Luxury is about more than just price — it’s about identity, status, and quality. Few brands have managed to scale those qualities as effectively as Moncler. Under Remo Ruffini’s leadership, the company transformed from the brink of bankruptcy into one of the most profitable and consistent businesses in luxury fashion.

By combining high-fashion aesthetics with high-performance materials, Moncler appeals to both extroverted, status-driven buyers and more discreet luxury enthusiasts. Ruffini’s playbook is simple, but far from easy: emphasize the brand’s heritage, expand globally through direct-to-consumer channels, and place a special focus on China — one of the most important luxury markets in the world.

Now, he’s applying the same strategy to the second brand under Moncler’s umbrella: Stone Island.

In this Newsletter, we’ll break down the details of Ruffini’s brand-building approach, how Moncler is navigating the broader luxury slowdown, whether it could evolve into Italy’s first luxury conglomerate — and, of course, whether the stock deserves a spot in our Intrinsic Value Portfolio.

— Daniel

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Moncler: A Success Story of Italian Fashion

Moncler’s Heritage

There’s a pattern that runs through many of the world’s most iconic luxury brands: they often begin in narrow niches, master their craft, and then scale into the mainstream — without ever losing the essence of what made them special.

Rolex, for example, originally built watches for deep-sea divers and high-performance athletes. Lamborghini gained mechanical expertise building tractors before becoming synonymous with high-end sports cars.

Moncler’s origin story follows a similar arc. It didn’t start in Italian fashion houses but in the French Alps. The company was founded by René Ramillon to produce rugged outdoor equipment — sleeping bags, tents, and protective gear for local workers braving the cold. Its name, Moncler, is short for Monestier-de-Clermont, a small mountain village near Grenoble.

It didn’t take long for the product lineup to evolve. Moncler’s catalog expanded to include down jackets, gloves, and full-body suits — all designed to withstand the harshest alpine conditions.

That technical pedigree was put to the test in 1954, when a team of Italian climbers set out to summit K2, the world’s second-highest and one of its most dangerous peaks. Moncler outfitted the expedition with high-altitude gear, helping the climbers brave the freezing temperatures and extreme conditions.

The success of that mission marked a turning point. From that moment on, Moncler wasn’t just a maker of outdoor gear — it became a brand synonymous with resilience, craftsmanship, and functional elegance. The DNA of the K2 expedition still runs through the company’s heritage today.

Though Moncler’s roots remain a core part of its identity, the brand today is better known for its luxury appeal than its technical performance.

The Man Behind the Transition: Remo Ruffini

Ruffini seemed destined to become a fashion icon. He was born in Como, Italy — a small city I had the chance to visit last year. It’s no surprise that someone who grew up surrounded by such beauty would develop a sharp sense for aesthetics.

But Como’s link to high fashion goes beyond its beauty. The city has long been a global hub for the silk industry. In fact, by 1972, Como’s silk production even surpassed that of China and Japan. Even today, Como remains world-renowned for transforming high-quality silk into some of the finest luxury fabrics in the world.

Louis Vuitton, Gucci, Hermès, Armani — all source silk from Como or operate production facilities there.

Ruffini’s connection to fashion, however, runs even deeper than his birthplace. Both of his parents owned their own fashion businesses, giving him early exposure to the industry.

After successfully launching and selling his own brands — New England and Ingrose — his most ambitious venture began in 2003, when he acquired Moncler and set out to turn a functional outerwear label into a global luxury icon.

Reviving Moncler

Remo Ruffini acquired 52% of Moncler for just €1.2 million — a remarkably low price, even for a struggling brand. The deal was made possible by the financial troubles of Fin.Part, the Italian holding company that owned Moncler at the time. Forced to sell off assets, Fin.Part let go of the brand at a bargain.

Fast forward to today, and Moncler is worth around €17 billion. Although Ruffini’s stake has been diluted to 15.8%, he remains the company’s largest shareholder — and his initial €1.2 million investment has grown into roughly €2.7 billion.

That’s a compound annual growth rate of 42% over 22 years. Not a bad return, to say the least.

So how did Ruffini turn a declining outerwear label into one of the strongest luxury brands in the world?

