Whatâs Going On Here?All that Dom Perignon mustâve gone straight to Monclerâs head, because the Italian luxury fashion brand announced itâll buy compatriot Stone Island for $1.4 billion. What Does This Mean?The pandemic has decimated demand for high-end goods, and Monclerâs luxury ski jackets are no exception: sales have been hammered by the closure of ski resorts across Europe. So to keep its head above water â or, uh, snow â the companyâs been looking for a way to attract new customers.
And it might just have found that in the form of Stone Island: the retailerâs high-end streetwear isnât just more colorful than Monclerâs offering, itâs cheaper too â not to mention all the rage with celebrities. And that, Moncler hopes, should help it win over a younger, trendier, and potentially more spend-happy customer. Why Should I Care?Zooming out: Mais non!
Before news of the acquisition surfaced, investors were expecting Moncler to be the âbuyeeâ rather than the âbuyerâ â especially considering Gucci-parent Kering was reportedly sniffing around the company last year. No surprises there: Kering and rival French conglomerate LVMH have been buying luxury fashion retailers left, right, and center over the last few years. Moncler and Stone Islandâs decision to team up with a fellow Italian, then, might come as music to their countryâs ears.
The bigger picture: Fashionably late.
A new report by McKinsey released last week suggests the future of fashion is, putting it kindly, uncertain. The consultancy firm reckons fashion sales will need until the third quarter of 2022 at best and the fourth quarter of 2023 at worst to return to pre-pandemic levels. And between now and then, the only two areas that stand to grow in any meaningful way are online sales and the Chinese market. Still, itâs not all bad: the firm thinks thereâll be a rise in mergers and acquisitions as businesses like Moncler take advantage of low valuations to increase their market share. | 