Companies · Luxury & Fashion

Many listed luxury and fashion houses are controlled by a founding family through a holding company. Under the EU Market Abuse Regulation, a legal person directly or indirectly controlled by a manager, or whose managerial responsibilities a manager discharges, is a closely associated person, so a family holding's purchases are disclosed as managers' transactions. Such purchases can serve control, succession or financing as well as a view on value.

What research says about ownership

We found no study specific to the luxury sector. Fidrmuc, Goergen and Renneboog (2006, Journal of Finance), working on UK directors' trades, find that ownership by directors and by outside shareholders affects the abnormal returns that follow a trade, and that trades preceded by news on mergers and acquisitions or CEO replacements contain significantly less information.

Reading these filings

A regular purchase programme by a controlling holding resembles the predictable trades that Cohen, Malloy and Pomorski (2012, Journal of Finance) classify as routine and find uninformative, although their study covers US insiders, not holdings. An isolated purchase by an executive outside the family, after a fall in the share price, is the case the general evidence treats as more telling.