Brunello Cucinelli Denies Russia Business Irregularities Amid Share Slump

Italian luxury fashion group Brunello Cucinelli faced sharp stock declines and trading suspension after allegations by Morpheus Research that it misled shareholders about its operations in Russia, supposedly violating EU sanctions. Morpheus claimed that Cucinelli continued to operate multiple stores in Moscow, selling a broad range of high-end products and using the market to offload excess inventory, which could harm the brand's exclusivity. In response, Cucinelli firmly denied these claims, stating it fully complies with EU regulations, highlighting that exports to Russia have significantly dropped from €16 million in 2021 to €5 million in 2024, representing about 2% of total revenue. The company clarified that local showroom staff provide customer service using inventory shipped before sanctions or within legal limits, and it has not received any customs notifications regarding compliance issues. Cucinelli emphasized that its financial data refutes the allegations of inventory clearance via the Russian market and announced it is considering legal action to protect its reputation and stakeholder interests. Despite the denials, the controversy caused a substantial share price drop, reflecting investor concerns over the company's Russian market dealings and brand positioning.