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SUPPLY CHAIN PROFILE

As at year-end 2016, approximately 4121 suppliers were involved in the manufacture of Moncler’s products. They are grouped into four categories: raw materials, façon, finished products, and services.

Raw material suppliers mainly provide fabrics, down, leathers, accessory components (buttons, zips, ribbons, elastics, etc.), and furs. Fabrics are sourced primarily from Japan and Italy. Suppliers of accessory components are almost exclusively Italian. Furs are sourced primarily in Europe, while down is purchased from European and North American suppliers with supply chains in both Europe and Asia.
Façon manufacturers are specialist garment manufacturers with high technical know-how that Moncler supplies with raw materials and entrusts with the manufacture of its final products. The production process is carefully monito- red by Moncler experts, who verify compliance with required standards through a strict methodology and weekly on-site inspections. This process applies to jackets, trousers, skirts, dresses, all knitwear, and, as of 2016, to part of adult cut-and-sew knitwear. Most of these suppliers are located in Eastern Europe, where a long manufacturing tradition guarantees high technical expertise and suitable production capacity.

Finished product suppliers manufacture products on behalf of Moncler based on the technical designs received, sourcing the raw materials themselves as per Moncler standards, with the exception of strategic materials such as down, nylon, and logoed materials, which are provided directly by the Company. These suppliers and Moncler’s experts interact at all stages of the manufacturing process, which is carefully supervised by the latter to ensure final products meet the high quality standards required. Cut-and-sew knitwear (especially T-shirts and polo shirts), hats, scarves, gloves, footwear, handbags, and small leather goods are mainly produced through these suppliers. Cut-and-sew product suppliers are vertically integrated; most are located in Europe, while a small part is in Turkey. Soft accessories suppliers (hats, gloves, and scarves) are mostly Italian with a high level of specific know-how, while footwear and handbags are produced by European suppliers, most of which are Italian.
Service suppliers assist Moncler in pattern making and quality control processes, and are mainly located near the Company itself. If possible, the Group avails itself of local suppliers situated near its main offices, which simplifies logistics and generates income and jobs across the local communities in which the Company operates.

Over the years, Moncler has rationalised its supply chain by progressively reducing the number of suppliers, in an effort to gain greater control over supply and develop stronger and more profitable synergies and partnerships with those who share the Group’s values and expectations, also in terms of environmental and social standards.
The majority of Moncler’s suppliers (about 95%) are located2 in EMEA, primarily in Italy.
Moncler diversifies its purchasing expenditure across a number of partners so as to avoid dependency on any given supplier, which would pose a potential business risk. The Company’s top 50 suppliers account for about 70% of the total value of orders. The Group is careful to promptly identify any critical situations with the potential to cause supply disruption, addressing them accordingly so as to mitigate any consequences and thus ensure continuity.

SUPPLIERS BY CATEGORY3
SUPPLIERS BY GEOGRAPHIC AREA4
VALUE OF ORDERS BY GEOGRAPHIC AREA

NOTES

1 Excluding prototype and pattern making suppliers, and suppliers with sales orders of less than 1,000 euros per year.

2, 4 For façon manufacturers and nished product suppliers, the geographic location corresponds to the country the product was ‘Made in’; for service and raw material suppliers, it corresponds to the country in which the supplier’s head of ce is registered.

3 Percentage calculated on the total number of suppliers.