Shares in the quintessential British luxury retailer Burberry saw a notable uplift this morning amidst speculations that the fashion icon might become a takeover target for Moncler, the Italian high-end outerwear label.
The surge in Burberry's market value came following an initial seven per cent spike in early trading, subsequently stabilising to a robust four per cent increase, as reported by .
Industry whispers, amplified by specialist fashion outlet Miss Tweed, suggest Bernard Arnault of LVMH is "keen" on brokering a deal with the º£½ÇÊÓƵ-based fashion heavyweight, as indicated by various insider sources.
Back in September, LVMH procured a 10 per cent interest in Double R, orchestrated by Moncler's chief Remo Ruffini through Ruffini Partecipazioni Holding, thus aligning closer with Moncler with LVMH gaining a seat on their board after this strategic move.
Double R currently commands a 15.8 per cent shareholding in Moncler, bolstering LVMH's influence within the Italian firm.
Why is Burberry a takeover target?
Speculations regarding Burberry becoming an acquisition prospect emerged earlier within the finance community after its shares took a nosedive.
Burberry found itself as the FTSE 100's least buoyant entity this year, eventually losing its spot in the index come September, attributed to its depreciating market worth.
A fusion of an unclear creative trajectory, reduced thirst for opulent merchandise, coupled with an unforeseen executive reshuffle, has unsettled shareholders.
Sasha Kachanova, investment manager at Abrdn, confided to The Telegraph: "Burberry remains a potential takeover target, particularly at its current valuation."
"As the sole British brand of scale operating independently a rarity in the luxury industry it boasts a rich heritage and the opportunity to enhance its iconic product lines and accessories."
Burberry stands to gain from the recent announcement of a stimulus package by the Chinese Government. The lacklustre demand from Chinese consumers for luxury items has significantly impacted the global high-end goods market.
Over the past month, Burberry's share price has seen an increase of just over one-third.
A representative for Moncler stated the company "does not comment on unsubstantiated rumors."
In a similar vein, Burberry declined to offer any comments.
