According to people familiar with the matter, Kering Group has started tentative talks with Moncler, but it is unknown whether the deal can be reached.
According to Bloomberg, citing insiders, Gucci’s parent company Kering Group has held tentative talks with Italian luxury goods group Moncler to conduct preliminary discussions on Kering’s acquisition of Moncler.
The person familiar with the matter added that the discussion did not necessarily lead to a real deal. As of press time, Kering Group declined to comment on the matter, and Moncler Group has not yet responded.
Before this, Kering’s competitor France LVMH Group has announced on November 25th Eastern time that it has reached a deal with the US high-end jewelry brand Tiffany. It is the most expensive M & A transaction in the history of the LVMH Group.
The LVMH Group’s leading jewelry brand is the Italian luxury jewelry brand Bulgari acquired by the Group in 2011, but even if it owns Bvlgari, the jewelry watch luxury business is still the weakness of LVMH Group. Watch business revenue accounted for only 9% of total revenue. At the same time, Kering Group owns jewelry brands such as Boucheron, Pomellato, Queen, etc., and accelerates its competition for market share in the field of jewelry and watches.
After the acquisition of Tiffany, LVMH Group reversed its backward situation in the hard luxury market and made Kering Group more sense of crisis.
Kering Group currently owns Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, and other brands, and the group is particularly dependent on its most profitable Gucci. In the first half of fiscal 2019, Gucci contributed more than one-third of the group’s profits.
Kering needs to strengthen and optimize its brand portfolio, and Moncler is a good choice.
Moncler Group Chairman and CEO Remo Ruffini acquired this near-bankrupt outdoor brand in 2003 and gradually developed it into one of the world’s most popular high-end down jacket brands. Since 2019, Moncler’s stock price has surged 33%. As of December 4, the market value of the Moncler Group has just exceeded 10 billion euros.
Moncler has a very bright performance. The recently released third-quarter financial report shows that the Group’s sales have achieved double-digit growth for 23 consecutive quarters. In the first nine quarters of 2019, revenue increased by 14% year-on-year at constant exchange rates to 995 million Euro.
Moncler’s performance in the Asian market is particularly outstanding. In the third quarter, sales in the Asian market recorded a 15% increase. Among them, Japan, the Chinese mainland and South Korea have a higher demand for Moncler’s products.
Luciano Santel Santel, Chief Corporate Officer and Executive Director of Moncler Group, particularly pointed out that Moncler has a very good sales performance in mainland China. As of September 30, Moncler has 199 directly operated stores and 62 wholesale franchise stores worldwide, and nearly 50 stores in Greater China.
Besides, Moncler has also focused on promoting new product design strategies in recent years. In February 2018, Moncler launched the “Moncler Genius” project for the first time. It cooperated with eight outstanding designers and artists in the global fashion industry, each of whom operated a joint collection, and realized monthly updates.
Ruffini said that the Moncler Genius project continues to provide consumers with freshness and has achieved an excellent market response. Currently, it contributes to 8-9% of sales to Moncler.
If Kering wants to acquire Moncler, it must have the support of Ruffini, because Ruffini is the largest shareholder of Moncler Group. Bloomberg estimates that Ruffini holds approximately 22.5% of the Moncler Group.
Ruffini said in an interview with the Financial Times in April that he had no plans to sell Moncler. “We are in a very good situation, and it is a shame for me to sell the company now.”