Italian luxury brand Moncler makes its very first takeover during the corona pandemic. The jacket brand pays 1.15 billion euros for Stone Island, an Italian streetwear label that appeals to young people in particular.
Italian LVMH rival in the making?
Despite the corona crisis, a new billion-dollar takeover is taking place within the luxury goods industry. The Italian label Moncler is taking over smaller industry companion and fellow Italian label Stone Island for 1.15 billion euro. Yet, it is an unusual marriage: while Moncler is mainly known for its down coats, Stone Island focuses more on streetwear. It is also Moncler’s very first acquisition.
Analysts note it as a sign that Moncler wants to form its own Italian “luxury hub” and thus compete with dominant mega-holdings LVMH and Kering, who are increasingly active in Italy. “This is the right time, because it underlines Italy’s resilience in such difficult times,” Moncler Chief Executive Remo Ruffini points out.
“We shouldn’t wait”
It was Ruffini who took Moncler out of financial difficulties in 2003 and turned it into a listed luxury label with a market value of 11 billion euros. Last year’s turnover was 1.6 billion euros before the corona crisis knocked down this year’s figures. Nevertheless, Ruffini is already looking ahead: “We don’t have to wait until this crisis has passed. At the moment, everything is moving faster. We want to be ready to move on to a different stage once this crisis is over,” said the chief executive to Vogue.
Talks with Stone Island started about nine months ago because Ruffini saw a lot of potential in the brand, which is popular with younger people, people from Generation Z in particular. “It reminds me of Moncler ten years ago,” he said. Stone Island, like its acquirer at the time, currently derives the majority of its turnover from wholesale (80 per cent) and is not yet active in the important Chinese market, nor the United States. Ruffini, therefore, expects to double the turnover within five years.
Half of Stone Island’s shares are currently held by owner and CEO Carlo Rivetti, who will receive half in cash and the other half in shares. Another 19.9 per cent of the shares will be taken over from other family members. At a later stage, Moncler also hopes to take over the remaining thirty per cent of shares owned by Temasek, the Singaporean investment company. Temasek also has a small share in Moncler.