He built a clear and consistent playbook — one that centers on brand control, storytelling, and direct access to the customer. At the core is Moncler’s strong focus on the direct-to-consumer channel. While wholesale partnerships are essential for many fashion brands, they come at the cost of control. Retailers influence how products are priced, marketed, and displayed — all of which can dilute a luxury brand’s image.

Luxury, by definition, demands control. And for Ruffini, Moncler’s stores aren’t just points of sale — they’re brand stages. A core principle of luxury marketing is that it shouldn’t sell products but tell stories. That’s exactly what Moncler’s stores do. And while they rank among the top three most profitable stores in the industry, their primary function is just as much about reinforcing the brand’s identity as it is about moving jackets.

Even more important than creating the right in-store experience is having full control over pricing and discounting. When brands rely on wholesalers, they give up that control — and with it, the ability to protect their pricing integrity. Retailers can apply discounts at their discretion, regardless of the brand’s positioning.

For a luxury brand like Moncler, discounting is a poison pill. It undermines the perception of value, signals that the product isn’t worth its full price, and erodes the sense of exclusivity that luxury depends on. The more accessible a product becomes, the less aspirational it feels.

Beyond brand perception, discounting also eats into profitability. Wholesale partners not only discount more aggressively — they also take a cut for marketing and distribution. That’s why wholesale-focused brands often operate with gross margins in the range of 50%. In contrast, Moncler, with 86% of its sales coming through direct-to-consumer channels, boasts a remarkable 78% gross margin — a clear reflection of both pricing power and brand control.

The second pillar of Ruffini’s playbook was transforming Moncler into a truly global brand. When he took over in 2003, Moncler’s presence was largely confined to Italy, with minimal visibility beyond Europe.

Today, the picture looks very different: roughly half of Moncler’s sales come from Asia, particularly China, while the remaining half is split between Europe and the Americas.

Still, the Americas remain underpenetrated, accounting for just 14% of total revenue. That’s likely to change in the coming years. Moncler is now prioritizing expansion in the U.S., with a focus on culturally influential cities — starting with flagship locations like New York City.

The Genius Project

One of Ruffini’s biggest product innovations has been the Genius Project, which he launched in 2018.

Traditionally, luxury brands release two collections per year. Genius changed that by introducing monthly capsule drops, each designed in collaboration with leading creatives like Rick Owens, Hiroshi Fujiwara, Pharrell Williams, or A$AP Rocky. This approach allowed Moncler to tap into the fast-paced culture of modern fashion without undermining its luxury status.

Each Genius release is limited in quantity, distributed through Moncler’s tightly controlled DTC channels, and presented as collectibles. It’s a clever way to embrace fashion’s evolving tempo while preserving the scarcity, creativity, and brand equity that define luxury brands.

Moncler as a Fashion Conglomerate?

The Stone Island Acquisition

In late 2020, Moncler acquired the high-end streetwear label Stone Island in a $1.4 billion deal, valuing the brand at 20 times earnings. It was a strategic bet on broadening Moncler’s reach into the younger, more urban segments of the luxury market.

While the two brands come from very different worlds, Stone Island has a rich and distinctive heritage of its own. Founded in northern Italy — a region known more for industrial precision and automotive excellence than high fashion — Stone Island draws from the same culture that produced icons like Ferrari and Lamborghini.

Unlike the southern roots of many traditional Italian luxury houses, Stone Island’s DNA is steeped in technical innovation, material experimentation, and functional design — all expressed through the lens of streetwear.

Stone Island’s founder, Massimo Osti, was deeply influenced by northern Italy’s industrial culture. Known for his constant experimentation with unusual fabrics and dyeing techniques, Osti brought a technical, almost engineering-like mindset to fashion. When Stone Island entered the market, it quickly gained traction among young, affluent, middle-class teens — many of whom were passionate about football.

That connection would eventually take the brand in an unexpected direction. As Italian and English football clubs clashed in European competitions, British fans began noticing Stone Island’s distinctive compass badge. Drawn to its bold aesthetic and exclusivity, they started buying pieces and bringing them back to the UK.

