British luxury fashion house Burberry witnessed a remarkable surge in its share price following reports of a potential takeover bid from Italian rival Moncler. The speculation, initially reported by specialist fashion website Miss Tweed, suggests Moncler’s interest in creating an ‘outdoor specialist giant’ through the acquisition.
The news sparked immediate market reaction, with Burberry shares jumping more than 7 per cent in early London trading before settling at a 5.8 per cent gain. The report highlighted that Bernard Arnault, chief executive of luxury conglomerate LVMH, which recently acquired a 10 per cent stake in Moncler’s investment vehicle Double R, is reportedly supportive of such a deal.
Burberry’s market position has weakened considerably over the past year, with shares plummeting 48 per cent, resulting in its removal from the FTSE 100 to the FTSE 250. The company’s current market valuation stands at £3.04 billion, making it potentially attractive for acquisition.
Industry analysts view the potential merger positively. Jelena Sokolova, senior equity analyst at Morningstar, emphasises that Moncler’s expertise in outerwear could prove transformative for Burberry, helping the British brand refocus on its heritage strengths. The timing appears opportune, as Burberry’s new chief executive Joshua Schulman, formerly of Michael Kors and Coach, prepares to unveil his strategy for the brand.
HSBC analysts express confidence in Schulman’s ability to revive the brand, suggesting investors might show patience as he implements his turnaround strategy. The luxury sector’s global slowdown has affected numerous premium brands, but Burberry’s strategic shift towards iconic products and pragmatic pricing approaches could signal a promising future, particularly under new ownership.
While both Moncler and Burberry have declined to comment on the speculation, the market’s reaction reflects growing investor confidence in the potential combination of these two heritage brands. The upcoming interim trading update from Burberry will be closely watched for any hints regarding the takeover rumours and strategic direction.
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