in the run-up to the Beijing Olympics? Thank you.
Okay. Thank you for your question. About your first question, the 15% growth in Q3 was driven by space, comp. I mean, of course, we don't make our comp public in Q1 and Q3, but I mean, we are still slightly behind in 2018. Of course, all the numbers I'm commenting are regarding this year as compared to 2018, not last year, of course. Comp, we are still behind, but the strong impact came from space because we opened over the past 2 years several important stores. Let me highlight important because we said Milan Galleria, but Paris Charles de Gaulle, Chengdu, the expansion, the relocation of Los Angeles Rodeo Drive, Kobe. I'm just talking about flagship stores.
I mean, Sanlitun actually is not a new store, not a relocation, but important to mention because in the same space we developed a new store, a flagship store, very impactful, very visible with very strong results as compared to before in the same space. All of these factors together and many others made this strong 15% growth rate. Retail planning or new openings for this year, nothing changed. All the stores we have in our plan will be opened and are ready to be opened. For 2022, our strategy, distribution strategy, in China has not changed at all. Of course, our strategy has been since ever, sorry to say it again, but you know that Moncler strategy has been since ever very, very selected in all the different regions, including China.
We are very happy with the implementation of the strategy to open much bigger stores, much more visible. I just mentioned Chengdu Swire, which is a beautiful flagship store, but I didn't mention Hangzhou, for example, which is another new opening. Actually, it is a relocation in a new much bigger two-floor space. I just mentioned Sanlitun. I mean, there are other cities we are targeting, mostly tier one, but also these two cities where we have in our pipeline new openings for next year, but still with the same very selective strategy. You know that our business strategy is driven by brand strategy and not by the interest to chase volumes, something that would be very easy in China right now, but is not our strategy at all.
E-commerce. E-commerce growth. E-commerce contribution.
E-commerce contribution. Okay, first of all, I mean, as Paola said before, an important fact we already commented at the end of Q2, we internalized 100% of our online business. We started exactly one year ago with North America. Then, in May, June, Europe, in July, Japan, and just 10 days ago, China. Right now, 100% of our e-commerce business is under our direct control and operations. Results are good, honestly, not only because the, let's say, the machine behind the scene is working very well, but also because by driving the car directly, we can maximize the opportunities. Online is contributing very nicely to our direct consumer growth.
Thank you, Luciano. Just to clarify on the space contribution. Basically, in the third quarter, all the growth came from space. Your retail like-for-like were on a two-year basis, down probably low single-digit negative. As you said, it accelerated in the first two weeks of October. I suspect it's now positive, slightly positive. Is it a fair assumption?
What I said is that comp in Q3, I mean, the growth, the DTC growth was driven by space. Talking about comp, we are still slightly behind 2019. This is Q3.
Okay. Yeah.
Q4 is premature, but as I said before, business started very well. I mean.
Okay. Understood.
I will. Okay. Good.
Thank you very much, Luciano. That's great. Good luck for the fourth quarter.
You're welcome.
The next question is from Antoine Riou of Société Générale. Please go ahead.
Good evening, Paola. Good evening, Luciano. My first question is on the performance with locals in Europe. It seems really impressive. Paola, you said that it was growing strong double-digit, but if we just take the assumption that locals were, let's say, 35% of sales in 2019, and considering that this year you have almost no tourists, you should be growing strong triple-digit, you know, to reach the sales level you reached in 2022. That would be interesting to get maybe a bit more quantification on the locals performance versus 2019 in Europe. That's my first question. The second question is just a quick clarification.
Paola, I think you said wholesale should be growing mid-single digit in Q4. Is that correct? This is versus 2019. The last question is just on Stone Island. Given this is mostly a wholesale business, can you give us maybe your expectations for growth in the first quarter? Many thanks.
Okay. About your first question. In Europe, locals did very well. You said that, and we confirm that. I think that, as a company in Europe and the retail team is doing a great job with the local customers and all of the clienteling activity and all of the clienteling culture that has been developed over the past years is delivering the results that are very strong. Let me comment only on the qualitative way. I can't provide the numbers, but what I can tell you, and it's something that you know, I'm sure you do, is that locals in Q3 represent less than 50% of the business.
