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Shares in Moncler saw a significant rise following the news of French luxury group LVMH’s investment in the Italian outerwear specialist. Speculation regarding a potential takeover of Moncler in the long term has been reignited, with analysts focusing on the immediate advantages of the deal for LVMH in reinforcing its dominance in the luxury sector.

Moncler’s shares, which had declined earlier in the year, surged by as much as 15% after it was announced that LVMH had acquired a 10% stake in Double R, the investment vehicle controlled by Moncler CEO Remo Ruffini’s Ruffini Partecipazioni Holding. This move gives LVMH an approximately 1.6% stake in Moncler, with the potential to increase it to 4% over the next 18 months.

While the current stake may be small, the agreement reflects LVMH’s strategy of establishing long-term partnerships as seen in its investment in Italian luxury shoemaker Tod’s. Meanwhile, news of the deal coincided with reports of further stimulus measures in China, boosting luxury shares and instilling hope for a revival in high-end goods spending.

In light of concerns over a slowdown in the luxury sector, the investment in Moncler is seen as timely for LVMH. With its strong track record in the industry, LVMH’s move is seen as an opportunity to strengthen its position amidst sector weaknesses. This investment comes as part of LVMH’s strategy to use excess cash for minority investments in established groups, especially in the absence of attractive M&A targets.

Looking back, Moncler had been previously considered as a possible merger candidate for Kering before the pandemic. With Kering focusing on other acquisitions and reviving sales at Gucci, the door opened for LVMH to secure a strategic partnership with Moncler.

Ruffini’s vision for Moncler has been a driving force behind the brand’s success, marked by innovative collaborations and strategic acquisitions. The investment from LVMH underscores support for Ruffini’s leadership and commitment to furthering Moncler’s growth and reputation in the luxury fashion market.

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