Good morning. Good morning, ladies and gentlemen, welcome to Moncler 2018 Capital Market Day. I'm happy to share with you our strategy to make Moncler walk into the future. Fine tuning for me is a must. The vision is bold and yet simple: Function, beauty, quality, research and innovation must perfectly match with energy and uniqueness.
Mokeller will become an even more exciting and enjoyable experience for our current clients and as well for the new one. We want to talk to everyone, everywhere and to all generation. We did this in the past, and this is what made us successful. We want to continue doing it in the future by using new language and new tools. This is why we have created a concept with the name I tell you more than many words.
One house, different voices. This is not a claim. This is the essence of our strategy. Our Montclair House has 8 window. The first one, flexibility.
A fast changing world require a flexible attitude To be successful and keep the pace with clients, you need to constantly reengineer your own business. And you need to do it at the speed of digital. We always change ourselves to find new way to fine tune our engagement with the clients. We're not in between to become a community where closeness and quick interaction play a key roles.
Number 2 is evolution.
We are not slimming at wheels. We are ready to change when everything is going well. And we don't wait until the problem come along. We know that if we wish everything to stay successful, we need to keep an open mind and constantly evolve. More than ever, we have welcomed change, and we have quickly fine tuned our mindset, strategy and communication, we remain loyal to our DNA.
Moncler's strategy has evolved with client attitude and behaviors. We'll offer something extraordinary and new in a continuous way. But this is very important for us, not only product, but engaging experience in a direct and fast outgoing dialogue. Multiplicity. We believe in borderless horizon.
We provide elegance, comfort, quality, functionality, uniqueness, And this make us always contemporary. The idea that there are no more season for us, it's not just a jingle. Rules has changed. The concept of seasonality has become meaningless as client are looking for continuous emotion and newness. Convection and shopping occasion are gone.
Always on shopping is the normal is the new normal. Travel is becoming an important shopping occasion. Well, we have really distracted answer to all of this. Editorial project on monthly basis able to create expectation and also representing powerful engaging moment with client. Product that speak to a multiplicity of clients, current and new one, traditional millennials, Generation Z as well as those I like to call the indie visuals, who express themselves through social and visual media.
Store that are home away from home, maintaining a strong local flavor and that always offer new, tailored ice opening experience with a touch of discovery. Uniqueness. We need to continue amazing and be surprising. And we did and we do that through an internal collaboration with my exceptional team members and through open source collaboration with great artists and creative people who interpreted Moncler code and identity. Uniqueness has always been the milestone of our strategy, and we never stop exploring its surrounding spirit.
Our uniqueness also express itself in the way we present our collection. Honestly, forgot about traditional runaway presentation. We welcome new creative path and conceptual space like the one you saw yesterday night at the Genius Building. Creativity is like love. You must let it run free and wild.
We have to put together under the same roof very different talent and creativity that speak a different language. And again, one house different voices. The result is a multiverse of distinctive creation where the Moncler DNA is trustable and respected. As we have seen, Audacity is not lacking at all. New code.
Communication and relationship building are the other magic crucial ingredient of our cigarette sauce. If we don't follow the rules, people will not play the game. If we don't speak their language, people will not listen to us. Well, we work on new codes and use new tools and touch points. And designed to be communicated through different channel at the same time.
Content are engaging in the environment developed to break through the digital world and create a Moncler community. Number 7 is very important point. It's something very, very new for us, a new kind of community. Our messages will be direct with no in between. In close collaboration with strong business and media partner, it will be a new kind of community under the hashtag we are part of Genius.
From June, a month editorial project will be circulated through media and digital partner. Our selected retail network, exclusive retailers, best specialty store, influencer, pop ups, wholesale exclusive distributor as well as retail window and direct marketing activities. And final, between me and you, the real key of success for me is the energy. We are used to give our all because we are fueled by energy. Energy is what feeds our passion and passion create loyalty to the brand.
Energy is the line force of our community and clients feel it in everything we do. I want our store to have the vibrant energy you find in the best specialty stores, driving clients in the discovering journey of the Moncler experience. Moncler is a place where curiosity, emotion and expectation are always rewarded. So Moncler future start now. Flexible in planning to be able to fine tune quickly, full of energy and act of creativity and innovation, tune into people and their language, pace at the speed of digital, all this quality and technology oriented, open to looking for still unexplored territories.
In a nutshell, know how to make it work, creativity to make it magic, simplicity to make it happen. A beautiful as simple as that. Thank you very much.
Good morning, everybody. Thank you for attending this 2nd Capital Market Day. It's a privilege to have now to translate in action the vision of our Chairman. Today, it's and below 0. So I think it's a good way to start and to share with you what we have been accomplishing with the team.
It has been a long journey. The last 12 months has been very, very intense for all the different people in the company because what the vision of Remo in order to translate that, it implies a lot of changes in the way we work. It's a real evolution, but it's giving a lot of energy and passion in all the company. And I'm greeting also all the people that are showing us live in the different markets. We gave the opportunity to our team in the different region to watch this Capital Market Day.
So a big hello to everybody. I will start shortly with some of the things you already know. This is helping us to shape our vision about the market. What are the current trends that we see in the luxury industry? Well, first of all, I have my screen also it will be helpful.
Thank you. My screen is not moving. Thank you. The current trend on the luxury industry is positive. We expect growth of 4% to 5% on a yearly basis for the next 3 years.
And the total market is supposed to achieve a growth of and reach a €300,000,000 to €300,000,000,000 by 2020. What we see also as big changes is an uncertain scenario and we believe that what is going to be a winning solution is to be thank you is going to be flexible and to be able to react quickly. I think the shape and the size of Montclair, the energy we have inside is something that is going to help us to continue to outperform the market. 2nd point, the weight of the younger generation, it's already now a little bit more than 1 third of the total sales in the luxury market. This is expected to continue to grow in the future and to reach almost half of the total sales in the luxury sector.
Here also I think that with what we have seen with Genius yesterday evening, we are in a good shape to be able to ship that future. The expectation and the desire of this new generation is different. They are looking more for experience than for product. They see fashion trends and they see it as a mean of self expression where they showcase themselves as being part of a community. And we see also that impulsive buying is becoming more and more important.
So we need to change the way we communicate. It needs to be faster, more frequent, dynamic and energetic. And we believe that quality and uniqueness is what is going to make the difference with this new generation. Other important elements, the increase of the online business. Currently, I think it's Bain and Aromonitor and McKinsey, they agreed on the current market share of online on the luxury sector.
This is including cosmetics around 7% to 9%, probably more 7% for the fashion industry, a little bit higher for the rest and is supposed to grow and to reach between 20% 25% by 2025, which means that online is becoming more and more important, but also that retail will continue to play a key role. So I think you need to be able to manage both. And we believe that the companies that are going to be able to deliver superior client experience are the company that are going to be able to merge the in store activity with all the data that is coming from the online. So taking all the customer inbound, the way they navigate on the web, the way they are active on the social media and to mix this with data that you have through the internal CRM to develop a superior client experience. We are going to show you what we are currently doing to really take advantage on this on the job that has been done over the last 2 years.
Finally, in terms of the way the market is moving, you see that there are very different markets, American and European market that are mainly local, Japanese market and the Chinese that are much more buying, traveling. The data that you see here also include cosmetics. Of course, if you talk about just pure fashion, the weight of the local market is a little bit higher, but it's giving you a flare of the way this market the market is moving. And if you look at the same market, but with the vision of the different generation, you see that travel is playing an even more important role for the generation that are the new generation that are traveling much more frequently and buying also when they are abroad. I think being able to be relevant on the local market and at the same time being able to shape and to take advantage of this traveling community will be one key of success for the future.
I think a great strategy is great only if the implementation and the execution is correct or is enhancing the strategy. So before starting to disclose the action plan that stays behind the vision of our Chairman, I would like to come back on some of the elements that we disclosed during the previous Capital Market Day that took place in December 2015. First, we talked a lot about outerwear, saying that we wanted to remain at the top edge of the outerwear category while developing complementary categories. Here you see the evolution that we have had in terms of revenues on the different categories. Outerwear that represent now a little bit less than 80% as being a category that has been growing by 28% since 2015 with an average CAGR of 13% from 2015% to 17%.
The network category where we have been investing a lot in terms of technology, sub warfare, culture, implementing pilot lines for the development of the nuclear internally, recruiting people, what the technical knowledge about this product has been the fastest growing and best performing category. We have been growing on average by 32% year on year. We have also increased the visibility of this category in store. You see now much more this category much more present and visible in the stores. And this total growth has been of 75% between 2015 2017.
Shoes was a big focus that we have had with shoe pilot project where we have changed the way we sell. We have been training our people in the store. We have developed experts. There is a training path now that is implemented in the most important Moncler store in on the retail side. We have reviewed the location of the storage of these shoes, the way we display them, the way the ceremony and we have been able to grow by 46% since 2015 with an average car of 21%.
Distribution always an important item for us. Here we wanted to be able to deliver superior experience. One of the aim was also to start the development of flagship stores. In total, we have been opening 28 new stores. We also take very much care about the existing network, not to have it updated.
So 23 relocation expansion took place over the last 2 years. Part of the strategy was also the development of shop in the shop in wholesale. We opened 25 wholesale shops over the last 2 years. Just looking at last year, it was there was 17, 11 in the last quarter of 2017. We opened 8 flagship stores, 8 airports location at the end of 2015, 4 are new openings between 2015, 2016 and 2017.
I think one of the question we always get when we were discussing about the expansion and the store size that was increasing. As you see here, the store size increased from 120 to 135 square meter was our ability to maintain best in class productivity. Well, basically what we have been doing is not only we have been able to maintain it, but we have even been able to grow it from €32,000 to €35,000 per square meter. This we have been and I will disclose that when talking about the flagship store and the global stores. This thanks to increased UPT because of the capacity our capacity to display new category and also the increase of the average selling price.
So these two factors together has helped to increase the productivity. One important focus of the strategy that we disclosed 2 years ago was the focus on the client, the new client experience, the fact of also knowing and getting to know our client much better. In 2014, our capture rate for new clients was 44%. We have been able to increase it to 74%. So basically, our database increased from roughly 300,000 new clients to 1,300,000.
And this knowledge about the client has been leveraged, allowing us now to have a daily dialogue with our consumer. We have been training our sales force, our client advisor. We give them a tool that we call Montlion. Here you see there with this tool that is an app. They have the ability to follow their clients on a worldwide basis.
We are still in the process. We have finished the rollout, but they are still increasing the number of clients that they are following. On average, every client advisor is following now 50 clients. We think that there is the potential probably to follow between 101 100 and 20 clients per year. But just last year, we had 105,000 client telling action.
What we are doing also, we are measuring their level of satisfaction. Of course, if you do mystery shopping, you get some knowledge about the way your store is being managed. But I think the best feedback you can get is the direct feedback from the clients. So we introduced last year a program that we call Vibe, Vibe for getting the vibe from the consumer. So now after every single transaction, we get the immediate feedback of the client who wants to answer and response rate is quite high and we have more than 25% response rate.
And what is interesting is to see the level of commitment of the client because not only they are giving us their rate about their experience in the store, but we are 30% of the client that are giving us written suggestion on how to improve and hence the client experience with Moncler. This is showing a very high level of commitment and involvement of the client with the Moncler brand. Some of the figures that are showing that we know our client better, of course, the gender, but if we knew it in advance, we are now able to track also the age of the clients. So which generation and how each generation is buying. We're capturing their level of spend.
So we saw we know that the 14% best clients, the top of the pyramid of the Montclair clienteling is generating 38% of the revenues. And we have attached every client, every client advisor a number of clients that we call preferred client. I state we attach which is wrong. We don't attach. They choose the client they want to follow.
And currently as the rollout finishes in August last year, we are following 10% of the database. This 10% of the database is generating 20% of the total revenues. The objective that we have for the end of this year is to be able to track the best 20% of the clients and directly interact with them on the daily, weekly, monthly basis, probably getting an impact of 1 third, 35 percent of the total revenue of Moncler. Some of the retail KPIs that we usually don't disclose, we always give figures that are in the range, But we thought that after 2 years, it was also important to show that the strategy that we have started to put in place 2 years ago is working. So you see here the level of repurchase rate that we had in 2015 when we just started retail excellence project, we are at 22.6.
This has been increasing, is now at 25.4. It has been increasing year after year in a consistent way. I think there is still potential to do better in the future. And of course, this is one of the target we are giving to our store managers. Basically, this is having an impact on 44% of our clientele of our client value that are repeat purchaser in our database.
So you will see that with the Genius project, I think that now we have a stronger collection. We have been working a lot to enhance our retail network and the quality of our network, but also the quality of our wholesale distribution. And we know our client better. I think we have set the base for what we call the new challenges of Moncler. What are these challenges?
I think clients are looking now for new values. They are looking for experience. They are looking they are more buying on an impulse base instead of repeat purchase. They are more digital and they are looking they don't look at one channel in specific but they are moving from one channel to another. They are really only channel.
The answer of Moncler, and this I think is one of our strengths, is the product development, the creativity through the Genius project. The communication revolution that we are currently starting to implement with our first native project that is Genius that has been fought digitally from the very first day. The distribution development where we foresee still potential to grow in terms of network and in terms of size of our stores and what we call Retail Excellence 2.0 that is the further step that we want to put in our Retail Excellence project. We think we are at the start of a new phase. We try to look back on what has been achieved over the past 5 years or over the past 15 years since Remo took over Moncler in 2003 and we have seen we think we are at the beginning of the 3rd phase.
