The luxury goods industry of Europe is currently under investigation by the European Union antitrust regulators, who carried out an inspection of Gucci's Milan headquarters earlier this week. The investigation extends to several countries and companies, although the exact nature of the potential breaches and the names of the companies involved were not released. However, a source with direct knowledge of the matter revealed that the inspection of the Gucci site was aimed at possible violations of the European Union's Article 101, which prohibits agreements that restrict, prevent or distort competition within the EU and which have an effect on trade between EU member states.
Gucci's Milan headquarters, known as the Gucci Hub, is a former airplane factory in the eastern part of Italy's fashion capital. The site was opened in 2016 and serves as headquarters for its offices in the city, worldwide showrooms, photo studios and fashion show venue, according to Gucci's website. Kering, the French-listed owner of Gucci, confirmed the inspection late on Wednesday, stating that it was cooperating fully with the European Commission investigation into the industry. However, no other Italian sites had been targeted for inspection, according to the source.
Exane BNP Paribas analyst Antoine Belge said that a conversation with Kering's investor relations team had yielded little new information. According to Belge, the company understands the probe is part of an overall investigation involving many companies and that such inquiries can take a long time. He added that these investigations are not common in the luxury sector, and that Kering shares were unlikely to react significantly until there was further news. Kering shares were down 0.4% at 1320 GMT on Thursday.
If the companies are found guilty of breaking EU rules, they face fines of as much as 10% of their global turnover. A research note from Italian investment bank Equita said a potential fine of up to 10% of revenue, the worst-case scenario, would amount to 3% of Kering's market capitalisation. The Commission stated on Tuesday that the latest action was not related to other raids involving the fashion industry in the past two years.