Two competing luxury sportswear brands, Moncler SpA and Stone Island, will live under the same roof in a deal valued at $1.4 billion.
Moncler will acquire 70 percent of the ski wear brand’s parent SPW from owner Carlo Rivetti and members of his family. SPW in turn will acquire the remaining 30 percent stake from Singapore’s state investor Temasek.
Moncler chairman Remo Ruffini said in a conference call that Stone Island can grow in markets such as Asia and the Americas. “It is precisely in these markets that we need new energy and new inspiration to build our tomorrow,” he said, according to a Bloomberg report.
Stone Island, which has a younger customer base, will also help Moncler grow its luxury appeal in the direct-to-consumer channel.
“Remo and I have decided to combine forces and visions to meet together and with greater strength than ever the challenges we all face. We share the same roots, similar entrepreneurial journeys, and the utmost respect for the profound values of our brands and our people. And we are Italians,” Rivetti, Stone Island’s chairman and CEO, told Business of Fashion.
Moncler has seen sales decline as European countries have closed ski resorts due to the coronavirus pandemic. The brand sells high-end winter jackets favored in those travel destination markets. Stone Island does too, but it’s primarily a wholesaler with only 24 stores versus Moncler’s 218 locations. Both brands have shifted their offerings to include athleisure apparel as consumers migrated to working from home.
Athleisure apparel is expected to remain a strong category even after Covid-19 retreats.
“Companies have shifted that balance between work-from-home and work-to-office, and we expect they will continue to offer more work-from-home [options] than in the past,” Althea Peng, who heads up the fashion and retail practice at McKinsey & Co., said.
As for the comfort that’s built into athleisure, Peng added, “Consumers have discovered comfort. The key many be how [brands] blend comfort with what visibly looks like work attire. But consumers will want occasions where they dress up, other than sweats and leggings, and not want to give up comfort entirely.” With the stretch and casualization trend favored for Zoom calls, Peng expects that work attire probably won’t have the prior level of formality when workers return to the office.
McKinsey’s The State of Fashion 2021 report last week, in partnership with Business of Fashion, noted that it expects the luxury sector to see further consolidation. “The luxury industry was already busy consolidating long before the pandemic, as giants squeezed out mid-sized brands unable to compete with the scale of strategic conglomerates,” the report said.
Many on Wall Street expect luxury to do well in the aftermath of Covid-19 as consumers begin to travel again, and now—and even next year—could be a good time to snatch up better brands that will benefit once jetsetters return to their wanderlust ways.
When Capri Holdings Ltd. reported first-quarter earnings on Nov. 5, CEO John Idol said he didn’t think the travel retail will see any kind of “significant recovery until calendar 2022.” Duty-free shopping and other sporting destinations, such as shops at ski resorts, have been severely impacted by the pandemic.