Yesterday, news of luxury grapes sent shares in Burberry and Essilor Luxottica rising amid speculation that two major industry deals were in the works.
The first suggests that Italian winter clothing giant Moncler is eyeing a takeover of Burberry, the British fashion house known for its striped trench coats.
Burberry has been in financial trouble since luxury spending rebounded after the pandemic, but its spending has remained flat and it has issued multiple profit warnings in recent months.
The speculation was first reported by the prestigious news outlet Miss Tweed, which banned LVMH patriarch Bernard Arnault from speaking to staff earlier this year.
The company’s brand value has plummeted by $2 billion, or 42%, since last year, according to Kantar’s annual BrandZ list released last month.
Burberry’s woes aren’t just due to the pace of recovery in the luxury goods industry. In July, the British company ousted former CEO Jonathan Aykroyd, along with former Michael Kors executive Joshua Shulman, in hopes of rebuilding.
Burberry is currently rethinking its strategy by leveraging its strengths and adjusting its pricing.
If the deal goes through, it would be great for both brands, said Elena Sokolova, senior equity analyst at Morningstar.
“Moncler is set to win a promising contract with significant upside. Burberry’s new strategic focus on iconic products such as outerwear and scarves is commendable, and the company “We’re becoming more realistic about pricing,” she said.
Meanwhile, “Moncler’s outerwear expertise and its marketing capabilities could be a game-changer for Burberry, returning the brand to its core strengths.”
Moncler denied the speculation, with a spokesperson adding: “We do not comment on unsubstantiated rumors.” A representative for Burberry issued a similar statement when asked for comment.
Burberry shares rose as much as 8% during the day on Monday and were up 6% at market close.
Elsewhere in the world of luxury fashion, Bloomberg reported “new buzz” surrounding tech giant Meta’s potential purchase of a 5% stake in Essilor Luxottica, the eyewear company behind Ray-Ban and Oakley.
The two companies partnered in 2019 to develop glasses equipped with Meta’s AI assistant and a small camera on the rim. In September, the companies announced an expanded partnership to redefine “the potential of wearables in consumers’ lives.”
The head of EssilorLuxottica previously hinted that Meta was considering investing in the company. Meta’s Mark Zuckerberg also spoke of making a “symbolic” investment in the company as a “great gesture” to solidify the partnership.
story continues
