Slalom to the Finish: Carlyle’s Exit from Moncler Harvard Case Solution & Analysis

Slalom to the Finish: Carlyle’s Exit from Moncler Case Study Solution

Introduction

Moncler is an old brand, and is also famous for its stylish down jackets and sportswear. It is also ac credited for inventing the down-filled ski jacket which it has been supplying to many international teams around the world as it did in the French Winter Olympics.On the other hand, the company has been managing the brands of Henry Cotton’s, Coast Webber& Ahaus,and Marina Yachting. This has allowed it to focus on creating new business line in the same market.

The company has been producing sportswear for players of both genders. However, the company only has one store in Italy that makes around 76% of the company’s revenues. The market of the company was not diversified much to reduce the risks, and leverage the investment of the company. The aim and objective of Moncler was to approach the international market, and expand the product line of company in to all kinds of summer and winter sportswear to be presented worldwide.

It can be determined that there are many complications and complexities in the market due to the increased competition that has driven the need for better brand recognition, quality, and customer base. However, the company’s initial aim for financing the first vision of expansion of product line would require around considerable capital to invest. So, in this regard private equity option was exercised, and company got financing to meet with the vision.

The company’s brand is 50 years old and has good recognition in the market.Its vision is to expand from casual sportswear to contemporary urban outerwear collection. So, the vision of company was clearly globalization of company’s products by adding more products in the market. This approach of the company was known as the “global down jacket strategy”.

The vision of the company was clear but the strategy was very important for the company to increase its global footprint. However, the investment of Carlyle in the company provided good capital to carry out the operations, and increase the products for urban collection.

After the capital investment of Carlyle, the company opened 33 stores in 2 years in many international cities. It successfully leveraged the investment, created many opportunities for itself in the market. However, the financing from private equity was to be ended since company also had the vision to list on the stock exchange like other large brands has listed on the stock exchanges.

It was a major concern for the company that how it should manage all these matters. Since, there were two major problems that were continuously disturbing the going concern of the company. One was the company’s vision to expand, grow, and IPO, and second was the exit strategy for the private equity financer.

The equity financer and company had three potential options for exit from the financing. Each option had its own benefits and drawbacks. As all the options had positive and long-term effects on the company, and private equity firm so, it was a major problem for the company to point out how should it deal with the existing problem, and what would be best in favor of the company.

So, company had three potential options; the first option was the IPO option which is also known as initial public offering, and the trade sale option, and third was the dual track process option. Each option had different pros and cons. So, the important matter is proper selection of the options.

Background

The Moncler is known as Monastir de Clermont which is a mountain village near to Grenoble, France. The brand was created in 1952 since then the famous jackets of the company have been selling out in the market.  The brands of the company relating to casual sportswear were very famous in the market.

However, changing dynamics of the market, and changing customer dynamic trends have emphasized on the diversification of product line that could leverage the investment, and increase the customer base, and help company to manage its market share.

The company’s major problem is deciding with the exist options. There are three options: one is that company should perform initial public offering (IPO), and second is the trade sales option and third is the dual track process. Each option has its own pros and cons.

The initial public offering was supposed to be done over other options. But, the matter is that if the decision is already taken for the IPO of the company. Then, why company has focused on the other two options. Either it has doubt in the pricing of the IPO, or it has more attention to other options due to their feasibility.

As the company has to focus on its vision, future growth and expansion. So, which one is best option for the company to focus, and which one is important for the company in the future that would help. It can be determined that the final decision would be taken based on the analysis presented in the report............

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Slalom to the Finish: Carlyle’s Exit from Moncler

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