LVMH to Buy Control of Loro Piana for $2.6 Billion

A fringed scarf, $4,195. A knitted sweater, $28,995. A “St. Petersburg” coat, $46,500.

These are the prices that customers of Loro Piana are willing to pay for the Italian fabric company’s fine wares. On Monday, a buyer agreed to pay billions for the company itself.

LVMH Moët Hennessy Louis Vuitton, the French luxury goods giant, agreed on Monday to pay 2 billion euros, or about $2.6 billion, for an 80 percent stake in Loro Piana, adding a storied name to its portfolio of brands. The deal values the company, which is based in Quarona, Italy, at 2.7 billion euros.

Under the terms of the deal, Sergio and Pier Luigi Loro Piana, the co-chief executives who are great-great-grandchildren of the cloth merchant Giacomo Loro Piana, will continue to run the Italian company. The family will retain a 20 percent stake.

“LVMH has proved that it respects and nurtures family businesses and is most likely to respect the values and traditions of our Maison,” the brothers said in a statement.

The transaction is the latest sign that luxury brands remain attractive to deal makers amid a slow economy. While mass market retailers have suffered since the recession, the high end has been resilient, with wealthy customers willing to pay big for luxury products.

To its fans, Loro Piana is no ordinary luxury retailer. The company was officially founded in 1924, but it can trace its origins back to 1812, the date of a document in Giacomo Loro Piana’s name.

For generations, the family business produced fabrics, gaining renown for its cashmere and fine wool. But starting in the 1990s, after making the training jackets for the Italian equestrian team at the 1992 Olympic Games in Barcelona, it began making sweaters, shawls and other luxury garments.

Some of its most sumptuous items are made with fabric of the vicuna, a South American relative of the llama that Loro Piana says it helped save from extinction. Those products can sell for tens of thousands of dollars; sweaters from other fabrics are more modestly priced around $1,000.

Such brands are attractive takeover targets because of the “scarcity” they have cultivated, said David A. Schick, an analyst with Stifel Nicolaus.

“Companies that stand for something, where the luxury brand has been thoughtfully curated over time, where they haven’t overreached what the brand stands for, those are always very interesting,” Mr. Schick said. “They have built barriers to entry; they have built competitive advantages through their patience.”

With its goods available in more than 130 boutiques around the world, Loro Piana hopes to sell a particular way of life.

Sergio Loro Piana once described his company’s products this way: “These are not the needs of a Boston fireman, who wouldn’t wear a cashmere coat if you gave it to him, but needs that I have, that my customers have.”

The success of the acquisition will hinge on whether top luxury brands retain their appeal. Loro Piana is expected to generated sale of 700 million euros this year, LVMH said.

Bernard Arnault, the chairman of LVMH, said he was “very pleased” that the Loro Piana brothers agreed to the deal, which is subject to regulatory approval.

“Indeed we share the same values: family and craftsmanship allied to the tireless pursuit of quality,” Mr. Arnault said in a statement. “I am convinced that our group will prove a good home.”