Following speculations that Moncler may buy out Burberry, the British fashion luxury brand has experienced an 8% surge in its shares. Initially reported by Reuters, the news gained significant attention in the fashion and financial industries as investors speculated about a potential merger between the two brands. However, despite the whispers, Moncler said the company would not comment on “unsubstantiated rumors.”
While the combination of Moncler and Burberry would be major, some industry analysts noted that the timing of this conversation is surprising, considering Moncler’s recent acquisition of Stone Island. According to UBS analysts, the purchase results were “somewhat disappointing.”
“Given the ongoing work in progress for the acquisition of Stone Island by Moncler from 2020, which so far has somewhat disappointed the market, the timing might be surprising,” the UBS analysts said.
Additionally, this isn’t the only challenge that’s causing some delay. Burberry is facing struggles as it previously told investors in July to expect an operating loss in the first half of the fiscal year. During the slowdown, the brand has battled to increase demand, especially after having to raise prices under the leadership of Daniel Lee. To emphasize Burberry’s commitment to becoming “more familiar” to its audience, Chairman Gerry Murphy said the brand has a strategy focused on producing fresh offerings.
Nonetheless, outside of the increased conversations surrounding the rumored acquisition, reports have stated that the CEO of LVMH, Bernard Arnault, said he’d like to see the deal go through. LVMH recently invested in Moncler, and Arnault reportedly believes that the company has the potential to establish itself as a heavy-hitter in luxury outerwear.
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