Stone Island Acquisition: Key Details, Impact, and What Comes Next

Moncler's acquisition of Stone Island for $1.4 billion marks a significant consolidation in the luxury fashion industry. This strategic move aims to enhance both brands' market presence, particularly in the U.S. and Asia, while maintaining their unique identities. The deal underscores the growing trend of mergers and acquisitions in the luxury sector, driven by the need for resilience and expansion.

What Is Stone Island?

Founded in 1982, Stone Island specializes in men's clothing, outerwear, and accessories. The brand differentiates itself with unique services such as in-store pickup, personalized shopping appointments, and a hassle-free returns policy. These offerings enhance customer convenience and satisfaction, setting Stone Island apart in the competitive luxury fashion market.

Who Acquired Stone Island?

Moncler Group is a prominent player in the luxury fashion industry, renowned for its high-end outerwear and apparel. The company is best known for its luxury down jackets and has expanded into other apparel and accessories. Moncler emphasizes sustainability and innovation, maintaining a strong market presence through its brands, Moncler and Stone Island. Recognized for its financial performance and commitment to sustainability, Moncler holds a significant position in the luxury fashion market.

When Was Stone Island Acquired?

Moncler announced its acquisition of Stone Island on December 7, 2020, with the deal expected to close by the first half of 2021. This move came during a period of increased consolidation in the luxury sector, driven by the need to adapt to the challenges posed by the COVID-19 pandemic. The acquisition aimed to strengthen Moncler's market position and expand its reach in key markets such as the U.S. and Asia, reflecting broader industry trends towards resilience and growth.

Why Was Stone Island Acquired?

• Market Expansion: The acquisition of Stone Island by Moncler is a strategic move to expand its market presence, particularly in the high-end streetwear and fashion segments. Stone Island's popularity with Generation Z and its potential for growth in the Chinese and U.S. markets are highlighted as key factors for future expansion. Additionally, the collaboration between the two brands aims to enhance their direct-to-consumer channels, capturing new luxury customers in these regions.
• Technology Integration: The brands will amplify their direct-to-consumer (DTC) channels, which implies the use of technology to enhance customer engagement and sales. The introduction of the Stone Island Shadow Project, which explores new aesthetic-functional codes, indicates the integration of advanced design and textile technologies. This technological synergy is expected to improve operational efficiency and market reach.
• Competitive Advantage: Moncler's acquisition of Stone Island is described as a strategic move to consolidate its position in the luxury market and potentially create an Italian luxury hub. This move is seen as a way to compete with French luxury conglomerates like LVMH and Kering. The Moncler Genius project, which involves collaborations with high-profile designers, has modernized the brand and contributed to its growth, providing a significant competitive advantage.

Acquisition Terms

• Acquisition Price: The acquisition price for Stone Island by Moncler was 1.15 billion euros ($1.4 billion).
• Payment Method: The transaction was a share-and-cash deal. Moncler paid half in cash and half in its own shares. Specifically, the Rivetti family received 10.7 million new Moncler shares at a set price of 37.51 euros per share.
• Key Conditions or Agreements:
  • Moncler acquired just over 50% of Stone Island from owner and CEO Carlo Rivetti and a further 19.9% from other family members.
  • Moncler aims to buy the remaining 30% held by Singapore's state investor Temasek.
  • The deal is expected to close by the first half of 2021.
  • All newly issued shares will be subject to a lock-up restriction for 12 months following their subscription and, for 50 percent of them, for a further six months.
  • Rivetti and the other SPW shareholders have reached an agreement with Ruffini Partecipazioni Holding Srl, whereby all newly issued Moncler shares received by them will be transferred to Ruffini Partecipazioni Srl.
  • It is expected that Rivetti will join the board of Moncler following the closing of the transaction.
  • Ruffini will continue to exercise control over Ruffini Partecipazioni, which is expected to change its name to Double R Srl.

Impact on Stone Island

The acquisition of Stone Island by Moncler has led to significant changes in operations and management. Moncler now holds full control over Stone Island, with Carlo Rivetti expected to join Moncler's board. Despite the acquisition, both brands will continue to operate as separate entities, sharing strategies to enhance their direct-to-consumer channels and expand in key markets like the U.S. and Asia. This strategic alignment aims to leverage Moncler's established market presence to boost Stone Island's growth, particularly in regions where it previously had limited reach.

In terms of product offerings and services, the acquisition is expected to amplify Stone Island's direct-to-consumer potential, enhancing its retail network with Moncler's support. The integration will likely lead to new product innovations and expanded collections, catering to a broader audience. Employee reactions have been generally positive, with key figures like Carlo Rivetti expressing optimism about the combined future of the two brands. Customer reactions, particularly from Generation Z, are anticipated to be favorable, given the enhanced market reach and improved service offerings. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.