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LVMH has struck a deal with the chief executive of Moncler to take an up to 22 per cent stake in the investment vehicle that controls the Italian luxury outerwear specialist.
Bernard Arnault’s group has bought a 10 per cent stake in Double R, the entity through which Moncler chair and chief executive Remo Ruffini owns 15.8 per cent of the business, via a special purpose vehicle. It has the option of increasing that stake to up to 22 per cent.
Under the terms of the agreement, using LVMH funds, Double R will increase its stake in Moncler to up to 18.5 per cent over the next year and a half, reinforcing Double R’s position as its biggest shareholder.
Ruffini will continue to control Double R, but under the agreement LVMH can appoint two of its board members, plus one at Moncler.
Ruffini will remain chair and chief executive of Moncler and “will continue to define and drive Moncler Group’s plans for future development”, LVMH said in a statement. LVMH will remain a “stable long-term minority shareholder of Double R, [and] will support the deployment of Ruffini’s future vision”, it added.
“This partnership reinforces Double R’s position in Moncler and provides the stability needed to execute my vision for the future,” Ruffini said in a statement.
“Moncler has been one of the most significant entrepreneurial success stories in the industry over the past 20 years. Remo Ruffini’s vision and leadership are remarkable and I am delighted to invest in his holding company to reinforce his position as leading shareholder,” Arnault said.
The deal grants LVMH an estimated 1.6 per cent share in Moncler, according to analysts at Barclays, which could rise to a maximum of 4 per cent.
Shares in Moncler rose more than 10 per cent on Friday morning, taking its market value to €15.75bn. LVMH rose 2.8 per cent, building on gains earlier this week for a total increase of more than 18 per cent, as investors surfed a way of optimism that a new Chinese stimulus package could help reverse declining luxury sales in the country.
Moncler, which also owns men’s outdoor clothing brand Stone Island, has been one of the strongest performers as a pandemic-era luxury boom has given way to slowdown. Its like-for-like sales in the first half of the year increased 11 per cent to €1.23bn.
It has also maintained its growth in China, according to analyst estimates from Barclays, at a time when sales at many luxury groups, including LVMH, have fallen as the economy worsens.
Moncler’s shareholder structure has been in flux since earlier this year when the Rivetti family, the former owners of Stone Island, sold down their around 16.5 per cent position in Double R, reducing the vehicle’s ownership stake in Moncler to its current 5.8 per cent.
“The entry of LVMH is . . . an answer to reinforcing the stake of Double R [and] the Ruffini family over Moncler,” wrote Carole Madjo at Barclays.
This is not the first time that LVMH, the world’s biggest luxury group with a market value of €348bn, has taken a minority stake in an Italian company in the industry.
Diego Della Valle, chief executive of Tod’s, struck a deal with LVMH to take a minority stake in the company in 2021. It was delisted from the Milan stock exchange this year in a deal with LVMH-backed private equity firm L Catterton.
LVMH owns more than 75 brands, including Louis Vuitton and Dior.