The first phase, if you think about product was the development of the iconic product, really developing of the outerwear category. In 2008, we introduced the GAM and we started to develop new categories, the knitwear, the shoes, the bags, the soft accessories. And for us, 2018 is the start of a new area with the launch of Genius. If we talk about distribution, we start really as a wholesale company. We had 3,300 stores at the time.
The business was purely wholesale until 2007. 2007 started the retail development. It was really the moment where we started to expand geographically also Moncler. And we think that now we are ready to face this new challenge of the omnicanality. I will come back to this.
We are currently having a pilot and we plan to have a full rollout on Europe in 2018. In terms of clienteling, clearly by the redevelopment of the collection at the beginning, we targeted new high end segments. With the expansion of the geographical presence of Moncler, it was the opening of China, the opening of Asia. So clearly new nationalities get to know the brand that was very much focused on Europe in 2008. And we think not only new nationalities, the new paradigm, but also the new attitude.
So how to response to new expectation from the clients in the future. And finally, in terms of communication, it was pure traditional media, mainly above the line communication at the beginning. We started in 2014, 2015 with stellar rate CRM communication, leveraging more and more now the database that we have and this will continue. And I think now we need to add a new pillar, which is the digital part. And you will see that we are currently shifting our spending from traditional media into more and more in above the let's say outdoor communication and digital communication that will represent 70% of our spendings by 2020.
So some of you or most of you have had the possibility or the chance I would say to visit Genius yesterday evening. We wanted to showcase it the way it has been presented to distributors, to the press, the media with a huge success. Moncler, it's a new way to talk to consumer into using new codes and goes beyond the stated rules and opening new paths for Moncler for the future. So let's have a look at what is this collection. 8 different voices that are shaping the universe of Moncler, every one of them with his own vision, but combining them is giving his new identity, evolved identity of Moncler.
The first, the number one is for pure essence for us. You know Pierre Paolo Pichel is the current Creative Director of Valentino. I think he has developed a collection that is really enhancing the essence of the brand and the purity of the brand with real Couture, Elan is the Couture part of the Moncler collection in Ingenious. Tuesdays for Pop Up Trademark. This is coming back to the essence of Moncler, the very start 1952 where the brand was born, enhancing the best our best sellers, our iconic product with pop up colors and contrasted a large logo.
I think a product that is perfect for the online business and to be leveraged on the social media side. Number 3, stay for Playful Flair. This is the DNA of the brand. Grenoble with this unique approach of combining technology, technicity and creativity, fashion elements on the ski wear but also on the after ski, something that is unique today on the market. And this has been also the fastest growing part of our outerwear collection over the past 3 years.
Number 4 stays for pragmatic femininity. Simone Rocha, the British award winning designer from the UK. She is getting inspiration from the Victorian climbers with a multilayer approach, really enhancing the femininity. This is the most feminine part of our collection in for the launch of Genius. Number 5, Craig Green, another British awarded designer, probably one of the most talented one that is on the market.
He won the prize of in 2014. Greg conceived items and rewrite the dialogue between clothing and body, dress and habitat is also the one that has been probably leveraging in the best way all the technology and knowledge and expertise of Moncler, developing new shapes and really looking for functionality as well as protection. Number 6, on one of our 2 Japanese designer, Noir K. Ninomiya, one of the designer of Comme des Garcons He's also somebody who has been able through craftsmanship really to reinterpret it Moncler and to define new wearable geometries with a lot of uncrafted work, not only on the outerwear but also working on accessories and on shoes. Fragments, the number 7 for subculture of subtleness is called the king of streetwear, probably the one that are going to generate the largest volume and probably the highest expectation is going to be also the 1st launch that we are going to operate on the 12th June of this year.
It's going to be also the only one having 2 drop, the first one at beginning of the year and the other one at the end of the year on December 2. And finally, the last one, forgoing viral Palm Angels like when you visit a museum and when you get out of the museum, you have usually this book, this bookshop. I think it's our interpretation of the genius building when you get out of the building. This is our bookshop He's re tempering the merchandising and translated that into a gift shop, one of the very successful presentation we had last week in Milan. If one of the criteria is of success would be to define the perception and let's say the feedbacks we're getting from the press.
I think that's been one of the most impactful presentation because it was bringing completely new codes and let's say in terms of the way the digital world and also the press has been embracing this change in Moncler has been very, very positive. Other elements are of course the selling campaign that we have had last week. We met 350 wholesale in the location the same location where we had the show. Carefully selected out of the 1500 that we have. And I must say that the feedback we are getting from them was or is very encouraging.
If we look at the Genius project, we will look at it as a virtual cycle. It started very much as a communication project. As I was saying, it's the 1st digitally native project. We started from not only the product but from the communication. How do we want to express?
How do we want to interact with our consumers in the future? I think the time where we had 2 big fashion shows and 2 campaigns, advertising campaigns is gone. I think the new consumer wants to have monthly, weekly, daily interaction with the clients. But in order to be able to do it, you need not only to come with product, we need to come with content. A nice advertising campaign is not enough anymore.
I think you need to bring content that is interesting for the client. Of course, this has had a tremendous impact in terms of distribution. We have been reviewing, revisiting completely the way we will sell our Genius campaign. We selected the number of people or number of wholesaler that will be able to sell it. Also in our network, it's not old collection in older stores.
We carefully select depending on the size, the potential of the stores, the technology of clientele, which collection will arrive when. This is of course a big challenge in terms of design and production because we have shortened the time of development. We are faster on the markets. Our presentation in February with the 1st drop in June, it's a challenge in our industry. And we are at the beginning, but we are confident that we'll be able to deliver it.
In terms of merchandising also, bringing in new products on a monthly basis in store is going to bring a lot of energy and we want also to increase the desirability of the brand. And finally, this has had an impact on the total supply chain from the product development to the production and to delivery on time in the market. I think Remo was saying we are going to launch the first project on the 12th June and is the 12th June is not 13th, it's not 15th. We want to have a worldwide launch in all the store fragment is the only collection that will be full network. On the very same day, at the same times on the retail, on the best wholesaler and there will be a pre launch that is done with 1 of the online.
I think I could have had a circle number 6 maybe on the middle. I think it's a project also that has been involved involving all the company in all the different aspects of the company. So I will put people also in the middle because this has been leading us to work in a different way, interacting much more between the different department because it's as we say, it's omnichannel when you sell, but it also omni people in the company that has been pushing the people with merchandising, with production, with the wholesale, with the retail, with the creative communication, with the digital team to me come to weekly basis. So I think also internally, this has been creating a lot of energy. And I would like to take the opportunity to thank all the team internally that have been working very hard.
I'm saying this, but it's not finished. But I think that the first presentation that we have seen is already a reward for the people that have been working to make this company evolve. If we look at the way we plan to launch the different collection without going too much into details, but you see that the first collection is going to be presented in June is the fragment. We wanted to start with the first collection that is going to involve all the stores. On the 12 June, all the retail stores will get the 1st drop of fragments.
We selected 1 on liner that is going to pre launch at the same date as the retailer. On the wholesale side, this collection is going to be matches. And then you see that for each single drop, there is this icon with the touch because for each one of them, we are going to leverage this launch with 1 of the wholesale line. So with Pierpaolo Picchu, it's going to be also matches. With Noir, it's going to be the Dollar Street market.
I think this genius has also opened new doors for Moncler. We are currently closing a deal with Dollar Street Market, allowing us to have in each single Dollar Street Market shop a permanent store for Genius, which was not possible before. So clearly, this new creativity, this new connection are also door opener for new distributor that we where we couldn't enter or where we couldn't have a permanent called Sensus. Then 1952, which is our iconic collection, is going to be launched with all the online wholesale department stores. Simon Rocha is going to be launched with Net A Porter.
1st October, it's an important moment for us because the objective of each one of this drop is to have the product arriving in store, having this presentation has been the main presentation for 3 weeks to 1 month and then to retrieve the collection. In order to give space, new collection to arrive. So fragment will arrive on the 1st June. On the 2nd July, there will be the presentation of Pierpaolo Petri. So little by little, the presence of fragment drop 1 will drop, will fade down in order to give visibility to Pierpaolo.
The same one, the Noir collection will arrive at the end of July. October is going to be the first moment where the Genius building will be completed. So all the collection will be presented in 15 shop in the shops worldwide. So you will find again fragments Pierre Paolo, Noir, Craig Green, 1952 in 15 shop in the shop worldwide that will be present have a present between 15 days to 1 month and presenting the full collection plus some exclusive that were not presented when the first launch was done. To give you some of the stores where this will be done, we have now negotiated and sometimes getting a lot of requests from retailers and onlineers to get and give us visibility for this genius building.
We have Pranthan with a full takeover. We have Dubai Mall. We have Iseitan in Tokyo. IFC in Hong Kong and Shanghai. Plaza 66 in Shanghai.
Shinsegae, Gangnam in Seoul. Macau Galaxy that is going to also free space. We're also going to have shop in the shop with wholesaler like Zum in Moscow, Barney's in New York with the windows, Old French Brew in Vancouver, Kudmeski Mosque in Moscow, Bundashov, Maxfield in Los Angeles. So really a strong request to give visibility to the Genius Core election for 2 weeks to 1 month then in October. Finally, we are going to have the last drop is going to be Grenoble in November and the second fragment drop in case we were afraid not to have traffic at the end of the year, which is usually the very peak of the season, we gave a little bit more with the launch of the 2nd drop of fragments for all the people that would not have the opportunity to buy during the 1st drop.
So you see new way to communicate, a lot of energy, a lot of content and communicated and leveraged through the best wholesaler, department stores, our retail network and the online business. But this is the not the only one. We talked a lot about Genius, which is the most visible part or the emerged part of the iceberg. But below there is the rest of the collection that is doing the largest part of the sales of Moncler. I will start with the main collection.
Main collection is our milestone. We have a project here for main that we call Icon Lab with the idea of reinterpreting and reinventing the DNA of Moncler. And this will include in the course of 20 nineteen-twenty 20, a project of customization of the main collection. The growth that we expect from the main collection is a high single digit growth between 2018 to 2020. Grenoble, as I was mentioning the DNA of the brand, one collection that is going to be available all year long is the Montclair Lab for new innovative materials.
It's also where we are going to leverage the presence of Grenoble in our resort store on a permanent basis. And here we are confident looking at what has happened over the last 3 years and the creativity that has been shown through the genius part of Grenoble, we expect a good double digit growth between 2018 to 2020 for this collection. A part of the collection, we don't get a lot of question when we meet you, but maybe because also we didn't speak a lot about it in the past, but I think the other part that is having a very nice development over the past 3 years has been the Enfran collection. We want to reinforce the leadership that we have in the outerwear for the Enfran. We want to expand the retail and the online distribution.
We are having currently 12 shop in the shop worldwide. We opened the 1st dedicated shop in Spiga. I think for the people who will come this afternoon to visit Monten Napoleone and we'll pay a visit also to the Spiga store. And I must say that is working extremely well here. We expect a high single digit growth between 2019 to 2020.
Other categories, the knitwear, as I've said before from 2015 to 2017, this has been the fastest growing category in over the past few years. We want to further increase the visibility of this category, enhance design and merchandising. Here we expect also good double digit growth between 2019 to 2020. And finally, a category that is relatively new for us. It was really the accessory of the accessories was really something that was in the past developed when the full collection was developed, when we had all the outerwear collection developed.
There were people starting to think, hey, maybe we should have some gloves and hats, but really at the end. And now what has changed is that over the past 2 years is really we have, 1st of all, a dedicated creative people a creative person to develop the category. We have been enhancing the visibility on the store. And I think that is potentially is the category with the highest growth potential that we have for the next 3 years. Footwear and Leather Boots, we are going to complete the DOS penetration of this category, adding another 27 stores this year in our what we still call footwear pilot, which is more a new way of selling the shoes in our network.
We also we expect a double digit growth in the next 3 years. And finally, eyewear, you know that we signed 2 years ago a new partnership with Marcolin. We have reviewed completely the collection of Moncler that we find now much more qualitative. It has been very much welcomed both by the market because of course we had not only selling our store, but there is a dedicated distribution for the eyewear, roughly 2,000 stores that we want to double in the next 3 years. And I think here there is still and we have seen potential leverage on the price selling higher at higher price because there is a request for higher priced Moncler sunglasses in the network.
And here also we expect a good double digit growth in the next 3 years. Uniqueness and human creativity, different messages, digital drives them forward. So if you want to have a if you have a good idea now, you need to express it also digitally. And here, if we talk about the way we want to change the way we communicate, as I mentioned, Genius is the 1st digitally native project that we have. It has been fought digital.
We talk about digital now internally in the company and we communicate digitally. The rhythm of communication is also changing. As I was saying from 2 campaigns per year to something that is more now on a monthly basis, weekly basis. The main project for the next few years is genius that we want to leverage at 3 60 degree. It's also a project that we want to continue.
