Burberry braced for Moncler takeover as staff given heads up

Luxury fashion house Burberry is braced to be taken over by Italian company Moncler amid staff at one of its flagship London stores being given a heads up on the deal, according to reports.

Rumours began to circulate last week that the listed brand was set for a takeover by the skiwear maker, but both firms declined to comment on the news.

However, correspondence seen by The Mail on Sunday shows that staff have been told about an offer, although details of the bid have not yet been confirmed.

The Mail added that workers had been told to keep quiet about Moncler’s bid until an official statement had been made.

A spokesperson for Moncler said the company ““does not comment on unsubstantiated rumors.” City AM has reached out to Burberry for comment.

City analysts warned that Burberry could be a takeover target earlier this year, after its share price plummeted.

Shares woe and CEO change for Burberry

Burberry has been the worst performer on the FTSE 100 so far this year and dropped out of the index in September due to its low valuation.

A combination of uncertain aesthetic direction, weak demand for luxury goods and an unexpected CEO change have worried investors.

With Burberry’s low valuation, LVMH head Bernard Arnault has reportedly been “keen” to get a deal done with the British retailer, according to specialist fashion site Miss Tweed.

LVMH had purchased a 10 per cent stake in Double R, the investment vehicle controlled by Moncler CEO Remo Ruffini’s Ruffini Partecipazioni Holding, in September this year.

Double R currently has a 15.8 per cent stake in Moncler, and the deal gave LVMH a seat on the Italian company’s board.

Analysts at RBC said they “saw the logic” of a Moncler takeover, adding that “deal valuation multiples (even at an elevated premium) appear attractive relative to historical sector transactions [and] there are opportunities for improvement at Burberry and category related synergies”.

“Burberry’s patchy product strategy track record with poorly received forays into leather goods rather than focusing on its core outerwear heritage appears to finally be on a course correction path judging by recent fashion shows and industry comments under new CEO Joshua Schulman. This makes the proposition more attractive for Moncler,” analysts added.