LVMH recently entered into an agreement with the Chief Executive Officer of Moncler to acquire up to a 22 percent stake in the investment vehicle that oversees the Italian luxury outerwear brand.
Under the terms of this agreement, LVMH has initially purchased a 10 percent stake in Double R, the entity through which Moncler’s Chairman and CEO, Remo Ruffini, holds a 15.8 percent share of the business, through a special purpose vehicle. This agreement also provides LVMH with the option to increase its stake up to 22 percent.
As part of the deal, Double R will use LVMH funds to raise its stake in Moncler to as much as 18.5 percent within the next eighteen months. This move will further cement Double R as the largest shareholder of Moncler.
Ruffini will continue to maintain control over Double R, while LVMH will have the right to appoint two board members to Double R and one to Moncler’s board. Ruffini will also retain his roles as Chairman and CEO of Moncler and will continue to lead and develop the company’s future plans, according to a statement from LVMH. The company emphasized that LVMH will be a “stable long-term minority shareholder of Double R” and will support Ruffini’s vision for the future.
Ruffini expressed that the partnership strengthens Double R’s position in Moncler and provides the stability necessary to implement his future vision. Bernard Arnault, CEO of LVMH, lauded Ruffini’s vision and leadership, calling Moncler one of the industry’s most significant entrepreneurial success stories of the past two decades.
The transaction affords LVMH an estimated 1.6 percent share in Moncler, which could potentially increase to a maximum of 4 percent, according to Barclays analysts. In response to the news, Moncler shares surged by more than 10 percent on Friday morning, raising its market value to €15.75 billion. LVMH experienced a 2.8 percent rise in its shares, adding to the week’s overall gain of more than 18 percent, driven by optimism that a new Chinese stimulus package might counteract declining luxury sales in China.
Moncler, which also owns the men’s outdoor clothing brand Stone Island, has thrived amid the transition from the pandemic-era luxury boom to a more subdued market. The company reported an 11 percent increase in like-for-like sales in the first half of the year, bringing revenues to €1.23 billion.
Despite the economic downturn impacting many luxury brands, including LVMH, Moncler has sustained its growth in China. Earlier this year, Moncler’s shareholder composition changed when the Rivetti family, the former owners of Stone Island, reduced their stake in Double R, which consequently decreased Double R’s ownership stake in Moncler to its current 5.8 percent.
Analyst Carole Madjo from Barclays noted that the entry of LVMH is intended to reinforce the stake of Double R and the Ruffini family in Moncler.
This is not LVMH’s first foray into acquiring minority stakes in Italian luxury companies. In 2021, Diego Della Valle, CEO of Tod’s, entered into an agreement with LVMH, resulting in a minority stake acquisition by LVMH. Tod’s was subsequently delisted from the Milan stock exchange this year following a deal with the LVMH-backed private equity firm L Catterton.
LVMH, the world’s largest luxury group with a market value of €348 billion, owns over 75 brands, including iconic names such as Louis Vuitton and Dior.