It was a project that was initiated through calling we call it We All Wear Montclair that has had the highest number of, let's say, consumer involvement, tax and social media exposure. And we want to continue this, which is really giving to not only celebrities but also to normal people that are Moncler client the possibility to showcase themselves on the in the digital world. And finally, the last but not the least is what we call the Moncler Moments. Moncler Moments, we had 105,000 clientele in action last year involving connecting directly through our client advisor with the end consumer. And here we want to integrate in our CRM activities and clientele activities also all the data that we're getting from the social media sites.
And is the last chart of my presentation will give you the vision on how we want to go to a Montclair, Montclair 2.0, how we want to be able to enhance the client experience in store to for our clients. With the aim for us is to really shift from this traditional media investment into something that is going to be mainly digital, but also leveraging on the outdoor advertising and reaching at least 70% investment in terms of midyear spending by 2020. When we disclosed the Moncler client promise during the last market Investor Day in 2015, we mentioned the fact that we wanted to our people, our client to be feeling at home when they are in the Montclair store. And I think this is something important that we are now not only putting words in a claim, but that is something that has been lived by all our team on a daily basis in the stores. What we see here is 4 pillars to enhance and have a more connected and integrated network.
We want to create a very large Moncler community with our clients, and we are going to leverage this on 4 pillars. The first is the in store experience. The second is the Moncler leveraging the Mountain DNA. The 3rd pillar of expansion is the travel retail and the 4th one is the digital world. Really the focus for us on this will be the strengthening of the organic growth of Moncler and of course expansion and integration of the channels.
Well, first of all, we opened 7 flagship stores over the past 3 years with Montclair. We had one that was working extremely well. It was Paris, for Bou. And we have been completing or not completing because we think there are 8 7 months to come, but we have had the opportunity to open 1 flagship store in each one of the region. The last one being Canton Road and Moscow that we opened in at the end of 2017.
Here what we have noticed is not only that the client experience for the client is elevated to a completely different level, but also that the comp for this store has been largely above the regular store in full year 2017. And for the people who have forgotten the one of the figures that we mentioned yesterday, we had a 14% comp growth rate in 2017. These stores have been largely outperforming the performance of the traditional stores. UPT is larger also. We are 6% above the unique per transaction and this is very much linked to the fact that we are able in the largest store to showcase and display more categories.
And the loyalty rate, which was probably the largest surprise that we have for the people attached to a flagship store, the royalty rate is 19% above the one of the other store probably linked to the fact that you have a larger assortment. This is driving more frequent purchase of the client attached to the flagship store. The second point was and we started this project already in 2015 is really coming back to why are we present in ski resorts. We 13 of them. We think that we have the possibility to selectively enlarge the network, probably 2 or 3 more openings in the 3 years to come or and also to enlarge the existing.
So here you see on the left a picture of the store in Shad and in the middle, the store of Mejave. These were 2 stores that were relatively small. Mejave, I think it was the the smallest store that we have in the network, 30 square meter, now it's 130. Of course, it's difficult to deliver a superior client experience in the 30 square meter store. So we decided to invest in the stores.
And I must say that we are getting now a lot of positive feedbacks from our clients because we have started the development of specific visual merchandising, specific windows, specific product for the result. And this is the part of the network that has been growing the fastest between 2015 to 2017. We are also having now on a yearly basis events driving customer satisfaction, enhancing the experience of the clients here. You see on the right, one of these events where we introduced new partnership that we had, one with SKI with a Swiss company called Zai, another one with a company from Bergamo called Cask. So we did some specific development on to complete the universe of Moncler not only with the outerwear but also with helmets, with gloves and with the specific ski, very high end position ski.
Airports is another possibility for us to further leverage the trend that is a natural trend of the younger generation that traveling more and more. This is a part of the luxury industry that has been developing. If you look back the 15 years at twice the pace of the rest of the industry. In 2014, we had 4 locations. We opened 4 locations between 2016 2017.
And for 2018, we have already secured 7 new locations that you see here. And we plan to reach at least 30 locations by 2020. Here also, dedicated product, dedicated visual merchandising, dedicated windows and also a push for us to further continue to harmonize the pricing that we have around the globe because these consumer, they are traveling around the world and there is the need for us to further align our or decrease the price gap between the different regions, things that we have been doing. We are decreasing the price and cutting the price gap between the region by half over the last few years and we are going to continue to harmonize this pricing on, let's say, on a continuous base. Online, the best performing channel with the results over the last 3 years, yearly average increase of 30% over the past 2 years.
Also a presence with e tailers online as wholesale that has been increased, but in a qualitative way, always leveraging on events. You will see 2 of the events we've been doing with 2 German onliners. 1 is StyleBob, the other one is MyTeresa in Stag. The other one was an event that we did with them in Berlin. There is a pilot project that has been started in November last year that is with 3 stores that we are where we are piloting our new omni channel approach.
One of these stores is here in Milan. We have Torino and we have Bond Street in London. What we plan is to have a fully operational omnichannel ready for mid of this year. This will include the exchange in store and to have a full rollout of the omni channel by the end of 2018 in all Europe. Europe represent today roughly 60% of the sales that we have online and this will be the network rollout omnichannel will be completed by the end of this year.
Our focus for the future is to continue to create this online digital culture. We have a plan for end of 2018, beginning of 2019 to internalize Korea and to develop our own online platform with full omnichannel capabilities in Korea by end of this year beginning of 2018. This is to further increase our knowledge about the online business. We want to continue to reinforce the partnership with the retailers wholesale from Ocala Genius to have a fully operated omnichannel by 2019 in all the region, not only Europe. We'll start with Europe and then 2019 will be the rollout of Americas and the rest of Asia.
And we think we have a strong belief that China needs to have a dedicated approach. So we think that the recipe that is working for Europe, that is working for Americas need to have a dedicated specific different approach for China. We have started with the launch of our Hong Kong flagship partnership with WeChat with the pop up store that we want that we are now, let's say, increasing the visibility of our online pop up store with the launch of Genius. And we are working currently working with other project. We're currently assessing the possibilities went to with Timol in the Luxury Pavilion.
It's still the phase of assessment. We haven't decided yet, but what we are sure is that clearly this is needs a specific approach. Our goal is to double our online revenues in the next 3 years. Control selectivity of the network is what is going to continue to drive our decision. We believe that the brand has still important levels to drive growth in all channels, growth through new store expansion and organic growth.
And if we start by retail, this is in blue you see the existing road map the existing map of the presence of Montclair in retail. And what we plan is to open 2 new countries on average per year over the next 3 years. In the plan, we have Mexico that we are going to open by July this year. We have Spain and Portugal in the pipeline for 2019. We have Oslo that is going to open in June this year.
We have the opening of Dubai on the 5th March. And we have plans to open in Thailand and South Africa by 2020. If we talk about wholesale, here also we think that there are still growth potential for Moncler. We started the development of shop in the shop strategy, what we call the retailization of the wholesale. And we have been opening 17 doors in wholesale in 2017, still cleaning our distribution.
We have been closing 100 doors in last year and we have seen the growth rate of wholesale has been double digit last year, plus 10%. The performance of the shop in the shop, we are carefully measuring the investment we are doing that. That are usually share investment between us and the department store with dedicated sales force, dedicated merchandising, increasing the quality of the merchandising also in the store. The average growth rate that we have had over the last 2 years for the shop in the shop is 39%. I think this is something that we can still continue.
There is for the 3 years plan in the pipeline an opening of 15 to 17 stores year on year, so an additional 50 shop in the shop for Montclair in the next 3 years. In terms of integration with retail, we have now teams that are in charge of the merchandising for both channels. So it's the same vision merchandising team that is taking care of the Moncler retail stores, but also of the wholesale. So we have more integration, leveraging on the knowledge that we have in the retail side also to be leveraged on the wholesale side. You see here some of the example of the shop in the shop.
The opening this is the airport of Doha that we opened in January last year. This is the 2nd shop in the shop that we opened in Munich with Oberp Bollinger. The first one was the one we opened in 2015 with Harrods. We have the opening of Ala Moana in Hawaii with Saks. Marbella, another kids store that we opened this year and this was a pop up store that where we have now also presence of free shop in the shop in Moscow with Zoom that has been a big success.
It was the largest pop up we have ever been doing. It was at the end of 2016, a 250 square meter per car that we have with them on the ground floor. We'll see this also an opportunity to test markets, to open new markets to see if this is the presence, if there is a potential to further develop the retail possibility there. We have in the pipeline, you see here some potential openings for the next few years. You see Manila, Bali.
Bali is confirmed for the opening of 2018. Kuala Lumpur is also confirmed. Saipan is under assessment. Bogota, Lagos, Lahore, Mumbai. In some of these markets, the present will be probably always only wholesale.
Some of them, if proven to be successful, could become potentially a retail store in the future. There is also the strong potential to further develop the presence in selected retailers. We foresee there a potential to at least double our sales in the next 3 years. Finally, talking about Retail Excellence, I go quickly through 2,008 to 2014 to spend more time on what has been achieved over the past 3 years and where we want to go. But clearly, at the beginning when we started the initial development of Moncler, the focus was more on store openings and on acquisition of new clients.
Not too much about our people, not too much about the process. It was really opening, opening, opening. Always in qualitative location, but we thought a strong retail culture. The knowledge about the client was limited and the communication was very much a corporate communication with which was more above the line. What we did with the launch of Retail Excellence 1.0 was to revisit, reshape the client experience in the store.
This has been, I remind you, something that we have developed with our client advisor in the store, with the region, with the store manager. The second pillar was the people. So developing the internal culture, we have multiplied between 2015 2017 our training hours by 4. We have been increasing the retention of our client advisor and store manager. We have decreased, let's say, the rate of people leaving the company by half.
So all the investment we are doing now are investment for the future. And we believe that if you want to realize the end consumer, you need first to realize your employer and your store managers. And it's something that is part of the project. And the final part of the Retail Excellence 1.0 was the focus on the operation where we have aligned the operation worldwide. At a worldwide scale.
We have now one way to operate Moncler. The client has been the focus over the last 2 years. It will continue to be the focus. As I was mentioning, we multiply our database almost by 4, leveraging now, giving the tools to our client advisor to be able to interact, putting a frame but giving them the freedom to freely communicate with them. And we have seen that the loyalty rate has increased.
And we have also developed personalized communication. We are giving tools to our client advisor, giving them content to communicate to the end consumer. What we think what is the next step for us in terms of retail excellence is the focus on the omnicality. So we still believe that the client advancement needs to be the true brand ambassador of the brand. And we are currently testing the KPIs in order to allow them and push them not only to sell to the people that are in store, but leveraging all the levels of the omnicality to give an enhanced client experience.
We think and I will come back to this that linking the world of digital, the work of the navigation, the way people navigate on the website, the way they interact on the social media can clearly give if leverage in the right way without being too intrusive. It can be leveraged by our client advisor. I'm going to show you what the architecture we have in mind for 2018, 2019. And finally, in terms of communication, we want to leverage much more on the digital world, and we want to develop CRM enhanced tool to be able to deliver the superior and integrated services through our device that is more clear. This is our vision on where what we want to achieve and the opening of the Korea market that we are going to manage directly is going to be the pilot for us to integrate this one client vision, the Moncler view of the client worldwide having on one hand what we have already, the Moncler app, the order that people can see already on their uptick.
They already see what has been purchased, which items at which frequency in which store. We want to integrate all the social listening, the in store analytics that we have and also the e commerce behavior of our clients in one tool leveraging on Google Analytics and CRM to be able to first having marketing automation, not only the client advisor pushing information to the client, but having tools that are going to facilitate and improve through data intelligence the way we communicate with the consumer. This should be a way to increase further even further loyalty that we have to deliver and also to look at the clients at 360 degree in this experience also having post sales customer service, not only after sales but also other services that we can provide, improve the way we are doing the omnichannel and finally, giving a super client and telling experience. So this is the vision that we have. This is the challenge that we have to develop this Retail Excellence 2.0.
I thank you for your attention. And we have now 10 minutes break, coffee break before having Luciano coming back on stage. Thank
you.
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Okay. Good morning, everybody, and thank you for coming here today. I'm Luciano Santel, and I'm responsible of all corporate divisions, which include finance, information technology, HR, legal, logistics and supply chain. You all know how important is the machine for the execution. Over the past 2 years, we have invested a lot of money in the organization in order to make the machine more and more solid, stronger and stronger, in order to be ready for the challenges we face.
What we expect from a machine is reliability first, of course, which is very important, essential. But reliability, essential, but it's not enough. In a fast changing world, reliability is not enough. You must be fast, and flexible. Today, we will give you an overview of what we are doing in the organization, where we are, what we plan to do.
We set these 5 focus areas, 5 goals main goals for this year and for the next 2 years. Number 1, supply chain, of course, critical, instrumental, essential to make the dream come true. If you visited, as you did last night, our GEOs building, you know exactly what they mean. And I'm sure you realize and you understand the complexity behind the product you saw, which is not only the complexity to make that product, but also the complexity we face now to make that product on a larger scale and to be ready to deliver that product at the time we want that product to be in the store. Number 2, information technology.
We have invested a lot over the past few information technology. Of course, a critical factor across the board in all the different processes of the company. Number 3, people. Everything is possible with people. Everything becomes very, very difficult, very, very complex if you don't have the right people.
So people are essential for everything we want to do. And our job and I will see you later what we are trying to do to protect this very important asset. Logistics. Logistics is the other phase of the supply chain. As we said before, we have to make the complexity, we have to make the dream come true and then we have to deliver the dream everywhere in the world the same day at the same time.
