LVMH Acquires 1.6% Stake in Moncler via Double R Transaction

LVMH announced on Thursday that it has acquired a 10% stake in Double R, an investment vehicle owned by Remo Ruffini, who holds a 15.8% stake in Moncler. This acquisition indirectly gives LVMH a 1.58% ownership in Moncler Group. With this investment, LVMH will secure one board seat on Moncler and two seats on Double R.

Double R has a significant holding in Moncler, a well-known luxury brand specializing in outdoor and performance wear. This move illustrates LVMH’s strategy of diversifying its portfolio within the luxury market.

Through this collaboration, LVMH aims to help Double R increase its stake in Moncler from approximately 15.8% to as much as 18.5% within the next 18 months. Analysts at Citi Research noted that “Double R is expected to strengthen its control in Moncler, funded through LVMH’s share purchases in the market, raising LVMH’s stake in Double R to a maximum of 22%.”

LVMH will finance this future share acquisition, further boosting its investment in Double R to potentially 22%, which translates to around 4% in Moncler.

This investment from LVMH is anticipated to bolster Remo Ruffini’s position as the largest shareholder of Moncler, allowing him to guide the company’s strategic direction and long-term growth.

LVMH’s stake illustrates its ongoing commitment to investing in high-potential luxury brands while supporting their management teams. Analysts from RBC suggested that, in light of uncertainties surrounding French tax law and the absence of significant share buybacks, minority investments in established firms represent a viable alternative for utilizing surplus cash.

For LVMH, this move presents an opportunity to enhance its brand portfolio, particularly in the burgeoning luxury outdoor and performance wear market. Meanwhile, Moncler stands to gain additional resources and support, facilitating its future growth and innovation in an evolving marketplace.

This investment arrives amidst rapid growth in the luxury sector, especially in outdoor and active lifestyle segments, where Moncler has established a strong foothold. RBC analysts commented that the timing is advantageous, given the current challenges faced by the luxury sector, reflected in decreased equity valuations.

LVMH’s involvement is likely to accelerate Moncler’s international expansion, broaden its product offerings, and reinforce its market positioning.