Sales may be way up for Kering brands, thanks, in large part to Alessandro Michele’s Gucci, but legal troubles seem to be closing in on the Paris-based conglomerate, according to a number of recent reports. In addition to Gucci being the latest fashion brand to come under the microscope of Italian tax authorities in connection with claims of tax evasion, the brand’s parent company may soon be on the receiving end of a class action lawsuit over “concerns [that] Kering and certain of its officers and/or directors [may] have engaged in securities fraud or other unlawful business practices” in connection with that tax scandal.
According to an alert sent out Pomerantz LLP, “On December 2, 2017, Reuters reported that Italian tax police had visited the offices of Guccio Gucci SpA (“Gucci”), a subsidiary of Kering, in connection with a tax evasion probe.” The New York-based law firm, which is known for its initiation of class action lawsuits on behalf of “defrauded investors and consumers,” further stated, “On this news, Kering’s American Depositary Receipt price fell $0.55, or 1.22%, to close at $44.15 on December 4, 2017, the following trading day.”
As a result of the pending tax evasion probe and the subsequent drop in Kering stock prices, Pomerantz – which is just one of several law firms shopping around for plaintiffs to take on Kering – states that it is “currently investigating claims on behalf of investors of Kering,” which is traded on the Euronext NV European stock exchange, and is actively soliciting individuals that would like to act as lead plaintiffs “on behalf of a class of investors who purchased or acquired Kering securities.”
Pomerantz has represented plaintiffs in class action suits against Etsy, after “numerous news outlets, including Bloomberg and the Associated Press, reported that Gil Luria, an equity analyst at Wedbush Securities, issued a note downgrading Etsy to ‘Underperform’ [in May 2015]. In the note, Luria alleged that more than 5 percent of merchandise sold on Etsy’s platform were either counterfeit or violated trademark protections.” It has also initiated matters against Skechers, J. Jill, and Lululemon, among others.
There is no guarantee that the firm’s investigation and call for plaintiffs will definitely result in litigation, but there is certainly a chance, should any current stockholders take the bait.
Neither Kering nor Pomerantz LLP responded to a request for comment.