There Is Nothing On The Table: Kering Is Not Buying Moncler

PARIS, FRANCE — Last December 2019, DM Fashion Book reported that French international luxury group Kering SA has held exploratory talks with Moncler SpA about a potential deal for the Italian luxury label, people with knowledge of the matter said (see it here).

Last week, Kering‘s chairman and chief executive officer François-Henri Pinault ruled out that the French conglomerate was buying Moncler.

Pinault said he maintained regular contact with Moncler chairman, CEO and shareholder Remo Ruffini, but clarified the conversations were linked to the Fashion Pact, the industry-wide environmental initiative spearheaded by Kering.

“There is nothing on the table. We know each other, we appreciate each other,” Pinault said.

Moncler shares rose sharply in December following a report that Kering was holding exploratory talks to buy the Italian maker of down-filled jackets.

Moncler‘s $2,000 puffy down jackets have moved beyond the ski slopes of St. Moritz to the inner cities in America as well as the Aspen snowmass ski resort.

Ruffini said at the time that he held regular talks with investors and other sector participants, including Kering, to explore strategic potential opportunities for Moncler. “At the moment, there is not any concrete hypothesis under consideration,” he added.

Though Kering plans to focus on organically growing its existing houses, which include Gucci, Saint Laurent, Balenciaga and Bottega Veneta, Pinault said it remains in the market for acquisitions, although he ruled out direct competitors, companies below a certain size, and watchmakers.

“I don’t want any brand competing directly with my existing brands. I would be destroying value in doing so. In terms of product category, price segment on the market or style, we are always assessing the opportunities that could come on the market based on that. We’re not passive but we’re still very, very selective,” he said.

With a free cash flow of 1.52 billion euros, after settling its Gucci tax dispute with Italian authorities, and its remaining stake in German sporting goods firm Puma, Kering has the means to pursue midsized acquisitions, said Piral Dadhania, analyst at RBC Capital Markets.

“Alternatively, management have also suggested they are open to elevated cash returns to shareholders,” he added.

Photos Credit: Courtesy of Moncler