After acquiring Louis Vuitton, the Italian company could be interested in buying Burberry to create a giant in luxury apparel.
Burberry‘s shares rose over 5% on the stock market this Monday, and it could be the perfect moment for Moncler to decide to launch a purchase offer for the British firm. Details about this offer have not yet been clarified. Moncler has even referred to these as “baseless rumors,” and the investment group Intermonte has stated that it is “a very unlikely scenario” given the complexity of relaunching a company of Burberry’s magnitude. However, sources close to the industry have indicated that Bernard Arnault, CEO and majority shareholder of Louis Vuitton, would be “excited” about this operation.
Burberry closed its fiscal year at the end of March, with profits down 34%, totaling £418 million. This result forced the brand to issue a profit warning to inform shareholders and the public that profits would not meet expectations, and it had to suspend payments to shareholders to maintain a balanced financial position.
In light of these events, Jelena Sokolova, senior equity analyst, commented that Burberry’s new strategic focus on products such as outerwear and scarves is commendable, and the company has become more pragmatic in terms of pricing in recent months. At the same time, she added that there are still complications due to its low market share in outerwear sales and the increasing competition in this area from brands like Moncler. The Italian firm’s expertise in outerwear and its marketing prowess could be a turning point for Burberry in regaining the strength it once had in its early days.
After concluding the first six months of 2024, with a 24% increase in its net income and an 8% rise in sales, there is no doubt that Moncler is managing to withstand the decline in sales and profitability that many other luxury brands are experiencing.