Obvious, but believe me, not so easy. Last but not least, sustainability. Sustainability is becoming more and more important, an intrinsic and essential component, not of our business only, but of our life. And those in this area, we will show you what we are doing the most important projects. We are going to start with the supply chain.
Head of the supply chain is Francesca Bacci. Francesca joined the company in December of last year, so she has been with the company for just less than 3 months. But she has already realized where and what the areas of improvements are. And she knows our strength, many. Also, our weaknesses, a few.
And I'm sure she will be able to convert weaknesses in opportunities. Before joining Moncler, Francesca worked for 7 years in Valentino. And before Valentino, she spent over 10 years in 20, almost In Prada, where practically we can say she grew up professionally and saw 2 important pillars of the luxury industry. So Francesca, thank you for being here, and please come.
Thank you again, Luciano, and good morning to all of you, ladies and gentlemen. I'm very happy and honored to be here today. And I'm also excited because today is my first Capital Market Day. So I would like to introduce myself again. As Luciano said, I joined this company in December.
I've worked all my life at Luxury Goods Company, and I met many designers. Some of them are here. At the beginning of my career, I worked a lot on collections, on product development and design divisions. And after, I managed production and operations. And I have already faced many critical issues that are related to fast growing companies, companies that need to reshape or engineer their supply chain.
So I think this is very important, and I think this experience gave me the possibility. It was the basis for my deep knowledge of how collections are and should be developed in order to manage and to anticipate all those critical issues that might hinder production deliveries. And now this is more true and very important here at Moncler, where we are facing this milestone evolution of how our collections are created, how we are presenting and delivering them. Quality is really the mantra of our group, and I like this very much. This has always been and will continue to be our main focus on every process, starting from the choice of very good raw materials to an accurate industrialization until production by very selective suppliers, trained and supported by our people.
But this is not enough. Here at Moncler, we have a department which is called quality development and innovation, And it does not report to me nor to Luciano. It reports directly to our Chairman. This department has the mission to help all divisions to continuously look for improvement because this is our DNA. And we will never stop to look for new and innovative ways of operating.
But we were speaking of Moncler evolution. And of course, it is important for the supply chain to evolve and to focus on time to market. So if I have to summarize what I've just been saying, Moncler will continue to deliver the best products with the highest quality standards and innovative design at a planned time, at a very carefully planned time. Therefore, our main goal for the next 4 years are: 1st and foremost, genius 2nd, processes optimization and third, enhance our complementary categories like knitwear, shoes and leather goods and last but not least, Moncler Clinique. Moncler has been very, very strategic with this genius project.
And already, Roberto spoke a lot about it. So I think I believe that you now have a clear idea of what a great effort it was for the supply chain to manage 8 designers and 8 collections at the same time. But Genius is also something more because it goes beyond seasons, and it will have monthly drops into the stores. And this means that the supply chain must fine tune. Supply chain for the supply chain, it will be very important timing and planning of collections.
And of course, when we are planning our briefing of our collections, we have also to plan very carefully and define very carefully the times, the timing when we are going to deliver them, the timing of events, the time for communication, time of windows, of distribution. And you can understand that this will be a very challenging task. Of course, this strict timing dictates now our master calendars, I mean, all the production activities. And with Genius, it will be important to move from a traditional sequential process of activities and for 1, where the activities are carried out at the same time. For example, industrialization of products along with collection development.
But although Moncler is a very powerful machine, I believe the Genius Project approved that, We have also to improve. And we have just launched internally a project which is called supply chain excellence. And to support these changes and to follow these changes, it is important that the supply chain becomes more efficient, more responsive. And of course, this will allow us to reduce time to market. This project will allow to bring integration between all departments and among also among divisions.
It will highlight all the investments needed by IT department in order to support these changes. And also, it will promote best practices and assess lead times. So as far as knitwear shoes and leather goods are concerned, we believe the culture and know how and innovation are the pillars of the supply chain. Nitwear. For Nitwear, we have created in Trabaselige a very beautiful and amazing site of prototyping and production.
And each director is doing a very good job, So I think the path is well praised. For sure, leather goods, we have hired a very experienced technical director, but I think we still have to enhance culture and know how. And of course, we will have to invest in new designers and production managers. Moncler Clinique. Now this is the best part because I love Moncler Clinique.
I've been there about 10 months ago, and I must say this is a very amazing facility. It's our facility in Romania. And I'm not necessarily saying today that this is one of the most beautiful and one of the best facility that you we can find for outerwear and high technical garments. But what is next for Moncler Clinique? Well, we would like we have 2 main projects.
And these projects are we would like Mokula Clinique to become the a technical hub for the whole group. We would like to develop there techniques that will then spread among our core suppliers. At Moncler Clinique, we have already a very important R and D department, and they are already using 3 d patent technology. So that's very interesting. And I think there's another very important project, which is we want to build there a training center for new people that we will hire, people that will have the task of guaranteeing that the quality in our facade will be the same provided by Moncler Clinique.
So I now leave you with this beautiful picture, and I hope you can share our pride for what has been created because I think it's really unique. I thank you very much, and I hope that by now, you will appreciate fully both the beauty and the technicalities of our projects. So I now leave the floor back to Luciano, and thank you again.
Okay. Hi again. Thank you. Thank you, Francesca. Very interesting.
And I mean, within very deep and important words you spent, it's difficult to understand the complexity we face. Okay. So nice picture. Okay. So let's talk now about information technology.
As I said before, I mean, needless to say, how important is information technology, digital, I mean, whatever is going to help us to make things well but faster and in an efficient way. What is our mission? It's to develop solutions that must be secure, reliable and integrated. Secure, reliable and integrated. 3 words that are 3 stones, very important and these are the driver of our strategy.
In this slide, we report only some of the many, many projects in information technology we have in our pipeline. We wanted to present to you only most important projects strictly associated with our business strategy. We have not included some other projects, not to talk about everything we are doing to help Francesca in the supply chain. But also, for example, one project I want to mention that is not in the slide, which is related to one of the strong that we said before, security, is a cybersecurity project that started about 6, 7 months ago. And he's still in progress, very important, very complex, but very, very critical for our future.
Okay. Let's get back to business projects. Some of them 3 of them actually are projects we presented the last time we met at the previous Capital Markets Day. First project is identified Business Intelligence. You may remember that when we met last time, we said that we were planning to implement this project.
Now the project has been not fully, but more or less 70% implemented. It has been implemented under a technology for front end, which is MicroStrategy and the technology for the data warehouse, which is SAP HANA. I mentioned technologies because some of you may be interested in understanding what is behind the wholesale spending. So 2 technologies, 1st in class for front end and for the back end as well. And the rollout will be completed by this year 2018.
Then we have a few projects that are still associated with the retail business, front end and back end. Clienteling, all business information in one device, the device is the iPhone. You know very well and Roberto already explained to you several times in the past, but today too, what Monclian is. Monclian is this application that has been developed in Monclave with all the business information within that device. That device, of course, is connected with the database, which is behind the scenes that is CRM, a customer database under Microsoft Dynamics Technology, where we report all business transactions with our customers.
Not only since 1 year ago, business transactions in our physical stores, but after about June of last year, May of June of last year, we integrated our business transactions with the online transactions that were in the data warehouse of YNATA. So now in the same database and visible and accessible by the same device with the Montlian, we can see all the business history of our clients, but not only. We have also introduced other information within the same device like the possibility to see the availability of the product that you may be looking for. So if the product is not on the shelves, you can see if the product is in the back house or if the product is available in other stores nearby. Everything again with the device on hand by our client advisers.
MONPOST. MONPOST is a project that is under pilot now that is still within the same device, the same iPhone that will permit actually it permits now in the few stores under test to do the checkout and to make the payment. Wallet payment is another piece of the same chain is the possibility that is still under test, but will be rolled out shortly. To accept payments from WeChat or Alipay, for example, needless to say, EchoPay, of course. So this is what we are doing technologically in the store.
But the scenes, the machine is still extremely important. And you may remember that 2 years ago, we said that we were starting a project to implement a retail planning, a demand planning project. This project has been developed under TXT Solutions, which is a technology that was born in Italy. But right now, for the one of you who are familiar with technology has been taken over by an American company a few months ago. So what is retail planning?
Retail planning is everything about how we price our product, how we plan our sales first and then how we plan our collection then, how we plan the assortment we wanted to put in the store, how we allocate the product and then how we replenish or how to replenish the product itself, the best sellers, of course. All these phases of the project, most of them have been implemented. Last 2, certain planning allocations are under construction now. And then also, we are looking at make the auto replenishment system more powerful because auto replenishment started about 1 year ago. We are very happy on how it works, I think.
And Brea, what do you think? And so now because we are even not too happy, we believe that we have to think about something even more powerful. So the toy we like the toy, so we want okay. So last but not least, a project that 2 years ago was not in our pipeline. I mean, we are talking about online.
2 years ago, probably we were at the time to sign the agreement with the YNAP to extend the contract that is still in force. I think that over the past 2 years, we have developed a solid, strong, not yet very strong, but much stronger than before culture in online from the opportunities that the online offers, and this is something that already Roberto covered a lot, but also from the technological point of view. We are working with YNAP, as you know. YNAP has implemented over the past couple of years a very important and complex project of IT transformation. They migrated their platform to IBM platform, which is just to let you know, but I'm sure you do one of the 3, 4 more powerful most powerful IT platform for online.
We, as a pilot, Moncler as a test, started the first last year in June for this conversion. Honestly, transparently, with all of you and we're well enough to with some problems, honestly. But actually, this is the price you have to pay if you wanted to start first. Now we are I mean, the platform is much more solid. And we are happy because, of course, the platform is by far more and more powerful than the previous one, but also it will open I mean, it is opening the door to the omnichannel model.
Omni channel is something that we still have to implement, but all the phases, classic traditional phases of the omni channel has been already started and they are under pilot. I wanted to go through the different transactions. I mean, on delivery is a traditional transaction, so nothing to say about on delivery. Click and collect in store is when you place the order online, but you want to collect the product in the store because you maybe you want to see the product, you want to see if it fits well or whatever. And this is something we are doing in this smaller number of stores under pilot.
Click and reserve is when you're looking for something you can't find online, but you see because of the platform gives you the information that, that product you're looking for is available in a physical store, which may be nearby where you live. So you reserve the product and then you visit the store and you collect the product. So 2 phases of the same coin, the first one you pay upfront, the second one you pay when you take the product in the store. Click from store, very important, something Roberto and I honestly both believe a lot is the possibility to generate online orders into the store. Again, if you visit a store and you can't find something you're looking for or the size, your size is not available with the help, with the assistance of a client advisor, you can place an order online and to have the order delivered in the store itself or at home, return the product in store, exchange the product in store.
So all of these phases are under pilot in a small number of stores, and we expect the rollout in Europe for sure by the end of this year. And one pool inventory we have mentioned, which is another important transaction associated with the multichannel model that has not been evaluated yet because we gave priority to the phases I mentioned before. Single customer view is something that relates to what I said before and what Roberto said in his presentation, so very self explanatory. And this architecture is everything associated with what we are doing together with the Waymap, our information technology platform, their IBM platform and the very complex honestly, very complex integration between the two platforms. Yes, important, I was forgetting to tell you that, by the way, we are spending we are planning to spend about EUR 30,000,000 in CapEx only in the next 3 years.
Okay, now another pillar, another component of what we said at the beginning, the focus areas for the time being for the Mexico made that dream come true. Made that happen. What is our job? Our job is to make I mean, talent is within the DNA of some people. But it is in everyone, in all the people who work with us.
We have a project that is starting shortly in a few weeks, I want to mention, which is among 1 year school with the teachers coming from outside and of course, teachers inside the company. Of course, our management team altogether will contribute to this school. Very, very important, I want to say that in my mind, there is a first phase of something that we have to think even bigger. Something important to say, I'm sure that talking with Roberto, you're familiar with what our MIT project is that stands for managers in training, the possibility, the opportunity we give to our more talented people working in the store, client advisors to become managers, of course, by giving them the opportunity to get trained. Of course, we have to develop the talent in our people, but then we have also to engage them.
And something important project that we have implemented recently is called Mon Voice. Monvoice is not in the bullets, but it's something I wanted to mention. MOBOIS is some kind of a permanent survey we have put in place by which we take we get all of the thoughts, all of the feelings, the suggestions, the objections as well of all our people. And this is very important to make them feel an essential component of the organization. After the survey, we have created this we have activated this group of people that are committed to follow-up the results of this survey.
So we have to develop talent, we have to engage people and then we have to measure their performance and to reward them. And here a couple of comments that I believe are important. The way our performance management system works, of course, is based leadership, vision, capability of execution, everything very important, but also and a higher store is based, of course, on financial results, but not only. Financial results, also, they're very important. To be faster, we need an agile organization.
Agile organization means not many, many people. Let's go ahead, logistics, the future is now. In the slide before, we said that the future starts now, but that to be in the store, to be in the window when they open the door of the store on June 12, 9 o'clock in the morning or 10 o'clock, where we are putting all the quality console in the after sale. This is a project that would implement important, I would say, essential in everything we do, not only here in the company, but also when we go at home. This is something that most important material we use is down, as you know.
