Luxury parka maker Moncler is acquiring Stone Island, an Italian high-end streetwear brand, in a deal valued at $1.4 billion. The acquisition is the first-ever purchase made by the company in its 68 years of existence.
The deal signals Moncler’s effort to consolidate competition in the luxury retail landscape and could mark the first step toward the building of an Italian luxury hub, an unnamed source close to the deal told Reuters.
“It is the right moment, because at such a difficult time it underscores the resilience of Italy,” Moncler Chief Executive Remo Ruffini told a call with analysts on Monday.
According to the terms of the deal, Moncler will pay half in cash and half in its own shares to Stone Island, which would give Stone Island’s CEO Carlo Rivetti 10.7 million new Moncler shares at nearly $45 per share.
“It reminds me a lot of what Moncler was 10 years ago, I believe it has great potential to grow,” Ruffini said on the company’s move to acquire Stone Island. Over the next five years, Ruffini aims to double the sales of Stone Island’s.
Moncler, a struggling brand in its yore years, was bought by Ruffini in 2003. Ruffini is credited with turning the company around into a globally recognized luxury fashion brand. The company has a market value of $11.3 billion and made $1.9 billion in sales last year before a big decline at the start of the pandemic, Reuters reported.