By having this kind of results, considering the lack, not 100%, but a very strong lack of tourism, at least the growth rate in Europe with locals was very good and very strong. Your second question about the wholesale, what Paola said, to be precise, is that she and we expect the wholesale business for the year-end to be in the region of mid-single-digit growth rate for all the year, not for Q4. Compared to 2019, yes, Paola, you are right. Mid-single-digit for the 12-month period, not for Q4. This is just to clarify, even if, I mean, consider that we have reported the 5% in the nine months.
I mean the Q4 is not expected to be much different. In any event, the 5-6% or whatever, I mean, in the region of mid-single digit is for the fiscal year. About Stone Island. Stone Island, as you said, is not 100% but 80% wholesale business model. The vast majority of the business, the majority of the business is concentrated in Q1 and Q3. Also because the wholesale business is more predictable than the retail business, I can tell you that, I mean, our results for this year are expected to be good. I can tell you that, I mean, it's not something we normally disclose, but I hope that we can touch and pass the EUR 200 million for the nine months.
We consolidated the brand in line with the consensus. Of course, the retail business is growing organically so far, and I would say very nicely. When I said before that October is doing very well, I was thinking of Moncler, but not only. I was thinking also of Stone Island that is doing very good results on the retail side. I mean, overall, Stone Island, again, the consensus, this is something we can disclose because it's much easier to predict. It will be in the region of EUR 200 million. Of course, EUR 200 million consolidated, plus what we did in Q1 that unfortunately is not in our figures or is not in our numbers. Overall, the 12-year period will be in the region of EUR 300 million.
Thanks.
The next question is from Elena Mariani of Morgan Stanley. Please go ahead, madam.
Hi, good evening, Paola and Luciano. A few clarifications from me, please. I mean, the first one is on China again. So can I clarify that when you say that you had a strong sequential acceleration at Q3 versus Q2, you mean in the retail comp? Not in the total overall constant currency growth, which would also include the space expansion. To link to this question, can you clarify what the overall growth of the Chinese cluster was in Q3 versus Q2? How is that developing into the fourth quarter? How much is China now overall as a percentage of total sales? Because I remember that before the pandemic, that wasn't your largest market in Asia, but it was Japan.
How is the split across countries now looking like, post-pandemic? A couple of other clarifications. You talked about online and the fact that now you're fully internalized. Is there any impact of this internalization on the online business that we should know, in terms of, like, P&L? What is now the percentage of online sales, out of the total group sales? A final question is on Moncler Genius, because I was really impressed by what you put together. Clearly, I mean, that event was, like, record-breaking, across, you know, multiple platforms and on social media. In terms of, what you're planning over the next 12 months, is there something that will be done differently, on the Genius project?
Is it more about the way you're sponsoring the event that has been just magnified so much because this year's event has been great. In terms of, like, launching events or pop-ups, I mean, how is the planning looking like for the next 12 months, and how different will that be from the previous events? Maybe let's leave the COVID period aside. Maybe we can compare it to 2019. Thank you.
Elena, we hope to have, sorry, I'm laughing because, sorry, you had a lot of questions, but on top of it, the line was very, very bad. I don't know if it was you or. I think we understood most of it, but in case, I'll leave it for the. The first one was on China and clearly the acceleration that we have seen, when we talk specifically Q3, we always refer to, you know, the top revenues of the business, the market. I also leave Luciano to comment further. Yes. I mean, talking about acceleration makes me smile because, China has constantly accelerated in Q1.
Let's say that the Q3, as I said before, was even better than Q2, when Q2 was even better than Q1. As Paola said, this is overall revenues, even if been some important openings. Of course, the vast majority of the growth rate in China is organic for sure, because of what I said before. About the Chinese cluster, that was the other correlated question. We have Chinese customers-
The question was actually on China as a country. I don't know, Elena, if I'm right.