And I think you remember, you know already, which is labeled this in all our garments in order to let our customers know that the product that they buy has been solid. And this is not just an instrument of investigation, but is instrumental to increase their awareness their awareness. Proud to be more clear is about mostly what we said before, giving a voice to let you know we are working on a project which is promoted by the United Nations and to support some of the number up to 10. And this is something that, of course, we believe once again is
extremely The first chart, please. Yes, please go on. I don't have the you received a statement yesterday evening. Especially happy to comment these results. The strong double digit growth that we had with part of our sales are happening in quarter 4.
And quarter 4 has been completely in line in terms of growth at plus 17% as the growth that we have had on the yearly basis. A solid growth of the Italian market, both from the wholesale and the retail side. As you know, the most important store that we have in Italy is the one you are some of you are going to see this afternoon in Montinapoli Arne. Montinapoli Arne has been closed for 4 months because of construction. But we closed the year on a positive base also for Montanapolle Arone because the results since the reopening of the with the extending flagship has been really, really good.
So globally, despite the 4 months closing, the results of Monatte Lapu Lion has been positive last year. If we look at the results of Europe that now represent 30% of the total sales, it's a plus 19%, supported by double digit growth in not only in U. K. And France that has been the best performing market, but also in Germany, Austria, Switzerland and Eastern Europe, especially with the opening of the new store in GUM that has been driving strong growth in December this year. We look at the results of APAC.
As you know, APAC for us is 3 region. It's sorry, Asia, it's APAC, Korea and Japan. And we have registered double digit growth in all of these markets, including China and including Hong Kong. They're also with a very strong impact of the opening of our Canton Road store with a plus 20%. And finally, the U.
S. At plus 14%, growing U. S. Americas, mainly U. S.
And Canada, growing double digit at plus 14% and growth that has been both supported by the wholesale business and the retail business, with a slight acceleration in quarter 4 for the Americas market at +15%. I think we can move to the next chart. Here, you see the split revenues between wholesale and retail. The balance between the two channels now is at 25% for wholesale and 75% for retail. I must say as expected for us is we were planning to have this balance between the 2 channels.
At constant exchange rate, plus 10% in wholesale, which is a very strong result that we have been achieving, supported by the strong growth that we have had in with the online wholesaler and the shop in the shop result. Remember what I showed in my previous presentation, the plus 39% comp growth rate that we have had in the shop in the shop. We have had here a strong opening part during the last part of the year, which has helped us to grow double digit in wholesale and a plus 19% in retail. This has been supported by the strong growth in some of the categories, complementary categories, in line with the result of the past 2 years. Trico and Curt and Son growing at 37%, soft accessories also at 37% and shoes growing at 26%, so in line with the growth of the last 2 years.
This growth and this very good comp growth at plus 14% has been basically let's say, what was the outcome of the result that we have had in unit per transaction that grew at more than 4%. Orderpoint transaction that grew at more than 5% and an increased loyalty rate in our store with an increased transformation rate, conversion rate when people are entering the stores. Regarding the development of the retail and the wholesale network, we reached at the end of 2017 201 retail stores with a strong opening strong openings that took place on the last quarter of the year. I'd say if we look at the way we have been opening stores in 2017, it's a little bit unbalanced. Usually, we try to have openings that are a little bit more spread throughout the year, usually targeting to open with the fall winter season in June, July.
For technical reason, like for the opening of Dubai, we were ready in November, but it's just the mall itself that has been switched. So the opening has been switched also. So basically, we had a lot of openings towards the last part of the year, which will of course have a positive effect for the full year 2018. We opened GUM, which was a relocation at in December. We opened 2 stores in Arena Cente Roma.
We opened the store in Chongqing IFS. We opened Firenze Stockholm, which is a new market for us and the 2nd store in Toronto. Regarding the opening of the wholesale, we had 17 openings of wholesale shop in the shop, mono brand and mono brand store towards the end of in the full 2017. 11 took place in quarter 4. Amongst them, the most important ones are 3 airports, Charles De Gaulle, Taipei Airport and Bangkok that are managed in wholesale.
We opened 2 shop in the shop with Groningen and Stuttgart in Germany, Broomindale's in Dubai and then free openings with DFS. Some of them are new countries for us. Oakland, the first store we have in Macau with the Four Seasons and Guam. And finally, 2 stores in North America with all trend through. So globally, the number of wholesale shops that we have for at the end of 2017 is 59.
We believe that we'll be able to open a similar amount of shop in the shop, mono brand store in 2018. And currently, we have secured 15 DOS openings for 2018.
Okay. Thank you, Alberto. This is a pretty dense chart as usual, but the numbers are nice, so I'm sure you will enjoy them. And it's nice also for myself to comment them. Top line, I mean, has already been presented in-depth by Roberto, up 15% at current rates, but 17 percent at constant exchange rates.
And the bottom line with a growth rate of 27 percent, let me jump for a second to the bottom line because the growth of net income is almost double than the growth of the top line. Of course, the EUR 250,000,000 EUR 249,700,000 have been achieved with the help of tax that, as you probably know, you probably remember, we signed at the end mid December an agreement with the tax authority in Italy to obtain the Patent Box benefits. And so Patent Box, together with a penalty, we were required to pay for an old investigation tax authority, provided a net benefit of over about €20,000,000 and this is what made the tax rate solo as compared to last year. But let's go back now to more business metrics. Gross margin, 76.9% against 75.7% of last year.
Of course, as usual, gross margin our gross margin grows because our retail business grows faster than the wholesale business, even if you have seen a minute ago that wholesale last year in 2017 grew very, very nicely, very, very strong, I would say, first time in the last year double digit. But the growth of retail, which delivers a much higher gross margin, as you know, is not the only explanation. All the machine, the retail machine and not only also the wholesale machine has worked very, very efficiently. The inventory management has been very efficient, and we will see that in a second when we will see the net working capital. Inefficient inventory management means as a metric retail metric, a very high sell through.
And the sell through in spring of last year and in this fall, which is ending now but not yet because as Roberto said, we are still below 0 today. Our sell through is very, very high and probably the highest since I don't know ever, but probably for the last I joined the company 5 years ago, so I'm not sure, but you can confirm. So this is another important explanation that I wanted to highlight because this is something very healthy for our business. Another point is that within retail, our regular stores performed very well and better than outlets. And outlets also discounted the product less much less than the year before.
So all of these components put together delivered this amazing gross margin. Amazing also because if you look at the selling expenses, of course, they grew from 30% to 30.6%, but just half of the increase of gross margin. G and A. G and A are substantially in line with last year from 9% to 9.1%. They totally reflect our strategy that has been explained several times to make the organization stronger and to hire the right talented people we need to implement all the projects you know.
Advertising is in line with last year, even higher on a percentage basis than last year. And as an indication for coming years, we believe that we'll still be in the region of 6.7%, but even something higher, up to 7%, as we said the other time 2 years ago when we met, we believe that advertising can go up to 7% more or less. Stock based compensation is the cost, the non cash cost associated with our stock based plans, stock option plans that is expiring and the new performance share plan that is more important in 2017 because of the new performance share plan that was approved in the mid-twenty 16. Net financial results affected negatively affected by FX. And at the end, the income net income I told you before.
And last but not least and still very important, our EBITDA, which was 34.5%. I said last but not least because EBITDA, as you all know, is still a very important metric. But probably next year will not be so important as it is still like it was in the past because you know that there is a new accounting principle that we start in 2019 that will change the way we report our leases. We will not report any longer our rent cost, but we will report as a financial debt our liability coming from all the leases we have signed, which is over €400,000,000 €405,000,000 and as an asset, the right to utilize these leases. That right, that asset will be amortized.
So we will have a huge EBITDA because in our books, we have about R180,000,000 rands. So EBITDA will be higher on these numbers EUR 180,000,000. But of course, the other face of the coin is that we will have a much higher D and A below EBITDA. So having said that, we believe that from now on, EBIT will be the metric all of us as a management team but also in the market should look at more. Okay.
This is the slide about the CapEx, Very simple and nothing particularly different from what we planned, yes, probably more money than what we planned originally because the store in Milan, Montano Napoleone and not only also Canton Road are for the ones who visit the store and you are visiting Mangrapolione this afternoon are really amazing. The other face of the coin is that we spent more than what we planned, but I mean, we are happy. So we spent €72,000,000 but still 6% on our sales like last year. Again, the majority, as you see, have been spent for the retail network. A growing number for the whole sale shopping shop, which is an important project, Robert told you about, and an important portion of this CapEx, about €11,000,000 in what we call corporate.
That is mostly information technology, all the projects we discussed about before. And of course, for next year, I want to give you some indication that CapEx will not be lower because we still have to invest a lot in our business, retail and wholesale and believing with all the projects that we have to implement in information technology, the total number will definitely not be lower than this. Now net working capital. Net working capital, very nice. Let me say too nice.
Please believe me that this number is you are laughing, but you don't believe me. I mean, working capital, 8% is the result of an amazing job that this company has developed. But honestly, we planned 9%, and we ended up with 8%. The difference is about 20,000,000 accounts payable that were not paid at the end of the year because associated are stores that have been opened very late in the year and most of them in December like Stockholm, Florence, whatever. So this €20,000,000 is something that you should take out.
Considering that 9% is in any event a very, very good number And it comes from a very strict, very strong control of inventory for everything I said before. I mean, sell through very, very high at the end. The amount of inventory this year, the same practically exactly the same than the year before with 70% more business and a good control of our credit, which is growing naturally because of the growth of the wholesale business, but also our concession business, which is a retail reported under retail. But we collected the money from department stores the month after. Net financial position, very nice, very happy with the €305,000,000 net cash, which as you see, the real cash is €394,000,000 but we report as a financial debt, not a real financial debt, not a bank with not a debt with the banks, but the financial debt we report with our partners in the joint venture.
So the €67,000,000 plus €20,000,000 €85,000,000 €86,000,000 is most of them a long term debt with partners in Japan and Korea. And talking about Japan, I want to remind you that right now in a few weeks, we will take over 9% of Monclerje Japan. We now own 51% based on the contract that we signed last year, as you may remember. Now we are allowed to buy 9% to go up to 60%. Having said that, cash is good.
And something important I want to highlight is that the board has decided yesterday to propose to the shareholder meeting a substantial significant increase of our dividend payout from 0 point €0.18 to €0.28 which is almost a 60% increase, which is about €70,000,000 €71,000,000 Okay. On balance sheet, honestly, I don't have any comment unless you have questions later. On cash flow statement is some kind of summary of everything we said, very strong cash generation driven by EBITDA, driven by the fact that working capital inject cash instead of absorbing cash. Change in other current is deeply negative. This is a technical point because the benefit the Patent Box benefit I was talking about is not cash in 2017, but will be cash now in 2018.
At the time, we will pay the first payment, the first tax payment. And so having said that, I mean, no other comments again unless you have questions, But very strong cash generation and very strong free cash flow. Okay?
We now can open to the Q and A session, which I already see hands on. First one and the second.
Melanie Fluger at JPMorgan. I have four questions, please. The first one is, if I can go back to Space growth. Space growth appeared to have decelerated in quarter 4 quite meaningfully. Well, I don't know whether the calculations are right, but around 3% on our calculation, 3% to 5%.
So clearly, part of this was a delayed opening. So it reaccelerates into full year 2018. I suppose could you first confirm that we will be on double digit space growth in full year 2018? But then moving forward, in your presentation, you did a huge to the fact that you're opening 10 stores on average versus the fee 2018. So I suspect there is a deceleration in 2019 2020 in the store openings.
You're also referring to outerwear being up high single digit, which also suggests a deceleration in space growth. So I was wondering whether you could confirm whether in 2019 2020, you're factoring in deceleration in space growth and refocus maybe on like for likes given the sharp acceleration you have in like for likes notably driven by your own online. So my first question is on space growth, and it has multiple things in it, sorry. My second question is on shop in shops versus concessions. Why do you choose shop in shops versus concessions?
I was curious. The third question is on inventories. Inventories are running flat year on year. Is this an issue for H1? Like for like, are you running out of stock for the first half of this year?
And my last question, sorry, is on omni channel. If I understand well, you're working hard on a soft omnichannel business in 2018, but behind the scene now, we're also working on inventories being plugged in directly. How long will it take to have a hard omnichannel? Thank you.
Many questions.
Okay. I answered the first question, but I mean, you already gave the right answer. So I just confirm that the reason why our space growth has been lower than what myself honestly have said several times is because we run late in the opening of several stores. Some have been opened late in December, but one, for example, that was in our pipeline in 2017, which is Dubai, will be opened shortly in 2018. So everything should be offset in 2018.
Yes. Maybe to give some additional information. We didn't mention 10 openings per year. We are still mainly on 15 openings per year, both in retail, but also in terms of shop in the shop is what we are targeting, plus another 15 because we want to keep our renovation expansion. And we always look when we need to renovate a store, if there is potential to deploy our ideal format, which is a 200 square meter store.
So I think you can count on low double digit growth in terms of space increase for 2018. The corollary, if you allow me these franchises, of being late with some of the openings is that we are early in the openings of 2018. So some of the delays we have had are helping us and we are planning now to have 4 openings in quarter 1, which we didn't achieve last year. So Dubai Mall will open on the 5th March. We already opened the Incheon Airport in early January.
