A big purchase happened this month in the luxury world. The prestigious brand Moncler bought the sports accessory company Stone Island for $1.4 billion. The acquisition has the goal to attract American and Asian markets, but it is also targeted towards the new luxury shopper, who is part of Generation Z.
Moncler gets stronger presence in Italy, Stone Island in the world
Moncler buys Stone Island for $1.4 billion. The preliminary discussion started in 2019 and it was signed at the end of November 2020. The transaction should be finalized by the end of the first half of 2021. The two Italian brands will remain two separate entities, with their own products. Moncler buys 70% of the shares directly from Carlo Rivetti, the CEO of Stone Island, and the members of his family. The remaining 30% will be purchased from state investor Temasek from Singapore.
This new joint should provide Moncler a stronger and a bigger presence in their home country – both companies are Italian – and it will also help Stone Island to have international recognition. The goal is to attract also more younger clients part of Generation Z who, according to the statistics, they are the new luxury shopper. They are the first ones to buy luxury items when the stores opened after lockdown. The two companies want to improve their digital presence as well and they count on the fact people spend more time online now than ever. Moreover, traveling was not much of an option this year, so the two brands count also on the idea that people would invest that money in purchasing luxury items,
No traveling? Then luxury shopping goes up
The chairman of Moncler, Remo Ruffini, assured in an interview that prices of Stone Island‘s clothes would not increase at all, “they are right just the way they are”, but he definitely sees growth for both companies through this transaction. Moncler is best known for its puffers and parkas, and Stone Island for its streetwear jackets and other garments. Since ski resorts are mostly closed – except for Switzerland – Moncler might have a downfall in revenue due to this. Its skiwear and winter jackets made up a big part of their offer.
On the other hand, Stone Island offers colourful edgy street jackets, garments that change their colours according to the temperature, and other high tech fabrics, which most definitely could benefit Moncler. Regarding seasonality and positioning, the two businesses can join forces as Moncler has the most revenue during wintertime – 75% and 25% during summertime. Stone Island on the other hand is much more balanced – 50/50.
“Beyond Fashion, Beyond Luxury”
The purchase was announced on social media as well, on December 7. Moncler will support Stone Island to have a better position on the international fashion market. Regarding the advisors of the transaction, Citigroup and Cornelli Gabelli were the ones chosen by Moncler, while Rothschild advised Stone Island.
“Through their shared vision, Moncler and Stone Island will work together to utilize their individual expertise towards a common goal: a stronger future that benefits people, community, Italy, and the planet. Moncler will support Stone Island in the development of its international growth in both physical and digital retail while creating opportunities for the people of both companies to share new ideas and exchanges that honor our heritage in Italian excellence around the world. Today we chart a new course forward, nurturing the unique identity of Stone Island, its clarity of positioning, unique technical skills, and community while creating new possibilities that go “Beyond Fashion, Beyond Luxury”, was the announcement posted on social media.
Moncler Genius, the “baby” of Moncler
This would not be the only big move Moncler has done over the past years, but we definitely need to mention “Moncler Genius”. This is like the child project of Moncler that CEO Remo Ruffini wanted to make it happen. The project was presented in 2019 at Milan Fashion Week. Its concept? It basically brings together more creative directors – not only one- that can come up with more ideas and more collections on a monthly basis. The skiwear and active wear designer is one of the most prestigious luxury brands in the world, next to Versace, Gucci, Prada or Dior.