Yeah, I mean, if you can disclose also the Chinese cluster, that would be great.
Also the Chinese cluster. Okay.
Well, let's say that the Chinese cluster is still more or less the same on a percentage basis than before, about 35%. The big difference as compared to 2019 is that right now that 35% is totally developed in China. Before that 35% was split more or less 50/50 in China and around the world. That's about China. The second question was on-
Online.
I understood the contribution of the online business on the total. Of course, first nine months is not meaningful. It's much more meaningful to provide the number at the end of the year. I can tell you that for this year we still stand in the region of 15%, one five, including not only the direct e-commerce, but also the online business we do with retailers, which is not much different from what we did last year. You may remember that last year there was a combination of a strong online business and a very weak retail and wholesale business. This was the reason why we jumped to 15%.
This year, all the business channels are growing very well, and we still expect something in the region of 15%, maybe better, but not much higher. This is something. This is what I-
I think there was also a question on cost related to the online, if I'm not mistaken.
The cost, Elena, was the other.
Cost.
Okay. The cost, I mean, is something we have discussed also in the past. This sourcing project was a very complex and also expensive project, honestly. Looking at the numbers, I mean, we targeted EUR 15 million CapEx two years ago, and we ended up more or less with EUR 50 million excluding China, because China was on the top of the EUR 50 million. Overall, big CapEx, but not so big, to be honest with you. Of course, what is much more important is related to the running cost because in order to source such a difficult, complex and growing business, we needed and we still need to make our digital organization stronger and stronger.
Of course, we have replaced a concession fee we paid before to YNAP with much smaller concession fees we pay to the different providers like Salesforce, Riskified or whatever, but also with internal costs of our organization. At the end, we are very happy with the results and very confident that the best still has to come. Of course all of this project was, as expected, very important also from the cost point of view. On Mondo Genius-
Last question was on Mondo Genius. Here, Elena, you have to help us. I think I understood you ask what was different this year from the previous one, but I'm not sure.
Yes. Not on the event itself that you've done in September, but on the next twelve months. Is there something that is going to be done differently over the course of the whole project?
No, not that much, Elena. I think that, I mean, all the collections we have presented did very well. Some are better than others. Of course, some collections are more saleable, more commercial than others. Fragment is a collection we did since the very beginning. It is still doing very well because it's a streetwear style. The design, Hiroshi Fujiwara, very well known in Japan, but even at least as much as in Japan, in China and around the world. Other collections like JW Anderson, more sophisticated. I mean overall, no significant changes, and no surprises at all. I mean, we are happy about the Genius collections over the past 12 months.
Understood. Thank you, and sorry for my bad line.
Yeah.
Now is better.
The next question is from Piral Dadhania of RBC. Please go ahead.
Yeah. Hi, good evening. Just two from me, please. The first is on Stone Island. I just wanted to understand on a medium-term view, as you think about increasing the store count there and increasing the retail mix, in line with your multi-year strategy, how should we think about the CapEx that's required to support that growth? I think you said this year the CapEx for Stone Island is EUR 10 million, which is around, I think, 4%-5% of sales. Should we anticipate that going up? And if so, to what sort of level? I appreciate it's small relative to the total group CapEx number. Then, just another follow-up question on Stone Island.
Is the Stone Island e-commerce platform sitting on your newly formed internalized digital platform at Moncler, or is that still a project that needs to happen? Then secondly, just on supply chain and raw materials inflation, I think, if I'm not mistaken, you are suffering from some delays in getting certain fibers or raw materials out of Japan into Europe. Are you seeing any sort of ongoing pressure in terms of your overall supply chain? As we think about peak trading in fourth Q, you know, how is the business set up for auto replenishment and being able to supply products for both your retail stores and wholesale accounts as they sell through? Thank you.
Okay, thank you for your question. About our long-term review on Stone Island, it is totally unchanged, and it was the base, and I would say the reason why we wanted and at the end we accomplished this kind of, let's say, wedding between the two brands. The long-term view is first a long-term brand view. That means that, I mean, we believe in the brand more than in the short-term business. Talking about the business, we also believe, strongly believe in the opportunity that Stone Island brand has and may have in the future by developing the retail business.