So I think this we are going to have a more balanced year in 2018 concerning growth space. Regarding your question on the choice between shop in the shop and concession, I think it's the market that is deciding if it's a concession or if it's a shop in the shop. Clearly, Europe, the department store have been open over the last 5 years to convert their business from wholesale into retail. 1 of the last conversion has been done in February this year with the shop in the shop we had at Haros, which was wholesale and we converted it into retail. I think we have almost now completed the transformation.
There will be one left over with Cadewe that is planned for 2019 when they are going to redo the floor. But basically, wholesale, let's say, departments of Europe will be all in concession in a couple of years. It's already more than 90. Regarding the U. S, it's their business model is still to have the brands that are mainly ready to wear into shop in the shop, into wholesale.
We are going to start now the 1st conversion from wholesale into retail with Bloomingdale's in San Francisco. It's a store that is going to be open in July. We are going to close the shop in the shop we are on the upper floor. We are going to open a retail store, concession, ground floor, opposite Louis Vuitton mid of this year. We have also agreements with department store in Canada with Old Friend Food to have already embedded in the contract of the shop in the shop the possibility for us after 2 years if we want to to convert at a predefined condition, the shop in the shop into concession.
So Canada, it's going to move forward. I think U. S. Is still the part of the world where this is going to be more difficult. I hope that this opening with Bloomingdale's now in San Francisco will set the path for some changes.
Other openings in shop in the shops or in wholesale are the one linked to the airports. As you're probably aware of, it's not the brands that are imposing if an airport wants to manage its retail operation in the U. S. Or in shop in the shop, it's the airport deciding. So it's either you embrace and you decide because of the potential, because of the quality of the clientele, because of the quality of the food flow to be present and then it's wholesale.
Or when possible, of course, we prefer to be retail. So in Italy, airports are in retail. For example, we opened in Paris, Charles de Gaulle is with La Garde, it's wholesale. We opened in Qatar, it's also on wholesale. Each time it's possible to be retail, we are retail.
When it's not possible, we go on the wholesale. There is one thing I would like to mention that is important because I think I make the distinction between airports and shop in the shop in your department store. I think if you are in Saks or if you are in with another department with Neiman Marcus in the U. S. And you have a 15, 20 square meter shop in the shop, most of the people are aware that this Shop in the Shop is being managed by the department store.
And it's the rule in the U. S, nobody is surprised. I think that when it's airport's location, the difference for the consumer, they shouldn't see any difference. For him, if it's retail or wholesale, he need to have exactly the same level of service. So not only we are investing in terms of CapEx, which is usually shared investment with the wholesale operator, but we invest in uniforms, we invest in training.
In most of the case, the store manager that is running the airport operation on the wholesale is a Moncler employee because we want that the quality of service is
exactly the same. Okay. Inventory, Melanie, yes, believe me that our inventory level is good. I'm not going to tell you again how happy we are when we run out of stock and how happy is our Chairman when we run out of stock. But seriously, our inventory level is good.
And just to tell you something I have not asked, but I mean, retail business in the 1st 2 months of the year is not suffering at all. It's doing pretty well with our inventory level. Also, you know that right now, with the change of the weather, but we will start shortly with the new season that was not in all in part in the number we reported at the end of the year. So inventory, no problem at all. About omni channel, this is a more complex matter.
I'm not sure, Melanie, that what we are doing is correct to be called soft and what we have decided not to do yet is hard. Hard probably because from the complexity of integration of systems is definitely more complex. But the way we decided, we selected to start with the transactions I told you before is because we looked first at our clients' experience. So we wanted to give priority to the service to our clients. The transaction that is still on the side, it is the so called one pull inventory.
One pull inventory is a very powerful way to make your online business very, very efficient. Very, very efficient means 2 things: minimizing the stock level and maximizing the sales level. About minimizing the stock level, I think that is not our priority. Maximizing sales level, yes, it is an understandable and legitimate priority. But honestly, again, right now, our priority is to offer to our clients the full range of opportunities, online and offline.
And again, this is something we are still in pilot. So I will tell you, I will let you know probably 6, 7 months from now how the progress is evolving, but this is our priority. The 1 pull inventory is something that we will think about later.
Elena Mariani from Morgan Stanley. I've got three questions as well. The first one is again on like for like. You mentioned in the past that you've always budgeted for a mid single digit like for like, and clearly, you were positively surprised by the results you have achieved. How should we think about this going forward, given that clearly the Retail Excellence Program number 2 is going to imply further improvement in your retail KPIs.
And how should we think about pricing in the context of like for like? I mean, your brand momentum is fantastic. So do you see room for price increases or for anything that is going to increase the price mix? 2nd question, going back to online and digital. Clearly,
this is
a big focus for you. And I was very curious to understand a little bit better how dependent you are from YNAP and whether in the long term you could see a scenario where you fully internalize your operations to capture 100% of the economics? And the third question is for Mr. Ruffini. I think Genius is a huge revolution in the way you are doing business.
And talking to some of your managers yesterday, I understood that you first thought about this a long time ago, a few years ago, which I think is impressive given that this is exactly where the market is going now. So I was curious to understand where you find your inspiration, first of all. So where did you find it a few years ago? And thinking about the future, so now Moncler has achieved almost €1,200,000,000 of sales. How large do you think the brand could be in the future without impacting its DNA, its scarcity and exclusivity?
Thank you.
Yes. I mean, like for like, I have to confirm what you said because, again, myself, what they said is written. But I confirm honestly, Elena, that the way we plan our retail business because it's not what we plan for the business, but the way we plan, which is different because we buy product to support a mid single digit growth. If the reality is better, hopefully, as it was evident in last year, of course, we end up, as I said before, with a higher sell through, with the risk that Melanie said to run out of inventory. Honestly, again, notwithstanding the sell through was very high, there was not this risk.
Looking at the future, I think that notwithstanding all the projects, and I will let Roberto to reiterate or to say something more, but I still believe that planning the business at the mid single digit level is safe, okay? And so my opinion, and I think all of us, is that we will continue to plan mid single digit.
Maybe I add something, Helane. I think by it's a prudent approach that has proven to be successful even when we are growing faster than that. The corollary is that you basically improve your sales through and your productivity and your profitability at the end. And in case it will turn the other way around, it's also a safer way to plan. So I think this year all the conditions, weather conditions, climate, everything has helped us to achieve and really overperform is we are probably one of the only brand that is still selling so much fallwinter in mid of February.
And honestly, nobody has a crystal ball to be able to predict it. I think with also a more agile supply chain, we'll be able in the future to be more responsive to the demand of the market. And out of something that has been planned, probably the additional flexibility will allow us in the future to be even more reactive. Regarding the pricing, I think we are currently right positioning all of other markets. We are working in the pricing architecture to harmonize our price even more.
If you remember well, 2015, there was a price gap with Asia that was in Japan twice the price of Italy, where it has now been reduced below 60%. I think we will use the leverage of sometimes price increases to further reduce this gap while maintaining the level of marginality that we have. Of course, in with retail excellence, there is still the focus and we foresee potential to further develop the unit per transaction uplift the pricing and also increasing with the level of UPT, the average basket. So there is a potential to further improve the price mix, but no big price increase because we want to stay attractive for the young generation and we don't want to make the mistake of increasing too much and to be cut from what is going to be the growth engine for the future of the luxury industry.
About our current relation with the YNAP, Ellen, honestly, we don't feel bound or stuck with this relation. We totally agreed with their choice to implement this new technology. As I said before, there are 4 technologies at top, and IBM is one of these. On the other side, okay, first of all, I have also to say that, as you know, with respect to a few years ago, now many activities have already been sourced. And so we are talking about practically right now of information technology infrastructure and the Logistics because customer service, which is still under their responsibility but is in progress to be introduced internally in house.
So all of the activities associated with the relation with the market will be in house. About technology, we are looking at the technology world. Again, there are other technologies we are exploring, IBM, SAP, Oracle, Salesforce, Digital Tech Technology, not so many, but they are all very, very strong. As Roberto said, we are insourcing an online business in Korea at the end of this year or early in 2019. And this will be some kind of test to understand how to run the business by ourselves.
And of course, this is something we do totally transparently with Waymap. They are even helping us because Korea is out of the scope of the contract. So this is something that is very important to develop culture to understand how this world works. And then we will see, honestly, when the contract will expire, we will see what to do.
If I may add something, When we had a discussion with them a couple of years ago and we renegotiated the contract, we left the door open to internalize part of the service they are providing. And we thought and we are still convinced that this is the right choice, that the first things that we need to internalize is the client management. So not only we have merged the database during the second half of twenty seventeen and now have full visibility on how the clients are buying also online. But we have this merged database, and we are now also progressively going to internalize the client service. We started with the Italian market to be followed by European market because it's where we're going to start the omnichannel and then progressively to internalize also the other platform.
So basically the clienteling management and the way we're managing the website, what is visible, We have already an internal studio since 2 years. The visibility of the site, the look and feel is managed by us. Basically, they have the power machine on the back to make it run, but all the important elements that are elements to communication with the end consumer are managed directly by us.
Talking about the strategy, I think we have to go back a little bit in the beginning of our history. When we in 2005, when we bought the company, I think, as you know, the company was very sport with a strong sport attitude. And soon I realized that to have to move from this channel distribution into more, let's say, luxury environment. And soon I decide to work with data design, and we was one of the first company in this industry to make collaboration. And I think only maybe Puma with Gilsander was at the moment.
We did the collaboration with Junio Watanabe, who was the guys from the Gascon Group. Then we worked with Nicolas Ghesquiere and then many, many other until 2,008, 2,009. And at this moment, I've become afraid because we have a lot of success, especially for the young generation. And the macro logo was at the moment very fashionable in our collection. And we decided to change strategy because I think to last in this industry, we have really to have, as I said before, a lot of energy, a lot of energy for different generation.
I move on to the basically fashion show that was not really in our DNA at that moment. But my feeling was really I can reach another crowd, another voice around the world. I did this strategy until basically yesterday, but 1.5 years ago, to answer your question, I feel that the world was really changed. Thanks to the digital. You cannot last with the old strategy.
You really have to think with to talk with customer to client every day, every hours, every week. And thinking and thinking, we build up the strategy we showed you yesterday. I think we don't want to call delivery, but I think we're going to work in project, editorial projects starting from June that is including collection, excluding delivery, but it's not only this. There really is something to, again, talk with the client, given energy to market, increased traffic in our stores and demonstrate to the world that we are our strategy is on the market and especially for our kind of brand. The future is I don't know.
The future is first, we just start this strategy. I think I quite trust that we can develop this in the right way. And I feel it's the right solution on this craft for this for our craft at least. Let's see. I think we have many things to do for sure.
I will never be try scarcity, the DNA of the brand. The value, you know, well, for me, they are very important. And but we try to do our best.
Luca?
Thank you very much. Luca Solca from Exane BNP Paribas. At the risk of stating the obvious, I was very impressed by your genius project. Newness is key in driving organic growth and pushing out branch realization. I think you're doubling up and coming to the fore with a new innovation strategy that is probably second to none in the industry.
Having said that, have you how do you anticipate the operational implications of this newness? Do you anticipate that you will have a higher number of SKUs? And as a consequence of that, could the very high full price sell through that you're experiencing today be marginally reduced? And is that at all an issue as on top of the challenges that you were referring to of coordinating deliveries more accurately to the store. Looking at your P and L, another line that I thought was possibly even too good is the achieved gross margin.
I can only imagine what the initial gross margin, if you buy at full price, could be, but I would risk to say that it's probably above 90%. How do you see that? And how do you think about that versus perceived consumer value considering the increased competition you have in your space? A point on M and A, Moncler is doing so well that I've been hearing from a number of corners that there are fantasies about Moncler becoming an aggregator and building a conglomerate. I don't believe those, but I just want to hear what you say about that.
And last but not least, one of your peers has secured direct control or will be securing direct control of YNAP. How do
you feel
about others using the data and the transaction data that you produce with YNAP online?
Okay. About your first question, Luca. No, the answer is no. Of course, I mean, behind the complexity, there is other complexity. And your concern is understandable.
But honestly, the way we plan our collections, we look very closely and strictly at the number of SKUs we want to develop. And so altogether, even before starting the project, we have a very strict briefing documents on which we put a piece of paper exactly for each category and for each line, including Genius, how many SKUs we wanted to develop. Also, something important to say, probably to say again, because Roberto already said that, but the Genius is a style communication project. But we don't aim to develop enormous volumes with Genius. About your second question, gross margin, it's not exactly 90%.
What we normally say is that for the retail business, it delivers 80%, which because it includes outlet, regular stores, of course, is higher than 80%, but not as much as what you said. I can tell you that it's more it's closer to 85 percent in an event, 84%, 85%, which is still a respectable gross margin.
About And maybe just one element because you talked about perceived value, Luca. And I think perceived value, it's a mix of different elements. We, of course, have you have the visibility on the margin. And of course, this is creating a bias on the way you look at the different product. But I think the end consumer is much more looking at the perceived value with different terms, the level of creativity, the level of desirability of the product, the level of quality, how the product is made, how is it manufactured, is it a sustainable product.
I think these are criteria that more and more relevant for the end consumers. And of course, the margin, it's a nice, let's say, consequence of all the work that has been done. But as you have seen, Genius is really a project that is focusing on the creativity and creating the visibility of the brand. As mentioned by Luciano, when we did the briefing with the merchandising team regarding the collection, we had exactly that in mind. Developing the creativity, not having too much depth in what we are selling.
