Monnalisa Cuts Its Store Count in Half, but Still Loses 7 Million: Is This a Retreat or a Revival?

Monnalisa is one of the first companies in the children's apparel industry to adopt a consistent growth strategy by opening single-brand retail locations—both company-owned and wholesale—and has built up a wealth of knowledge and expertise in managing single-brand stores.

In two years, the company’s direct retail network has shrunk from 51 to 24 stores. The downsizing has improved operations, but the financial statements still show a loss of 7 million. The challenge now is to maintain visibility and boost revenue through a more selective store presence.

In 2025, Monnalisa closed twelve stores and increased EBITDA by 38.5%, from 1.814 to 2.513 million euros. In the same fiscal year, revenue fell by 5% to 33.759 million, and the net loss reached 6.999 million. Costs are responding more quickly than revenue: this is the first concrete sign of the restructuring, but it also shows just how far the process still has to go.

To understand this, we need to look at the network built by the group. In 2018, Monnalisa had 42 company-owned stores and about 60 TPOS—that is, single-brand stores and shop-in-shops managed by partners—within more than 750 wholesale outlets. The number of company-owned stores rose to 48 in 2019, 51 in 2021, 49 in 2022, and 51 again in 2023; then it fell to 36 in 2024 and 24 in 2025. In two years, the company-owned network—long a cornerstone of the brand’s international expansion—shrank by 53%.

The boutiques on shopping streets, in malls, and in department stores served not only to sell products but also to raise brand visibility and foster a direct relationship with customers. However, the first cracks had already appeared before the pandemic. In 2019, with revenue down by just 2.4%, EBITDA fell from 5.238 million to -2.956 million, and net income went from a profit of 1.293 million to a loss of 8.422 million. Monnalisa explained that the wholesale business had not offset the retail startup costs as expected. Eight stores were closed that same year.

The current model stems from that long-standing pressure on the bottom line. Monnalisa refers to it as “Selective Profit-Driven Retail,” as opposed to the previous “Expansionary Showcase Retail.” By 2025, the store network had shrunk by 33%, but retail revenue fell by 13%, from 14.746 to 12.820 million. On a like-for-like basis (same scope and exchange rates), sales in this channel remained stable, and, according to the company, the retained stores achieved a positive economic performance. The downsizing therefore appears to make business sense: stores that were consuming resources without generating an adequate return were closed.

However, the improvement has not yet permeated the entire income statement. EBIT remains negative at 2.765 million, and shareholders’ equity has fallen to 4.759 million. The net loss is also impacted by 1.283 million related to the Chinese subsidiary being divested and foreign exchange losses. Of the 3.893 million in operating cash flow, 2.375 million also stem from a reduction in inventory: a useful effort that brought inventory down from 15.670 to 9.595 million over two years, but one that cannot be repeated indefinitely.

This is where the most delicate issue comes into play. In the luxury sector, a store is not valued solely for what it sells: it also represents communication, experience, data, and control over brand positioning. Prada describes its stores as brand ambassadors; Kering links retail execution to perception and desirability; Moncler considers every touchpoint part of the brand experience. This does not mean opening stores at any cost, but rather recognizing that a physical presence holds greater value than the revenue generated by a single location.

For Monnalisa, the risk is therefore not that it has closed unprofitable stores—a likely necessary step—but rather that, along with the costs, it is losing part of its ability to be seen and recognized, with repercussions for both wholesale and e-commerce. Today, this relationship cannot be measured, because the company does not publish brand awareness metrics. However, it remains a variable worth monitoring in a segment where physical distribution is central: in 2025, chains and franchises accounted for 49.2% of the Italian junior market; online sales grew by 6.1%, but still accounted for only 6% of total spending.

The year 2025 thus conveys two things at once. The reduction in direct retail is making the business structure more sustainable, but it has not yet returned the group to profitability or halted the decline in revenue. The true test of the turnaround will not be reopening closed stores. It will be demonstrating that 24 company-owned stores, wholesale, digital, and licensing can generate enough visibility and revenue to turn the EBITDA recovery into a finally positive financial result.