We also believe that first we have to develop together with the Stone Island team a stronger retail culture, which is something that we have been working on all together as a team during this year, and we will keep working in next years. Then to open or to start opening on a very selective basis some new stores in geographies where we believe that we can enhance the potential of the brand. Talking about the CapEx, you said correct. I mean, the CapEx in Stone Island right now are very low because I said before that they are less than EUR 10 million this year as compared to EUR 130 million of Moncler.
Of course, a significant part of that EUR 130 million have been spent since ever for the retail development. Of course, what we expect looking at Stone Island is that this amount in CapEx will grow, but what we look at is the percent of CapEx in the future on the total top line that is expected not to grow more than the 6% or 7% we reported for Moncler. I mean, it will not be a drastic change in the business strategy. It will be a step-by-step development of the retail business. Of course, CapEx, you are right, will grow for sure, also because we believe that working on the store format is something extremely important to maximize the perception of the brand.
About Stone Island online, you said something extremely correct, even if I don't have a precise answer now. I mean, the online is right now operated by YOOX Net-A-Porter, is powered by YOOX Net-A-Porter, as much as it was the online business of Moncler until a few months ago. We have in our plan, we are looking in our plan at the opportunity to integrate under one platform also that business. But honestly, it's not something we want and we are in the position to anticipate right now also because honestly we don't believe this is a priority in the short term. But for sure, in the future, we will evaluate this opportunity also to take advantage of all the work that has been developed with the internalization project for Moncler. Last question.
On supply chain.
Very big question. I mean, I will try to make the long story short. First of all, about that example of Japan, it probably came out in some meetings, but I mean, honestly, I can tell you now, that of course, we experienced problems this year, but honestly, looking at the results, nothing particularly impactful on our revenues, really in one word. That means that at the end, notwithstanding problems associated with COVID, associated with the increase of raw material prices. I think that this year so far so good. Let me cross my fingers because the problem is that it's not over yet, you know?
I mean, we are monitoring very closely and every single day the situation around the world, which is not only the raw materials, the technical fabrics that we buy from Japan, but it is also the production we make in some regions like Romania, where unfortunately COVID is still a big problem. Of course, we are also experiencing an increase in the cost of raw materials, even if I can tell you that we don't see material impact on our margins for this year, notwithstanding the fact that we have not increased the prices this year. We plan to increase our prices only in the second half of next year.
It will be a nice single-digit increase, price increase to offset the important price increase of raw materials, of transportation, of labor cost. The situation is something that, I mean, we are not worried about, but for sure we are monitoring the situation constantly and very, very closely. Again, so far, so good.
Very comprehensive. Thank you, Luciano. Aura.
Thank you.
Thank you.
The next question is from Karina Schuster of Goldman Sachs. Please go ahead.
Hi there. Thank you very much for taking my question. Congratulations on the full internalization of your online business. I realize we've had a couple of questions on it this evening, but just to take a little bit more of a medium-term view, could you just help explain to us the benefits of that can bring in terms of your omnichannel initiatives? Can you also update us on your online strategy going forward and whether that's still on track with external partners? I think in the past, you've talked about the potential for a Tmall flagship store, for instance. Any update there would be great. Thank you.
Hello, Karina. The first question is on the benefits of internalizing the online in terms of omnichannel.
I mean, I think that the internalization was needed and necessary. I would say essential step to develop the omnichannel, because by having one channel directly operated and the other channel operated by a third party, it's very difficult to implement a real and a strong omnichannel strategy. Right now we have had a strategy to really implement the omnichannel, starting from the services we can provide to our customers. Of course, you know that we already started in the past, even though we were still under YNAP, the so-called Click from Store.
