Shares in Burberry jumped nearly 5 percent on Monday, November 4, according to reports that Italian outerwear maker Moncler may be eyeing a bid for the iconic UK apparel company.
Moncler shares were down over 2 percent on the news.
According to the report published in Paris-based Miss Tweed, the LVMH-backed Moncler could make an offer for Burberry to create an outdoor apparel conglomerate.
“Moncler does not comment on unsubstantiated rumors,” the Italian company said when contacted by both the Wall Street Journal and Reuters. Burberry also declined to comment on what it called “speculation.”
Reuters reported that Italian broker Intermonte said a possible deal between the two luxury groups is an “unlikely scenario,” as Moncler would see the relaunch of such a large company as Burberry as risky.
According to Miss Tweed, Bernard Arnault, chief executive of LVMH, would be keen to see such a deal happen. In September, LVMH reportedly said it was investing in Moncler in a transaction that would give it a seat on the Italian group’s board.
Moncler and Burberry are both facing a downturn in demand for high-end goods. WSJ said Burberry is also exposed to China, which fueled the industry’s fortunes for years but now faces economic malaise, prompting shoppers to curtail luxury purchases.
As for Moncler, the company reported a 3 percent revenue decline for the third quarter, citing lower demand in Asia and Europe. The Italian company was one of a few luxury names that had, until recently, managed to weather woes in Asia.
As reported previously by SGB Media, Moncler’s first-half revenues were up 11 percent in constant-currency terms through June 30, 2024, so the Q3 trends were a clear shift in fortunes.
Third-quarter revenues in Asia were down by 2 percent for Moncler in constant-currency terms, reportedly due to more challenging macroeconomic conditions affecting consumer confidence and a normalization of tourist flows into Japan. Nine-month revenues were up 11 percent in constant-currency terms.
Moncler’s brand EMEA revenues decreased by 3 percent in constant-currency terms in the third quarter, primarily due to a decline in the wholesale channel. DTC was said to be impacted by a deceleration in tourist inflows and in the performance of the direct online channel.
As of September 30, the network of Moncler mono-brand boutiques comprised 285 directly operated stores, a net increase of eight units compared to June 30, 2024, including the opening of Wuhan SKP and Suzhou Matro in China and the relocation of the Royal Hawaiian store in Honolulu. The Moncler brand also operated 56 Wholesale shop-in-shops.
In late 2022, Burberry appointed Daniel Lee as its creative director, but there are still no signs of improvement, as the brand continues to lose consumer appeal.
Image courtesy Burberry
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For additional Moncler coverage from SGB Media, see below.
EXEC: Moncler S.p.A. Sees Consumer Confidence, Weaker Q3 Weigh on YTD Results
EXEC: Moncler Group Posts Double-Digit Sales Growth in First Half
