Italian fashion house Brunello Cucinelli’s shares plummeted over 17% on Thursday after a London-based short seller accused the company of breaching European Union sanctions by continuing to operate in Russia. The sharp decline marked the company’s steepest single-day drop since its initial public offering in 2012.
According to Morpheus Research, the short seller, Brunello Cucinelli has been “misleading shareholders” and running Moscow boutiques in violation of EU sanctions, which have banned exports to Russia of luxury goods worth over €300 since 2022. Morpheus claims to have sent secret shoppers to some of Cucinelli’s Moscow stores in August and September 2025, who confirmed that the stores were open and selling multi-thousand-euro luxury goods. The firm also noted that the tags on many of these garments revealed that they had been manufactured in Italy in either 2024 or 2025, years after the EU imposed its luxury-goods ban.
The allegations follow earlier claims by hedge fund Pertento Partners, which alleged in the summer that three Russian Cucinelli stores were selling items “at prices several times above the limits set by sanctions.” However, Cucinelli’s chief executive Luca Lisandroni denied any wrongdoing, stating that the luxury group continues to sell a limited range of items in Russia in line with EU regulations.
The incident highlights the challenges faced by Italian companies operating in Russia, with only about 30% of Italian firms having left the Russian market in the past three years, according to Vincenzo Trani, the head of the Italian-Russian Chamber of Commerce. Trani noted that those who exited were mainly smaller firms, state-owned enterprises, or businesses hit directly by Western sanctions.
The significant drop in Brunello Cucinelli’s shares serves as a reminder of the importance of complying with international sanctions and the potential consequences of non-compliance. As the company navigates this situation, it remains to be seen how it will impact its operations and reputation in the long term.