- Adopted stricter sanctions compliance and monitoring in December
- Move follows allegations of EU sanctions violations in Russia
- Cucinelli has denied the allegations
- Cucinelli reaffirmed it is fully compliant with EU sanctions
MILAN, April 24 (Reuters) - Luxury group Brunello Cucinelli has strengthened its controls to monitor compliance with European Union sanctions on Russia, its 2025 annual report shows, following allegations last year that it breached export restrictions.
In the report, approved by shareholders on Thursday, the Italian cashmere maker said its board adopted a "strengthened trade compliance procedure" on December 10, after commissioning a risk assessment and gap analysis by an external law firm.
The procedure applies to both wholesale and retail sales channels and is designed to reinforce controls around sanctions screening, re-export risks and potential circumvention, the company said in the report.
Asked for a comment, Cucinelli reaffirmed that it is fully compliant with EU sanctions related to operations in the Russian market and it has further strengthened its trade compliance procedures.
The disclosure comes after U.S. short seller Morpheus Research alleged in September that the brand continued selling luxury goods in Russia in violation of EU sanctions, triggering a sharp selloff in the stock. Cucinelli has repeatedly denied any wrongdoing.
"The company promptly and firmly confirmed its full compliance with European Union sanctions regulations with regard to its operations in the Russian market," it said.
Cucinelli maintains a wholly owned Russian subsidiary, which remains consolidated in its accounts. It has previously said Russia accounts for less than 2% of global revenue.
The company said it conducted impairment testing on the unit due to geopolitical risks but recorded no additional write-downs in 2025.
Reporting by Lisa Jucca and Elisa Anzolin. Editing by Mark Potter
Source: Reuters