Brunello Cucinelli Faces Scrutiny Over Russian Operations,Shares Plummet
Italian luxury brand Brunello Cucinelli experienced a meaningful stock drop Thursday after allegations surfaced regarding its continued operations in Russia,potentially violating EU sanctions. Trading in the company’s shares was temporarily suspended on the Milan stock exchange before resuming with a decline of over 17%.
The scrutiny began with an examination by investment fund Pertento, which alleged a breach of luxury goods sanctions. London-based Morpheus Research subsequently released a report detailing its findings, claiming cucinelli “blatantly disregarded European law” by continuing to sell high-value items within Russia.
The EU imposed a ban on the export of luxury goods exceeding 300 euros to Russia following the 2022 invasion of Ukraine. Despite this, Morpheus Research alleges Cucinelli’s Russian subsidiary generated approximately 15 million euros in revenue during both 2023 and 2024. The report claims Cucinelli boutiques remained open in Moscow this summer, offering recently manufactured Italian goods priced in the thousands of euros.
Morpheus Research also criticized what it described as “contradictory and misleading statements” from Cucinelli representatives regarding its Russian operations, specifically concerning the status of its stores and the nature of services provided.
Cucinelli has vehemently denied any wrongdoing,asserting it is in “full compliance” with EU sanctions. The company stated its staff provides assistance services to customers within its showrooms, utilizing products legally shipped to Russia within EU limits and remaining inventory delivered before the sanctions were implemented. Cucinelli further explained that maintaining a local presence allows it to cover salaries and rent,and that inspections by the Italian Customs Agency have confirmed its adherence to procedures.
Both Pertento and Morpheus Research have disclosed that they hold short positions in Cucinelli shares,meaning they profit from a decline in the company’s stock value. Cucinelli stated it is considering legal action in response to the allegations.
