Dec 5, 2019
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Kering 'in exploratory talks' on deal for luxe outerwear maker Moncler

Dec 5, 2019

As luxury giants continue to snap up the world’s top brands, could the latest move be Kering preparing to buy Moncler? It could be if news reports are to be believed (although neither company has commented), with Bloomberg saying late on Wednesday that the two have held exploratory talks. And just like Tiffany recently in its talks, followed by a deal, with LVMH, Moncler is in a strong position to demand a high price if it does join the Kering portfolio.

Moncler Genius Pierpaolo Piccioli AW19

It currently has a market value of just over €10 billion based on its closing share price on Wednesday.

Sources with knowledge of the matter said no deal is guaranteed, but Moncler is clearly one of the most desirable names in the luxury sector and would be an undeniably strong addition to the Kering line-up. 

But if Kering is determined to take it over, it needs to win the backing of Remo Ruffini, the Moncler chief and visionary who’s also its biggest shareholder via an investment vehicle he controls (Bloomberg estimated his holding at around 22.5%).

His winning of the Business Leader of the Year title at the Fashion Awards earlier this week reflected how he has driven the firm’s value even higher since its 2013 IPO, and also reflected its 30%+ share price rise this year alone, on the back of a succession of strong results. 

He’s made Moncler a brand that would certainly deserve a place alongside Kering’s powerhouse brands such as Gucci, Saint Laurent, Bottega Veneta and Balenciaga. 

Moncler has always been more that ‘just’ an upscale skiwear and outerwear brand and its Gamme Rouge line won it a place in the designer fashion sector quite a few years ago. But its more recent introduction of the Genius concept, based on multiple drop collaboration collections with established and emerging designers, has propelled it further and even more into the forefront of fashion trends. And the casualisation of fashion in this decade has helped to boost its appeal further. 

Importantly, it has nearly 50 Greater China stores, to help it take advantage of the world’s most dynamic luxury market. Chinese consumers helped its sales rise 12% currency-neutral to almost €1 billion in the first nine months of the year, the company announced back in October.

Last year, revenue hit €1.42 billion and adjusted EBITDA rose to €500.2 million from €411.6 million, with core profit margins also rising.

Earlier this year, in a newspaper interview, Ruffini said no one has asked to buy the company so far, and that it would be a shame to sell at present, although he added that he would like to see what happens in the next three to four years.

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