Moncler Stock – Moncler Shares Surge 15% Following LVMH Investment: A Potential Takeover in Sight?

Moncler Stock – PARIS (Reuters) – Shares in Moncler surged on Friday following a significant investment from French luxury giant LVMH, sparking speculation regarding the long-term intentions of the owner of Louis Vuitton and Moët & Chandon champagne.

LVMH’s Strategic Investment

Analysts suggest that this investment might revive discussions about a potential takeover of Moncler in the long term. However, the immediate benefits of the deal for LVMH, which strengthens its position in the $400 billion luxury sector, are the primary focus. The announcement that LVMH acquired a 10% stake in Double R—the investment vehicle controlled by Moncler CEO Remo Ruffini’s Ruffini Partecipazioni Holding—caused Moncler shares to jump as much as 15% in early trading on Friday.

Market Reaction

Before the announcement, Moncler shares had declined 6.5% this year. Following the news, they were up by 10% by 0944 GMT. Meanwhile, LVMH’s shares, which have decreased 7.5% year-to-date due to a slowdown in the luxury market, gained 2%. Analysts indicated that the deal amounts to about 1.6% of LVMH’s stake in Moncler, with the potential to grow to 4% over the next 18 months.

Analysts Weigh In

According to Luca Solca, an analyst at Bernstein, “LVMH is getting maybe the opportunity down the road to be in the first row if and when Moncler could be up for grabs.” This perspective reflects the ongoing speculation surrounding Moncler’s future in the luxury market.

Moncler’s Potential as an Acquisition Target

Milan-based Moncler, renowned for its high-end puffer jackets, has emerged as one of the industry’s biggest success stories in recent years. It has been considered a potential acquisition or merger candidate for rival luxury groups looking to expand their portfolios.

LVMH’s Historical Approach to Investments

While LVMH’s stake in Moncler is currently small and likely to remain so for the foreseeable future, the agreement is reminiscent of LVMH’s past investments, such as their stake in Tod’s, an Italian luxury shoemaker. In 2021, LVMH increased its stake in Tod’s to 10%, which was described by sources at the time as “friendly support.” JP Morgan noted, “While LVMH has a track record of driving consolidation in the sector, it has also proven that it can play as a minority shareholder and a partner for the long term too.”

Impact of Chinese Stimulus Measures

The announcement coincided with reports from Reuters that China plans to implement further stimulus measures, which boosted luxury shares and raised hopes for a revival in spending on high-end goods. Investor sentiment has been jittery amid concerns over a slowdown in the luxury sector, particularly due to weaknesses in the key Chinese market, affected by slowing economic growth and a property crisis.

From LVMH’s perspective, RBC analyst Piral Dadhania commented, “We view this deal as opportune given current weakness across the luxury sector.” As luxury brands navigate these challenging economic conditions, LVMH’s investment in Moncler could be a strategic move to position itself for future growth and consolidation within the industry.

This investment highlights not only the dynamic nature of the luxury market but also the potential for further consolidation as companies adapt to shifting consumer behaviors and market conditions.

FAQ: LVMH’s Investment in Moncler