News on the luxury grapevine lifted shares of Burberry and EssilorLuxottica yesterday amid speculation that two major industry deals are underway.
The first suggests Moncler, the Italian winter wear giant, is eyeing a takeover of Burberry, the British fashion house known for its striped trench coats.
Burberry has been riddled with financial problems since the post-pandemic recovery of luxury spending, which has fallen flat and prompted multiple profit warnings in recent months.
The speculation was first reported by Miss Tweed, a luxury news outlet that LVMH patriarch Bernard Arnault banned his staff from talking to earlier this year.
The company’s brand value has plummeted 42% by $2 billion since last year, according to Kantar’s annual BrandZ list released last month.
The snail's pace of the luxury industry rebound isn’t the only factor to blame for Burberry’s struggles. In July, the British company ousted its former CEO Jonathan Akeroyd with Joshua Schulman, a former Michael Kors executive, hoping for a turnaround.
Burberry is now refocusing its strategy by owning its strengths and tweaking its pricing.
If the deal goes through at all, it would be great for both brands, says Jelena Sokolova, senior equity analyst at Morningstar.
“Moncler would be securing a promising deal with significant upside. Burberry's new strategic focus on iconic products like outerwear and scarves is commendable, and the company is getting more pragmatic in terms of pricing,” she said.
Meanwhile, “Moncler’s expertise in outerwear and its marketing prowess could be a game-changer for Burberry, steering the brand back to its core strengths.”
Moncler dismissed the speculation, with a spokesperson adding that the company “does not comment on unsubstantiated rumors." A Burberry representative mirrored the same statement when approached for comment.
Burberry’s shares were up as much as 8% during the day on Monday and was up 6% at market close.
Meta’s eyes on EssilorLuxottica
Elsewhere in the world of luxury fashion, Bloomberg reported “renewed chatter” around tech giant Meta potentially buying a 5% stake in EssilorLuxottica, the eyewear company behind Ray-Ban and Oakley.
The two companies joined forces in 2019 to create a pair of glasses powered by Meta’s AI assistant and with a tiny camera on the rim. In September, they announced extending their partnership to redefine “the potential for wearables in consumers’ lives.”
EssilorLuxottica’s chief had previously hinted that Meta was considering investing in the company. Meta’s Mark Zuckerberg has also spoken about making a “symbolic” investment in the company as a “nice gesture” to solidify the partnership.
“We have the opportunity to turn glasses into the next major technology platform and make it fashionable in the process,” Meta CEO Zuckerberg said in a statement announcing the long-term partnership.
Meta, which has already dabbled in smart eyewear, is building on its current Ray-Ban products, allowing users to live-stream what they see through their glasses via Facebook or Instagram.
The Ray-Ban smart glasses have been a huge growth driver for the Franco-Italian company, which sees its contraptions “replace most other technology devices” someday, CEO Francesco Milleri’s interview with the Financial Times.
EssilorLuxottica shares were up 3% at market close on Monday.
Meta and EssilorLuxottica representatives didn’t immediately return Fortune’s request for comment.