That is something that resulted to be very, very important, very successful, not just for the business we developed, but because we were able to meet our customers' request in the stores anytime that size of that style is not available in the store itself. Of course, this is only one example. Another important example of omni-canality or omni-channel regards the so-called single pool of inventory. Of course, in the past, our inventories for the online were also physically separate because one was under the YNAP warehouse and the other. Right now, all the inventories of all channels are in only one warehouse per region. We have here in our central hub in Piacenza, all the inventory for all the channels.
This is extremely important to move inventory or simply the allocation of the inventory, not just physically, but to allocate the same inventory to the different channels depending on the different demand. This is something that we are experiencing very positively right now, but I think that in the future and the next year and the year after will be an important factor of growth of the retail business. The question was also about-
The second one was the in concession.
In concession at Tmall also.
Yes.
I mean, in concessions is a business that has been growing very strongly over the past few years. You know that we are converting some of these businesses into concession, like Mytheresa, and not only in the future, but I mean, the conversations are still in work in progress with our partners. That business has been growing very nicely. Honestly, let me say it again, still under the same very selective strategy to work only with high-end customers, with high-end retailers and only under the volumes we believe are proper for that channel. About Tmall, I mean, the conversations are open with them since ever, and I mean, we don't have anything decided 100% with them.
Of course, this may be something that may happen next year.
Okay. I think we now have the time for the last question. Operator, if you can open up to the very last question. Thank you.
Okay. Thank you, madam. The last question is from Paola Carboni of EQUITA SIM . Please go ahead.
Yes. Hello. Hi. Good afternoon, everybody. I have three questions. First of all, about the acceleration you have mentioned for the month of October, I was wondering if you can provide some color about the geographies which improved the most compared to the third quarter on a two-year stack. Further question, still looking at the fourth quarter, we saw last year a strong acceleration from Q3 to Q4, about 20% more of growth from Q3 to Q4 in comparison to 2019. Do you see any reason for a different performance this year in going from Q3 to Q4? I would say actually this year you have even the support of the very recent launch of Genius.
Should we expect the same magnitude of acceleration in comparison to 2019 between Q3 and Q4, or is there any different dynamic to be taken into consideration? A third question is instead on the cost side. Now that you have completed the internalization, the insourcing of e-commerce operation, should we expect that some of the duplication of costs you probably experienced in 2021 will disappear in 2022? If so, what kind of uplift could we expect? Thank you very much. Uplift in margin, clearly. Thank you very much.
Thank you, Paola. About your first question, October acceleration, I mean, we see this kind of acceleration mean a good results. Let me say good results in all the geographies. The only geography I would like to mention, because I said before that was very weak in Q3, is Japan, that right now is recovering very nicely. Other than Japan, all the other geographies are doing well, with some exceptions, because we still have Australia with stores that are in part closed. I mean, but are exceptions. I would say that overall, all regions are performing well. About the increase of Q4, as compared to Q3, you said that 2020 or 2019? Because,
2019.
No. Okay, because 2020 was a quite unusual year. In 2019 and the growth of Q4 compared to Q3 in 2019 and this year, I mean, it's difficult to predict. I can tell you that, I mean, Q4 is normally much stronger than Q3 for our retail business. The assumption to take in 2019 may be something reasonable. Again, what is important and what I said before, or I'm not sure I said, but in any event, the market expectations represented by consensus for this year are reasonable. You can take those numbers as a reference.
The cost side of the internalization, for sure, we have increased our costs. I said that before, for the investments we have made in the organization, with some double accounting, as you said, correctly. Next year we will not have double accounting. In any event, the double accounting impact is not so significant, honestly. I mean, it's not something that we will significantly improve our margins of the online business. The lack of double counting costs, what we expect, what we believe, and what we aim to, is to maximize the online business for next year and the year after, by taking advantage of the machine that now is totally under our control.
Okay, thank you. Thank you very much.
Thank you, Paola. I think that with this question, our call tonight is going to end. Of course, we are here, my colleagues, Alice, Carlotta, myself, we are here. If you have any follow-up questions, please feel free to call us or to write. In the meantime, we thank you very much for the time, and we wish you a very good evening. Ciao to everybody.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.