Basically, we'd like ideally to be sold out with each one of the collection. Let's see if by the design we are going to create the buzz around the brand we are going to be able to achieve that. But I wouldn't be too scared. I think we have been planning on Genius with the same cautious approach that we have when we plan for the main collection.
Talking about M and A. First of all, I don't know which other company could be part of this group. I read as well on the newspaper a few weeks ago. It's not honestly on our plan to ago. It's not honestly on our plan today.
I feel we have a lot of things to do. I think Moncler have a strong potential to have with new face to the market and talk with every generation means I feel I want to be concentrate for the future. Having said that, I don't see any opportunity. Maybe it becomes something very interesting and let's
see.
Okay. We'll start here and then
Thanks. It's John Guy from MainFirst. Three questions, please. With regards to price mix uplift, Roberto, you mentioned that you weren't going to raise prices, but there are opportunities, or too much on the prices, but certainly price mix emphasis. When you think about the increased product diversification that Moncler Genius brings to the table, I think reducing outerwear, probably driving up the Grenada.
And in addition, historically, when you've done collaborations, you've also driven a higher price mix as well through your collaborations. So maybe there's some support there. My second question around when you're working with these designers, what are the financial terms or if there's anything in those lines? And when we think about the very good uplift in sales per square meter and your push more into travel retail, would €45,000 per square meter be too high by 2020? Thanks.
It's a joke. 45. But 1 not.
Or 1 not 50. Just on the pricemix. It's true that when we usually plan for collaboration, the pricemix is price level is slightly higher than the main collection. This being said, as we have seen with the fragment collection, which is going to be the one with the largest volume, we try to really stay attractive for the new generation. So I don't foresee a big uplift compared to what we had with Gambleau, Gambleau, but clearly creating much more excitement internally.
While I do foresee a price lift is the category that we have started to develop 3, 4 years ago in more intense way, the soft accessories, the knitwear, the Trico, the shoes. Because when you develop the culture, when you develop the legitimacy in that category, you have a pricing power that is much higher. And as we are still really in the infancy of the development of those category, I think there is strong potential there to grow in terms of price mix. Regarding the development of travel retail and the dream figure, your dream figure, not ours, on the sales productivity. I think we as we usually say, we do everything to protect the current level of productivity per square meter.
We have been proving on the past that by doing the right things, there was a potential uplift on this. Honestly, to tell you where we are going to land, it's a little bit too early. What we see is that for stores with the average square meter that we are targeting, these 200 square meter and also with travel retail, the level of productivity is slightly higher. So but this will also be a consequence on how the market is going to move. So but I still think that with retail excellence, we have started we are halfway.
We have started to scratch the surface in terms of potential elevation of UPT and sales per transaction. And also think that the omnichannel that we are going now to embrace with the team on the floor, there is another potential uplift in the market. Luciano mentioned the Click From Store. We both strongly believe in it because this is, for me, the way to make out of every single small store that we have and remind you that having an average of 130 square meter per store, 135, We still have half of our store below 100 square meter. I think that this is giving the possibility to those stores that have, by essence, limited amount of outerwear and limited assortment, the capability to enlarge and become a small flagship store.
So I think that if this is properly executed and it will take some time for the route, I think there I foresee a potential for another growth.
Your question about the designer, how we pay I mean, normally, we pay them based on a fixed amount. In some cases, there is a variable component. But I would say that majority is fixed also because I'm talking of course, we're talking about the big designers behind Genius. Also because, again, Genius is not a project to develop high volumes. So quality is by far more important than quantity.
There was a question. Yes. Here.
Thanks. Hi. Piral D'Daniel from RBC. Three questions, please. So on internal production, I think that you now produce 20% of your volumes internally based on a slide you shared earlier.
Could you give us an update as to whether efficiencies are in line with your external suppliers? So you're now producing a similar level of cost and where that internal percentage could reach in the future is the potential to continue to increase that and to reduce your reliance on external suppliers over time? Secondly, on Moncler Genius, does moving to specific date drops such as the 12th June or 2 here or there, is that significant in the future? And finally, on your shop in shop opening guidance, I think you've moved from the U. S.
To ensure that you try and push as much product at full price. Are there terms in the contract to minimize markdown?
Yes. About your first question, actually something is better to clarify. We aim to produce up to 20%. We are not producing now 20 percent. We are in the region of 15%, but the percent keeps growing.
So we may go over 20%. It may be higher than 20%, but we still believe that it's important for many reasons, including flexibility to have also a network of high end, high quality factories to work with. Also because each factory may have a different specialization on different specific products. And so pretending to do everything on yourself would not be correct, honestly. So the strategy is to produce up to 20%, maybe 25%, but again, not much more than that.
About efficiency, efficiency, productivity, let's start from quality first because the project was a quality project first. And I think that, as Francesca said before, this is now the best factory for Alta. We're in the I don't know, in Europe, in the world, I don't know, but it's a very, very high end factory with very high quality of the products that they make. About the productivity, productivity is getting better. We have other partners that are delivering better efficiency, honestly.
I can tell you that we don't care because we do care, but it's something that will come step by step.
Just on answer maybe the question on Genius. I think the flexibility you were referring to, for example, the fact of being able still now to sell for winter because the weather condition, this will remain. It has nothing to do with the Genius project. I think the main collection will remain. We are going to continue like we are currently doing when there is the change of season to manage the change of season store by store, door by door.
I think the Genius project and the date of drop has another objective. The objective is to create desire, to create expectation, to be able to leverage it at CRM level, to digitally able to leverage on the online and create expectation and desire for the new collection to arrive. I think this is another way and also to create content to create the buzz related to leverage. When you don't know exactly when the collection is about to arrive in the store, if the time frame is 2 to 3 weeks, what's the reason for you to go and to be the 1st to be able to buy it? I think it's due to different purpose.
We are not less flexible in the way we push the different collection and especially in the change of season. We are just creating more desire and communicate it in a different way with the end consumer regarding the most visible part and attractive part of the collection. Regarding the shop in the shop, I think the point regarding the markdowns in wholesale, This is not different if you have a shop in the shop or if you don't have a shop in the shop. I think it's just the opposite. I think by creating a more bound and stronger collaboration with the department store by co investing in building shop in the shop, having more quality in the buying because of course what is related to the shop in the shop, which is bringing everything under one roof with the Moncler branding is that we have much more interaction with the department.
We have sales advisers that are dedicated to the area and so on. It's just the opposite. Usually what we have seen in the past 2 years, which have been years of test in terms of shop in the shop is that we improve the sales through. We have more quality. We are not only selling permanent product, but we have much more novelties.
So it's much more reflecting and qualitative compared to being present in a multi brand area where the sales is less supported, where we have people that don't have the technical knowledge, the product knowledge that they don't know the story about the brand. The risk there of having a low level of sales is higher. And we say level of sales is lower means higher risk in terms of markdowns. So I think this shop in the shop project that took some time to develop because they needed to be convinced and so on, but has really changing the paradigm of collaboration that we have with department store, especially in the U. S.
And that is helping the brand to grow in an environment in the U. S. That is currently not doing so well. So we are probably one of the best top 2, 3, not number 1 most of the time, performing brands that they have in the ready to wear department.
Fred Seperes from UBS. Two questions. I think there was some there's a very good detail slide from you, Roberto, on how loyalty has been improving across a number of metrics in the business. Obviously, a higher repurchase rate plays a bit into spring summer, which perhaps we haven't discussed as much.
Obviously, we're quite
a way away from seeing what Moncler Genius might mean for springsummer next year when it could perhaps come in. But just very interested to get your updated thoughts on how much you hope spring summer could be contributing within this business by 2020. And perhaps linked to that, how you see the balance between energizing existing customers versus attracting new customers? We're moving into a phase where loyalizing the customer base is becoming a much more important driver for the like for likes. That will be the first question.
The second question was around Korea. Since the joint venture with Shinsegae a couple of years back, there's been this focus on elevating from quite a low iconic positioning to a more developed positioning more in line with the rest of the world. How is the journey on that going? How close are we to seeing Moncler expand outside Seoul and developing the Korea business to a more aligned global view?
I will start maybe, Fred, with the loyalty and the weight of springsummer. First, on the loyalty, I think we need to work on both elements, both on the recruitment, making the brand attractive. And one of the objective of Genius is not only to serve our existing client. You have seen how different the collection is reaching on some part of the Genius collection, the more feminine part. Some other is more streets wear, something is more for younger people.
We have also product for, let's say, for mature more mature generation. I think the objective there is really, first to please our existing customer, but most importantly to be a driver also of new consumers and attract new consumers into Moncler. Then all the activity that we are currently developing in terms of clienteling and so on, I think for the global vision, this one client data also getting input from the existing information you have and the way they are browsing the digital world and so on is going to further enhance the client experience. I don't want this experience to become intrusive, but I think there are now levers to deliver a more qualitative client experience with the more information that we have in the past. I think the things needs to be balanced.
To tell you if it's 60% recruitment, 40 percent loyalty or the other way around, I don't think it's really important as long as we continue to improve on our retail KPIs and retention rates than if it's going to be 60%, 70%, I don't think it's what is the most important thing. Regarding the weight of the spring summer, I think it's you need always to think that as Remo was mentioning, people are going in the direction of no season. And the fact also of bringing the men and the women collection together, the fact of desosionalizing and having a monthly drop is something that is becoming less relevant. We have also been the first one to develop an offer with the long season of down jacket for the summer. This is something that is working extremely well.
So we don't think really in terms of springsummerfallwinter, but more proposing items to the end consumer that are relevant whatever the timing of the year is. And Genius is something that is going to help us on this and also the development of the new categories. The current business, so as it was integrated a couple of years ago, has been developing really well, It's still a market that is mainly for us a local market. We don't have a lot of travel retail. We now recently opened the 2 stores.
1 is in January in Cheyenne at the airport and we have one duty free store that opened early 2017. The 3 of them are doing extremely well. I foresee a potential for development in the travel on the travel retail side and the duty free business because I think for most of the luxury brands in Korea, 40% of the business is a beauty free business. For us, it's less than 10%. So there is where I foresee potential growth.
And also, it's a market where we have started to develop the Enfant business and the shop in the shop. And it's one of the most responsive market that we have there. So also I see. It is a market that has been growing completely in line with the growth rate that we have shown for Asia Pacific, so for Asia. So a growth rate that was above 20% in 2017.
Mario Ortelli of Bernstein. If I may, three questions. The first one is about CRM. You build up a strong infrastructure with many data about your customer. Can you please tell us if the perception among customer of the Moncler brand attributes are the same?
Or you have got quite a different perception about of Moncler among customer segment? And if there is any specific customer segment in which you are not satisfied of the current perception and you want to address them? The second one is about the use of cash. Your company is highly cash generative in the future. How you want to price your shareholder?
More dividends, extraordinary dividend buybacks? The last one, Mr. Ruffin, is about the future. You were always a visionary. Let's talk about fashion in 10 years.
What excites you the most the opportunity of do co design with the customer, 3 d printing, collaborative work with digital creators. Try to share a bit with us what makes you really, really excited. Thank you.
Mario, thank you for the easy question on the CRM. Of course, we have started to segment. First, we have started to gather data that we honestly didn't have. We had mainly purchasing behavior data, what people were buying, not so much about their behavior. And I think this is something that we are still enriching.
And clearly, what is going to merge of the database with YNAP is going to help us to even better understand the needs of our consumers. We have segmented on our database on criteria of spending, but also behaviors, so many categories they are buying. And clearly, there is something quite obvious, is that the more loyal client that we have, the one with the higher spending power, are the one that are buying across categories and not only buying outerwear. So clearly, one of the push and if you're saying which part of the segment are you less happy is the one that are stopping to buy. So is but this is not for only for Moncler.
This is for all databases. So clearly, there is a focus for us on we call them sleepers. So these are the clients that have not been buying Moncler for the last 6 months. And there is specific action plan that have been now deployed in all markets, in all stores to awake the sleeping consumers. Sleeper.
So there, we try to reactivate them through content, in store activation, sending them information and so on. And I must say, if I look at the improvement of the loyalty rate, it's something that is working. As mentioned, we are currently because we finished the rollout of the Mont Clion app into different store worldwide just in August last year. So we have basically some of them, they are doing that since more than 1 year. Some others is less than 6 months.
So we need now time to really have the full fledged effect of this. But I think the improvement we have had in the loyalty rate is showing that there is potential. We are currently managing directly influencing 10% of the database. We want to grow it to 20% at the end of 2019, having an impact on 1 third, 40 percent of the business. If successful and with the help of automated CRM data analytics, I think we can, in the future, 20 nineteen-twenty, have an impact on the rest of the database.
We do it step by step.
About cash, I hope you appreciated that we increased our payout from €0.18 to €0.28 almost 60%. This is what we believe we will be doing in the future to reward our investors. About buyback, our plan is to implement buyback plans only to the extent we need shares to deliver to our employees, to our managers. And so not like, let me say, speculative instrument to give back cash to the market. So dividend, I mean, we will try dividend depending on, of course, the important projects we still have ahead and the cash generation that hopefully should it still be very healthy like it was in 2017.
