After European Union antitrust inspectors visited Gucci’s Milan headquarters this week as part of an inquiry involving many nations and businesses, the region’s booming luxury goods market came under scrutiny this week.
The European Commission announced on Tuesday that antitrust authorities had searched fashion companies in many EU nations, but it did not identify the companies or identify the suspected violations it was looking into.
According to Reuters, EU antitrust officials were investigating a Gucci plant in Milan, one of the world’s fashion capitals, as part of the investigation.
According to a person with first-hand knowledge of the situation, the inspection of the Gucci website was conducted to look for potential breaches of Article 101 of the European Union.
The clause forbids agreements that have an impact on trade between EU member states and that limit, thwart, or distort competition within the EU.
The Gucci Milan headquarters, a former airplane factory in the eastern section of Italy’s fashion metropolis, was named as the investigation’s focal point by the source.
According to Gucci’s website, the Gucci Hub was established in 2016 and serves as the company’s headquarters for its offices in the city, global showrooms, photo studios, and venue for fashion shows.
Late on Wednesday, Gucci’s French-listed owner Kering acknowledged the inspection and added that it was fully assisting the European Commission’s inquiry into the sector.
The insider also said that no other Italian locations had been singled out for scrutiny.
A spokesman for Kering said the business had nothing to add to its statement from Wednesday. Rival LVMH likewise refuses to respond to questions about the raids.
A conversation with Kering’s investor relations team, according to Exane BNP Paribas analyst Antoine Belge, produced little fresh information.
According to Belge, the business is aware that the investigation is a component of a larger inquiry involving numerous companies and that such investigations can take a while.
“These investigations are not common in luxury,” he said, adding that Kering shares were unlikely to react significantly until there was further news.
Companies that violate EU regulations risk fines of up to 10% of their global turnover.
According to a research report from the Italian investment firm Equita, under the worst-case scenario, a potential fine of up to 10% of revenue would equal 3% of Kering’s market value.
On Tuesday, the Commission declared that the most recent action had nothing to do with other fashion-related raids that had taken place over the previous two years.
(Adapted from GulfNews.com)
Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy
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