From there, Stone Island became deeply embedded in English football culture — and soon, associated with the emerging hooligan movement. What might have been seen as a reputational risk for most luxury brands, Stone Island leaned into. The brand doubled down on its rebellious image, even releasing a jacket made with Kevlar, the same material used in bulletproof vests.

And while its roots in football subculture remain part of its DNA, Stone Island found its way back into the mainstream in the early 2000s — bridging the gap between technical outerwear and high-end streetwear.

When Moncler acquired Stone Island, Remo Ruffini described it as a “2010 Moncler” — a nod to the striking similarities in scale and brand positioning. Just like Moncler a decade earlier, Stone Island had strong momentum, a unique product, and cultural credibility, but lacked a global footprint and a well-developed direct-to-consumer (DTC) strategy. It was a textbook candidate for Ruffini’s brand-building playbook.

Back in 2010, Moncler generated €280 million in revenue, with 35% coming from Italy and only 27% through its DTC channel. Stone Island’s numbers painted a similar picture at the time of the acquisition: €240 million in revenue, 28% of which came from its home market, and nearly 80% still flowing through wholesale channels — leaving significant room to grow margins and strengthen brand control through DTC expansion.

Over the next ten years, Moncler grew revenues at an impressive 19% CAGR. Its home market of Italy, once its largest, shrank to just 11% of total sales, while DTC channels almost tripled, rising from 27% to 77% of total revenue — a textbook execution of Ruffini’s playbook.

Now, five years into the same journey, Stone Island has shown equally promising signs. In the two years following the acquisition, revenue grew by 35% in year one and 28% in 2022. But the more telling shift has been in distribution: DTC sales nearly doubled, thanks in large part to a tenfold increase in Asian stores — going from just 4 to 44 in a single year.

More recently, the picture has become a bit more nuanced. Ruffini and Stone Island CEO Robert Triefus made the deliberate decision to accelerate the shift to DTC. That meant stepping back from wholesale — still the larger revenue contributor at the time — which naturally weighed on top-line growth.

While the underlying trends kept improving, Stone Island’s revenues grew just 4% in 2023 and decreased by 1% in 2024. At first glance, those numbers might suggest the strategy is stalling. But in reality, Stone Island has gone from generating 80% of its revenue in Europe and having almost no footprint in Asia, to deriving a third of sales from Asia in just five years. On the distribution side, over two-thirds of revenue now comes from DTC — up from just 20% in 2020.

And now, the most painful phase of the transformation — the sharp declines in wholesale — is likely behind it. From here, the shift to DTC and global expansion should begin to show more clearly in the top-line results.

You might wonder why I (Daniel) spend this much time on Stone Island if it is still only 13% of Moncler’s business.

I do so because Stone Island is a real-time case study of the same playbook Ruffini used to build Moncler. It’s a blueprint for repeatable luxury brand building.

The Near-Acquisition of Burberry

In November 2024, reports emerged suggesting that Moncler was preparing a takeover bid for the British luxury brand Burberry. Moncler promptly denied the rumors. Nevertheless, the speculation was enough to prompt both financial markets and the fashion industry to consider a broader question: Could acquisitions of other luxury brands become part of Moncler’s long-term strategy?

The primary argument in favor of a Burberry takeover was valuation. At the time the rumors surfaced, Burberry’s share price had declined by 76% from its all-time high, largely due to declining sales and weakening demand.

Stone Island was the natural extension of a proven growth story. Burberry, by contrast, would have represented a turnaround. It didn’t fit Ruffini’s established playbook. Asia already accounted for half of Burberry’s sales, and its direct-to-consumer share was on par with Moncler’s — two of the key areas where Ruffini usually finds untapped potential.

However, the luxury industry is a small and exclusive circle. And if Moncler is to evolve into Italy’s answer to LVMH, it will need a framework for managing businesses at various stages of maturity. Given Ruffini’s strategic vision and operational discipline, there’s reason to believe he could also succeed with a turnaround.

Apparently, Bernard Arnault shares that belief. The LVMH CEO reportedly supported the idea of a Burberry deal. One might wonder why the head of LVMH would involve himself in Moncler’s affairs — but in fact, he already is.

