Rumours swirl of looming Burberry takeover bid from Italy’s Moncler
- A Miss Tweed article said Bernard Arnault was ‘keen to see such a deal happen’
- Burberry’s value has declined significantly over the past 18 months
Italy’s Moncler is reportedly considering a takeover bid for struggling British luxury icon Burberry.
Fashion website Miss Tweed reported on Monday that Bernard Arnault, who runs the French conglomerate LVMH, was ‘keen to see such a deal happen’.
LVMH, whose brands include Fendi, Bulgari, and Stella McCartney, bought a 10 per cent stake in Double R, the investment vehicle of Remo Ruffini and Moncler’s biggest shareholder, in late September.
Possible suitor: Italian luxury brand Moncler is reportedly considering a takeover bid for the iconic but struggling retailer Burberry
Founded in 1952, Moncler began as a sleeping bag manufacturer but is best known for its padded jackets, which are popular with skiers and mountaineers.
Some analysts have labelled Burberry a prime acquisition target, given that its value has plummeted over the past 18 months.
The London-listed firm – famous for its trench coats and tartan check – has suffered declining turnover and profits amid a global luxury demand slump.
Burberry’s trade has been particularly badly hit in China, which has been teetering on the edge of an economic downturn.
In its latest first-quarter results covering the 13 weeks ending 29 June, the company revealed its retail revenue slumped by 22 per cent to £458million.
Comparable store sales shrank by 23 per cent in both the Americas and Asia-Pacific regions, with the latter territory suffering a 21 per cent drop in mainland China.
When Burberry revealed these results in mid-July, it also announced a profit warning, the suspension of dividends and the departure of chief executive Jonathan Akeroyd after just two years of running the brand.
Akeroyd was replaced by Joshua Schulmann, who previously ran Michael Kors, Coach, Jimmy Choo and New York department store Bergdorf Goodman.
Since then, Burberry has dropped out of the FTSE 100 Index and seen its share price slide to a 15-year low, making it more attractive for a takeover approach.
Following reports of Moncler’s alleged interest, Burberry shares jumped 8 per cent in early trading on Monday before retreating to be 6.4 per cent up at 863.6p by midday.
This is Money asked Burberry if it was in talks with Moncler, but a spokesperson for the brand said: ‘We do not comment on speculation.’
British businesses have become attractive targets in recent years due to the weaker pound and a perceived undervaluation relative to global peers.
Cybersecurity giant Darktrace, music rights investor Hipgnosis Songs Fund, and energy infrastructure provider Smart Metering Systems have all fallen into foreign private equity hands this year.
Overseas companies have also struck deals to buy investment platform Hargreaves Lansdown, packaging firm DS Smith, computer games business Keywords Studios, and Royal Mail owner International Distributions Services.
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