What: Brunello Cucinelli’s CEO has defended the brand’s Russian operations against short seller allegations, insisting all activities comply with EU sanctions and that the company is adapting to new market realities.

Why it is important: This case highlights how luxury brands are navigating sanctions, regulatory scrutiny, and shifting consumer behaviour by adapting distribution, pricing, and compliance strategies.

Brunello Cucinelli’s chief executive has publicly rejected claims from short sellers that the brand is violating EU sanctions by continuing to sell luxury goods in Russia, clarifying that its boutiques are closed and only legal, price-capped sales are conducted through its Moscow showroom. The company maintains that all shipments to Russia comply with the €300 EU limit, with any higher-value sales limited to residual stock delivered before the war. Cucinelli’s approach—keeping its local structure intact to support employees and honour leases—reflects the broader dilemma facing Western luxury brands in Russia: balancing compliance with sanctions and maintaining a presence in a key market. The brand’s defence comes amid allegations of inventory “dumping” and triangulation, which Cucinelli denies, citing regular internal and customs checks. The company’s Russian revenue has dropped from 9% to 2% of group sales since 2021, and exports have fallen from €16 million to €5 million. This episode underscores the complexities of luxury retail in a fragmented regulatory environment and the need for transparent, adaptive strategies.

IADS Notes: Brunello Cucinelli’s response to short seller allegations over its Russian operations comes at a time when luxury brands are navigating a complex landscape of sanctions, shifting consumer behaviour, and heightened scrutiny. As reported by the Financial Times in January 2025, wealthy Russians have continued to access luxury goods through sophisticated personal shopping networks, exposing the limitations of sanctions enforcement and prompting brands to adapt their distribution strategies. Despite these challenges, Cucinelli has maintained its focus on exclusive, experiential retail, as highlighted by Fashion Network in December 2024, reinforcing its quiet luxury positioning through initiatives like Casa Cucinelli. The broader luxury sector, according to Vogue Business in October 2024, is experiencing a downturn driven by low consumer confidence in China and global economic uncertainties, though Cucinelli has shown relative resilience. Meanwhile, the Financial Times in August 2025 notes a significant drop in tourist spending in Europe and Japan, forcing brands to rethink their market approaches. Inside Retail in August 2025 further underscores how EU tariffs and sanctions are reshaping luxury pricing and fueling the rise of the resale market, with brands increasingly introducing lower-priced products to maintain accessibility and compliance.

Brunello Cucinelli chief hits back at short seller over alleged sanction breach