Global luxury giant LVMH has secured a seat on the board of Italian luxury icon Moncler after striking a deal with Moncler’s chief executive, chairman and largest shareholder Remo Ruffini.
LVMH acquired a 10% stake in Ruffini’s investment vehicle Double R, which currently owns a 15.8% stake in Milan-listed Moncler.
That stake is set to increase in the coming months as Ruffini deploys LVMH’s investment into snapping up more Moncler shares.
“This partnership reinforces Double R's position in Moncler and provides the stability needed to execute my vision for the future,” Ruffini said of the investment.
Double R is expected to seize control of 18.5% of the business.
As part of the deal, LVMH has secured a seat on Moncler’s board of directors and two seats on Double R’s board.
“Moncler has been one of the most significant entrepreneurial success stories in the industry over the past twenty years,” said LVMH patriarch Bernard Arnault.
“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 in Moncler and support the independence of the Moncler group.”
Moncler weathers the storm
Ruffini acquired Moncler in 2003 and took it public via an initial public offering on the Milan bourse in 2013.
After bouncing nearly 9% higher today, Moncler has a current market capitalisation of €15.54 billion (£13 billion).
Ruffini is credited with steering Moncler out of near bankruptcy to make it one of the premier Italian luxury brands today.
Despite a sharp downturn in global luxury spending in the past two years, Moncler managed to increase sales by 11% to €1.2 billion in the first half of 2024.
LVMH has been less buoyant, with analysts warning that there is no recovery in sight for the luxury bellwether.
Analysts, however, saw the benefit of this latest acquisition.
“In the absence of share buybacks for LVMH (owing to uncertainty with French tax law treatment), and a lack of credibility and sufficiently large take-out targets, we view minority investments into already established groups as the next best alternative use of excess cash,” said RBC.
“From LVMH's perspective, we view this deal as opportune given current weakness across the luxury sector,” analysts added.