Shares in Burberry have risen by 6% after reports suggested Italian rival Moncler may be considering a bid for the British luxury fashion brand.

The spike came after the trade journal Miss Tweed reported that Moncler, which also owns Stone Island, was looking at a potential acquisition of Burberry, which has struggled as demand for luxury goods has fallen.

The journal cited several industry sources who said the head of the luxury goods conglomerate LVMH, an investor in Moncler, was keen to get a deal done with the British retailer.

LVMH, whose portfolio of high-end brands includes Louis Vuitton, Dior, Fendi and Celine, has a 15.8% stake in Double R, the investment vehicle that owns Moncler. That gives LVMH a seat on the Italian fashion brand’s board.

Moncler told the Guardian it did not comment on “unsubstantiated rumours”.

Shares in Burberry rose as high as 872p in early trading on Monday, up more than 7% on Friday’s close of 812p. The stock closed up 6% at 861p, valuing it at £3.1bn.

A number of analysts identified Burberry as a potential takeover target earlier this year after the company’s share price fell by 40% over a 12-month period. This meant it dropped out of the FTSE 100 index for the first time in 15 years.

The drop in the share price and two profit warnings this year led to the abrupt exit of Jonathan Akeroyd in July after nearly three years as chief executive.

Its profit warning in July followed a double-digit decline in sales across its core markets in what the company described as a “disappointing” first quarter. The company also scrapped its dividend.

Store sales in the Americas and Asia Pacific fell by 23%, while sales in Europe, the Middle East, India and Africa dropped by 16%.

The company has also been particularly hit by an economic downturn in China, where consumers have become more selective about their high-end purchases. In May, Burberry reported that sales in China had decreased by 19% in the final quarter of last year.

Burberry is one of several luxury brands that have struggled in recent years as consumer spending tightens. The Gucci owner, Kering, issued a profit warning in March, also citing a decline in Chinese consumer spending as a factor in sluggish sales.

Burberry and LVMH declined to comment.