MILAN (Reuters) -Shares in Brunello Cucinelli fell as much as 9% in early Friday trade, extending Thursday’s losses after short-seller Morpheus Research accused the company of misleading investors about Russian business, which the company denied.
Shares in the Italian cashmere brand dropped to 77.6 euros, their lowest since December 2023, before paring losses to trade down 3.5% at 82.1 euros around 0830 GMT.
The company had been seen relatively shielded from the current slowdown in the luxury goods sector, thanks to its high-end positioning, but the stock is now down almost half from its record high in February.
SHORT INTEREST JUMPS
Morpheus Research, which said it has shorted the group shares, has joined other funds betting against Brunello Cucinelli. The shares lost 17% on Thursday following its report.
Shorting involves borrowing a company’s shares in order to sell them, with the aim of buying them back at a lower price and making a profit on the difference.
The estimated short interest in Brunello Cucinelli – the part of outstanding shares held by short sellers – rose to over 10% this week, up sharply from around 4% in early August, according to data from market analytics firm ORTEX.
The Morpheus Research report said the company had kept serving Russian clients despite European Union sanctions on luxury goods. The company said the products shipped to Russia were “within the limits set by the European Union”.
Reuters could not immediately verify the claims.
The allegations come as a new blow to Italy’s high-end fashion industry, already grappling with the fallout from U.S. import tariffs, and investigations linked to worker exploitation at home.
(Reporting by Elisa Anzolin in Milan and Tassilo Hummel in Paris. Editing by Mark Potter)
