LVMH Moet Hennessy Louis Vuitton SA agreed to pay 2 billion euros ($2.57 billion) for 80 percent of Italian cashmere clothier Loro Piana SpA, adding a high-quality textile producer to its burgeoning portfolio of luxury brands.

The transaction, which is subject to approval by competition authorities, values Quarona, Italy-based Loro Piana at 2.7 billion euros, LVMH said today in a statement after the market closed. The family owners of the maker of $1,385 cashmere sweaters will retain a 20 percent stake in the business, Paris-based LVMH said.

Loro Piana, which competes in the fastest-growing segment of the luxury goods maker, will bring LVMH expertise in textiles from sourcing to manufacturing. The luxury market will continue to consolidate as financial investors seek to tap rising demand in fast-growing economies and large luxury groups look to benefit from scale, according to Sanford C. Bernstein analyst Mario Ortelli.

“I am convinced that our group will prove a good home in realizing the significant future potential of Loro Piana,” LVMH Chief Executive Officer Bernard Arnault said.

Loro Piana competes in the absolute, or most expensive, part of the sector, which Bain & Co. predicts will grow faster than the rest of the industry until at least 2014. Worldwide luxury sales will rise as much as 5 percent this year, excluding currency shifts, as booming demand in Southeast Asia offsets a slowdown in China and Europe, they predict.

Vuitton Slowdown

The purchase may help the company limit the impact of the slowdown at Vuitton, LVMH’s biggest brand. The maker of monogrammed totes is raising prices, using more leather as well as fewer logos in its product mix and limiting store expansion to regain its luster as sales growth slows from Barcelona to Beijing. The world’s largest luxury-goods maker in April posted its weakest fashion and leather goods sales growth since 2009.

Loro Piana is expected to generate sales of 700 million euros in 2013, according to LVMH. Earnings before interest, tax, depreciation and amortization will be 20 percent of sales, the company said.