Preview

1) Kering is looking to acquire Moncler—a purchase that would strengthen its sportswear offering and enable it to better compete with LVMH.

WHAT HAPPENED: Bloomberg reported last week that Kering is eyeing Moncler, which is currently valued at €9.8 billion. WHY IT MATTERS
  • LVMH’s recent Tiffany & Co. acquisition puts pressure on Kering to continue growing its portfolio. LVMH’s recent purchase is the biggest deal ever in the luxury sector. Since Kering is LVMH’s main competitor and Gucci’s momentum continues to slow, it needs to diversify. Rather than retaliate with brands from the jewelry and watch sector, Kering should focus on strengthening its sportswear business and look for new opportunities in the burgeoning streetwear category. LVMH ventured into this world with its recent investment in two-year-old streetwear label MadHappy, but Kering needs a brand like Moncler to continue succeeding.
  • While the Moncler purchase would strengthen Kering’s fashion offering, it does not solve the holding company’s lacking jewelry and watch offering. LVMH and Richemont’s control of the fine jewelry and watch space means Kering is at a disadvantage when it comes to expanding its existing holdings in this category. There have been murmurings of a possible merger between Kering and Swiss luxury giant Richemont, which would be advantageous for both parties. Richemont could bolster its fashion business and Kering its jewelry and watch offering.
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