Cucinelli shares fall for second day after short-seller report

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 its Russian business — a claim the company denied.

Shares in the Italian cashmere brand dropped to 77.6 euros, their lowest level since December 2023, before paring losses to trade down 3.5% at 82.1 euros around 8:30 a.m. GMT.

The company had previously been seen as relatively shielded from the current slowdown in the luxury goods sector, thanks to its high-end positioning. However, the stock is now down nearly 50% from its record high in February.

Short interest jumps

Morpheus Research, which said it has shorted the group’s shares, joins other funds betting against Brunello Cucinelli. The stock lost 17% on Thursday following the release of the report.

Shorting involves borrowing a company’s shares to sell them, to buy them back at a lower price to profit from the difference.

The estimated short interest in Brunello Cucinelli — the portion 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 claimed that the company had continued serving Russian clients despite European Union sanctions on luxury goods. The company responded that the products shipped to Russia were “within the limits set by the European Union.”

“Brunello Cucinelli needs to start damage limitation asap to protect its reputation with customers and investors alike,” Bernstein analysts said on Friday.

Reuters could not immediately verify the claims.

The allegations come as a fresh blow to Italy’s high-end fashion industry, which is already grappling with the impact of U.S. import tariffs and investigations linked to worker exploitation at home.