Talk about the future. Our jingle last week was the future start now. And it's not easy to say happen in the future. For sure, as you mentioned, 3 d. 3 d will be something very interesting.
It's already on the table. I think it will be very strong for especially for shoes. I don't know for our product, we can work on this technology, but we already work on that. We really on this to understand what's going on. I don't think we can make 3 d product in the stores.
I think we can use 3 d in the factory to do better quality, better technology and better production. Furthermore, you asked me about the different energy, different designer is in our pipeline. We start already this strategy maybe too early, more or less 7, 8 years ago. We asked Pharrell Williams, that was a singer that was not very popular at that moment, to design our eyes wear collection. The jacket collection was marketing wise was very, very successful.
My thing for, as I say, the Genius building, the doors are open. And I feel to attract different people not come from our industry, they come from music, from art, could be a very interesting approach. We started working already.
Omar, I think sorry, Omar, I couldn't see you from here.
It's Omar Saad from Evercore ISI. I have two questions. The first one is about the category, the luxury outerwear category for lack of a better term. It's experienced pretty explosive growth over the last 10 years in a lot of ways led by Moncler. How do you think about the evolution of the category?
Do you see that kind of strong growth globally ahead? And from a competitive standpoint, given the profitability and the growth and the visibility of the category around the industry? Are you seeing new entrants and new competitors emerge? That's my first question. The second question I wanted to ask you about marketing in the digital era essentially.
I mean, digital has obviously been a very prominent theme throughout the last couple of days, something the company is very focused on. But maybe you could talk about your view on the cost of marketing and advertising and building a brand in the digital era, the efficacy of digital technologies for marketing social media and the returns on investment and how attractive it
of your question, honestly, I don't feel too many competitors on the market. Everybody say that the Parca guys came from Canada is our major competitor. I feel they are very good company, but I don't think they compete with us. They are very functional. They are very not designing, very, what I say, premium on North Face.
This is my feeling since the beginning when kind of got the goose and the other brands start to be on the market. Honestly, I feel our competitor is all the good brand. They have a good outerwear. And but honestly, one specific brand, I don't feel compete with us. We have for sure to be careful.
I think the last show was a lot of good outerwear, starting from Prada. I think the collections men's and women, they show as again, Brada Sport, let's say, Luna Rossa. We have to be careful. But we feel that with new strategy, with new ideas, with new technology to have really a strong power in outerwear, especially in outerwear.
Regarding your question on digital, I think the year the paradigm is changing in the sense that if 5 years ago most of the media spend was on the media buying and less on the creativity, I think here we see really a shift where you need to come and invest more on the content side because for the timing, still even if it's increasing rapidly, the cost of the media buying on digital is still lower than traditional media. I think the shift needs to happen because on traditional magazines, you have less and less people, especially new generation. They think mobile. They look mobile. They don't go on print anymore.
I think outdoor advertising is still something that is relevant because it's a message that is very visible. And it's a mix of the 2. This is the direction to go. Regarding your question on the influencer, I think what we have been noticed and we don't have yet a real metrics on return on investments, but you need to find a good mix between influencer that have a lot of follower that are there for the reach and then having a set of what we call micro influencer, which are people that have between 200,000 to 30,000 followers that are the one that are generating much more purchasing behavior. What we have been measuring so far is that the difference in influencing the purchasing behavior between a micro influencer and an influencer is 1 to 7.
Usually, they are in terms of advocacy much more relevant if they are talking to a smaller community than the big ones. But of course, if you have 2,000,000, 10,000,000 followers, your reach is so big that, again, you generate also. And I think it's the mix in finding the influencer that is not going to all brands, but has a focus that where you can really interact and link and that is a fan of the brand that you can become credible. Just looking at influencer that are one day with us, the other day with our neighbor Fendi and then going, I think it's becoming, in my view, less relevant for the end consumer. It's the mix between the two that is the current future.
It may change as this world is changing so fast. It may change in a couple of years' time. But currently, I think this is the right strategy to go.
It's Pana Carbone from Equitasim. Three quick questions. The first one is on the supply chain. Actually, apparently, we came all here a bit worried about this new Genius project, and you seem since that quite, I wouldn't say, relaxed, but confident, let's say, because of the way you planned everything in advance, because of not so huge volumes involved. So I would change the focus to your usual work for the supply chain.
And how are you improving, in particular, on the side of auto replenishment? And if any, with the idea of producing the seasonal items in season. So if you can share with us where are you on these two directions, on these two path, let's say, in particular, because we understand that the possibility to exceed the mid single digit same store sales growth also comes from the auto replenishment opportunity. And so I just wanted to understand whether the surprise we have seen is also because you made big progress in this respect or this is also your simple buffer you have usually with the auto replenishment option. Then on the shoe category, you seem having hired a new technical director.
I would like to know a bit more on what you are doing on the supply side, on the prototyping side for this category because this was one of your aim to be to replicate at least what you did with Nitur? So where are we also on this side? And lastly, quantitative and quick question on CapEx. We understood the floor, let's say, but not the maximum level.
Okay. About your first question, Paola, first of all, believe me that we are not relaxed. But we are confident, you are correct. We are confident because we believe to know exactly how to fix our complexity. Also, I think that Francesca, as I said before, has been with the company for a few weeks.
But believe me, she has already understood very well how we should work differently and what she said is the key. We have to anticipate problems better and more than what we used to do in the past. So it's easy to say, much more difficult to do, but I think that we will make it. About auto replenishment. Auto replenishment, as you know, is for the time being something that does not involve the production.
It involves the production for a small percent, which is still about 8% of what we call permanent products, which are not seasonal products. So we keep producing permanent products all the year long based on the market demand. So this works but has not been implemented yet on seasonal product because first, we have the priority to make the changes I told you before. Okay. Shouza, yes, sorry.
I mean, you may remember what we said that we wanted to do a few years ago in And knitwear, a few years ago, not many, was honestly not at the level of our brand image. At that time, we realized that we had to bring in house culture. So we invested in a small production unit, but even more important, we hired a responsible Director of in 2, 3 years, we have developed a pretty good culture in nature. And what is important, we have developed a good credibility with our customers. So know how the deep knowledge of the product over the materials in this case of the yarns makes the difference.
In shoes, I think that we have and we are doing exactly the same we did for knit many years ago for outerwear. And so first step has been to get this person who is a very, very expert person, technically expert in the show technicalities. Together with this person and together with Francesca, we will create a team of technical people. And at the end, we wanted to develop a culture also because shoes have specific requirements that are more critical than outerwear or knitwear because if the size of the fitting is not correct, you can't wear the shoe. And so shoe is a difficult animal, but we are confident, really confident that by doing this step by step, we will build the culture we need to get then the credibility.
CapEx, the floor, when you said the presentation not less than.
Yes. CapEx, I mean, for sure not less than the EUR 70,000,000. I think that looking at the percent, you should think still think about of a 6%. Even if right now, to be totally transparent with you, the CapEx we have in our pipeline are a little bit lower. But based on our experience, I'm sure that if we get if he gets opportunities along the road, we will get it.
And so for the time being, I will suggest you to take 6%.
Okay. I think we have a couple of more. There was Plavin and I have there. Okay. Let's start there.
Yes. Annorbie Smith from HSBC. Is it possible to know how many stores do you have in China? And out of the 15 store plan opening plan per annum, do you plan to open in Mainland China? And my second question is about the tax rate, what we should expect for full year 'eighteen.
Is it possible to have a rough guidance about the tax rate for this year? Thank you.
Very simple answer. We have currently 29 stores in China. We have planned to open in April 3 stores in Xian, 1 woman, 1 man and 1 woman. I think you can count probably on 1 to 2 openings per year on the next 3 years. We don't want to reach the level of some of the luxury brands that have 50, 60 stores, but I think some additional stores, we have potential for that.
And we're also working on the refurbishment and enlargement of some of our shops. One of our dream is to have one day also a flagship store in China. We are currently looking at this. It's in the 3 year plan. We hope to be able to secure the right locations for it.
About the tax rate and lower tax rate for 2018 2019 will be slightly, slightly higher than 2017. I can tell you around 27% because we will still have the benefit of Patent Box, but not as much as in 2017 because we got also the 2 years before. Important to say that in 2020, this benefit will expire. And so in 2020, we will get back to the 31%, which was our old guidance before Patent Box.
Flavio?
Thank you. It's almost lunchtime, so I'll keep it quick. It's Flavio Chedida from Jefferies. So compared to two questions really. Compared to, say, 3, 4 years ago, are you still having to chase the issue of fakes on the market, which of course goes hand in hand with you being successful, potentially could be an issue with the whole Genius project coming up?
And the other thing is, I do ask brands this recently, if you keep an eye on the secondhand market, so the pre worn market, I just had a quick look at the 2 main platforms, and I'm finding almost 18,000 units SKUs for Moncler. So is this something which you as a brand, but you can't control it, but you are you getting involved? Is that something that you're monitoring? Is that something that you plan to collaborate in any way? Because of course, the issue is in a year's time, it might be 50,000 units that you'll find.
Thank you.
About fake, I mean, fake is a big issue, is a bigger problem. You know that recently Gucci and Diesel have tried to fight with the ironic way the fake industry because unfortunately, this is the case. Fake is an industry. I don't think that Genius, honestly, is going to worsen the situation also because you have seen that, that kind of product is very, very complex, very, very particular. But the brand itself is very, very hot more and more.
And Sofieke is never ending battle. We have a department, as you probably know, that is spending all the time all the day longer to close online sites. But as you close one, another one comes up. We have agreements also with all the most important online players from Amazon to Alibaba together with the European Union to fight the counterfeiting. But again, it is a problem.
Regarding your second question, Flavio, you were referring to platforms like Farfetch, right? No? 2nd hand platform. Honestly, this is something that we are not currently monitoring. We know that there is a secondhand market, but this is relatively small.
It's not something we are much more in investigating on the reselling platform like Farfetch and collaborating with them in order to ensure that the correct your pricing is being managed. And we're also working very hard with our wholesale partner to develop highest level of sales force possible in order to avoid markdowns on product that are being resold by current wholesaler. I think this is a new phenomenon that has been arising that has not been pointed out by our consumers as a concern. And to tell you the truth for the time being, I don't really see what concrete action you could take on the secondary end market. That is something that there is no rules and recommendation to follow this market.
Is something that we'll have probably to have a closer look in the future. Of course, the more qualitative your product is, the longer its lifetime, the more risk you have, which are a very fashionable product that is going out of date after one season is less of an issue.
Okay.
The very last one, very, very short question, please.
You. I'll make them very short. Ashley Wallace from Bank of America. So three questions from me. First of all, back on Genius, but they're quick, I promise.
So just on Genius, obviously, the collaboration on frequency of drops is going to have a very positive impact on traffic and just branded diarability. But can you maybe give us some color on the economics of Genius? So maybe the volume of the 8 collections as a percentage of the group or what percentage of space contribution they'll take up? Secondly, just online, earlier you put up a chart which showed that online penetration in the Luxury market is 9%. Can you maybe give us some color of where Moncler sits relative to that?
And then also how online profitability sits relative to the rest of the group? And then lastly, a housekeeping question, corresponding uplift in D and A. And you've previously spoken about EBITDA margins being broadly stable. Now that you're going to talk to EBIT margin
As you rightly mentioned, Genius is more a new approach to consumer, a new way to communicate, more than a project where we have been looking at making it a big volume maker and turnover maker from the beginning. I think just we want the opposite to play generating both from our team that has been buying the collection in January. There was a lot of enthusiasm from all the region, most especially from the Japanese, one that were probably the one the most scared because they were with the Italian market, the biggest designer, especially with fragment has been completely reassuring them. So there we have been positively surprised by the internal demand of our buyers. And secondly, we have been meeting now 350 wholesaler over the past 5 days, indigenous premises, making appointments in these 5 days.
And there also, the demand has been bigger than what we had initially planned. So the volumes, instead of giving you a bracket on how much is represent on the total sales, I will maybe make the comparison with what was the weight of Gambleau, Gam Rouge, is going to be the 1st season slightly higher than what we had for Gam. I think the potential is probably much bigger. But as I mentioned, we don't want to it's not a project to push sales. It's a project to increase desirability of the brand and to be able to communicate and interact with the client on a weekly basis.
So I think online for the luxury sector is including cosmetics. I think if you look at it, and Luca is probably even more informed than I am on the penetration for the fashion industry, but I think it's more around 7%. And we are currently around 7.5%. So we are in line with the performance of the VAT in 2015. So we see tremendous potential on this segment.
And with the omni channel, I think this will further accelerate.
Yes. About the question on leases, I made it simple before because of the technicality behind this accounting principle is much more complex. But I mean, we do not expect a material impact at the EBIT level because we expect the EUR 180,000,000 rent to move from the line rent to the line D and A. It will be probably a little bit less because there is an actualization impact that will move a portion of this cost below EBIT in the financials, but I don't think that will be material. Talking about metrics, of course, EBITDA will not be any longer, not for us, but for everyone, significant and meaningful.
So that's why I think that all the market and all the companies will look more at EBIT. EBIT was at 28.6 percent last year, in line with the year before, which is honestly a very high end operating income. For the future, we don't give any indication. But of course, everything which is included in our strategy is expected to deliver strong results on our operating margins. But believe me, that number is already very, very good number.
Okay. I