MILAN, Italy — French luxury conglomerate LVMH has purchased a majority stake in the Italian luxury wool and cashmere company Loro Piana for €2 billion ($2.57 billion at current exchange rates). The Loro Piana brothers, Sergio and Pier Luigi, will retain the remaining 20 percent stake in the company as well as operational management.
"By joining LVMH, a group built around a unique set of other historic Maisons, Loro Piana will benefit from exceptional synergies while preserving its traditional heritage," said Sergio and Pier Luigi Loro Piana in a statement.
"Loro Piana is an exceptionally rare maison, rare in the unique quality and craftsmanship in its products, not least in cashmere and fine textiles, but also in the unbroken heritage and careful family husbandry over six generations. I am very pleased that Sergio and Pier Luigi Loro Piana believe that our group is best able to ensure the future of the house of Loro Piana... and I am convinced that our group will prove a good home in realising the significant future potential of Loro Piana," added LVMH chairman and chief executive Bernard Arnault in a statement.
Based in the village of Quarona, where its mills are located, Loro Piana was founded in 1924 by Pietro Loro Piana as a local wool merchant. It wasn’t until after World War II that the founder’s nephew, Franco Loro Piana, took control of the company and introduced it to international markets. Now in its sixth generation of family ownership, Loro Piana trades on ultra luxurious wool and cashmere, sourced from around the globe in as faraway places as Australia, New Zealand and the Himalayas.
Its customers include high-end suit makers like Brioni and, less publically, mid-range retailers like Bloomingdale’s and J. Crew. The company also has its own line of conservatively cut sweaters and coats that retail for up to £12,000. According to Reuters, the company is expected to grow sales over 10 percent in 2013 over last year, when sales exceeded $815 million, including increased business in its native Italy despite general economic malaise in the country and wider European markets.
In May, Loro Piana announced that it would purchase 60 percent of Sanin SA, an Argentinian producer of vicuna wool, a prized and rare and extremely soft material shorn from the wild, deer-like vicunas which roam the Andes Mountains, in a move to protect the once-endangered species. A focus on the very highest end has shielded the company from the slowdown seen in similar luxury brands and manufacturers, particularly in sales from Asia, where Loro Piana opened its first shop in Hong Kong in 2005.
Disclosure: LVMH is part of a consortium of investors which has a minority stake in The Business of Fashion.