Just a month before the Burberry rumors emerged, LVMH acquired a 10% stake in Remo Ruffini’s holding company, Double R, which owns Ruffini’s shares in Moncler. This translates to an indirect 1.58% stake in Moncler for LVMH. But the real significance lies in the details of the agreement.

One clause, active for 18 months, allows Ruffini to increase his stake in Moncler — using capital provided by LVMH. If fully exercised, this would raise Ruffini’s ownership to 18.5%, and LVMH’s indirect stake to 4%.

Another clause, a priority purchase right, gives each party the option to buy the other’s stake should either choose to sell. In effect, LVMH has secured a strategic foothold, with the potential to expand its influence over time.

Could Moncler eventually become a takeover target itself? Possibly. But for now, both Ruffini and Arnault have emphasized that the deal is designed to strengthen Ruffini’s position and support his long-term vision — not signal a change in control.

Valuation

To get a better sense of Moncler’s long-term potential, I built a model that breaks down growth into store expansion and revenue per store. Going through every single assumption here might be a bit too much, though.

I walk through the full details in the podcast episode, so if you're curious about the nuts and bolts — or just want to hear me fail trying to make a spreadsheet sound interesting — feel free to check it out. And if you'd like to dig into the model yourself, you can download it for free here.

Instead, I’ll give you a high-level overview of how I approached valuing Moncler and Stone Island — and how you can think about modeling companies like this. Since both brands are at different stages, the assumptions naturally differ.

Moncler's strategic focus is on expansion in Asia and the U.S. The U.S. remains the most underdeveloped region in terms of store presence and market penetration, so I expect growth to be strongest there.

Beyond opening more stores, increasing revenue per store is a second key lever. Moncler has strong pricing power, but pricing is already at the high end of fashion. Management guided for “mid-single-digit” growth in this area, so I’ve used 6% revenue-per-store growth in the model.

Stone Island, on the other hand, is still in the early innings of its global expansion. That gives it more room to grow through new store openings and through improving store productivity — which is still far from Moncler’s level.

To follow the Moncler footsteps, by 2030, Asia should account for about 50% of Stone Island’s revenue, with the U.S. and Europe splitting the rest. I used that as a reference point to build regional growth assumptions for both store count and sales efficiency.

With the key assumptions in place, most of the heavy lifting is done. Moncler’s margins have already matured, so I’m not expecting much upside there and keep them stable in the model. If the company were to pursue acquisitions in the future, margins might dip temporarily, but I don’t see that as a near-term scenario.

From here, it’s just a matter of discounting future cash flows at 8%, which brings us to a fair value of €56 per share.

Portfolio Decision

Compared to the current share price of €61, my fair value estimate of €56 suggests a downside of around 10%. But it's worth keeping in mind that the outerwear business is cyclical — and so is Moncler's stock. The company has been riding an upward cycle over the past quarter and still trades about 30% above its late-2024 lows. With signs that this recent peak may already be behind us, a continued correction wouldn’t be surprising. Over the past five years, similar pullbacks have typically found support in the low-to-mid €40s.

I’m usually cautious when it comes to fashion companies. Trends shift quickly, and even strong brands can fall out of favor. But Moncler stands out — with an excellent CEO, the backing of LVMH, and a clear, proven playbook for building and sustaining high-end brands.

If the stock drops into the mid-€40s, I’d seriously consider adding it to the portfolio. We’ll see if it gets there — and if I can convince Shawn, who’s also a bit skeptical when it comes to fashion names.

With that said, thanks for reading, and you can listen to my full podcast with Shawn on Moncler here — we’ll see you again next week!

Weekly Update: The Intrinsic Value Portfolio

Notes

• No new additions this week; share prices for Airbnb, Alphabet, and Ulta have been fluctuating in the same range that we have already dollar-cost averaged toward
  

• The focus, for now, is on finding more companies to diversify the portfolio into and allocate larger chunks of cash toward (relative to what we’d use nibbling on our Portfolio holdings at prices slightly below our cost average)
  

• We will likely do a quarterly review soon, reflecting on our current holdings, watch list, and position sizing

Quote of the Day

"The single most important decision in evaluating a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you’ve got a very good business.”

— Warren Buffett

What Else We’re Into

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