Home Luxury brand Brunello Cucinelli touts strength of luxury goods and meets 12% growth expectations for 2022

Brunello Cucinelli touts strength of luxury goods and meets 12% growth expectations for 2022


MILAN — Brunello Cucinelli was never shy about delivering personal messages during his calls with analysts and his last Wednesday evening – to comment on the first quarter performance of his eponymous company, which saw revenues climb 19.6% – n was no exception.

He briefly touched on the Champions League; expressed his “faith in the wisdom of men”, hoping for an end to the war in Ukraine as soon as possible, and remembered his father, who died aged 100 last weekend, as “the great adviser” of his life. He also praised rival LVMH Moët Hennessy Louis Vuitton for its latest set of results, released on Tuesday.

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Throughout, Cucinelli has expressed confidence in the resilience and strength of the luxury sector. This, in addition to “excellent spring sales” and strong fall orders, led it to confirm a growth target of 12% for the full year, 10% growth in 2023 and to imagine a doubling of revenues, initially planned for the period 2019-28, from 2026.

The estimate for 2022 takes into account the war between Russia and Ukraine, which has no impact on Cucinelli’s Italian supply and production chain.

“We assumed that the Russian market will represent around 4% of total sales in 2022, a significant reduction compared to the results of 2021 and 2020, years which we considered extraordinary due to the pandemic. We imagined that the weight of this market could return in 2022 to incidence values ​​very similar to those historically reported before the pandemic. Over the five-year period 2015-2019, the average export value impact to Russia was around 4-5%,” Cucinelli said.

“I think the economies are so interconnected that a solution will be found,” he added.

With a turnover of 196.9 million euros, up 22.8% compared to the first quarter of 2019, Cucinelli once again expressed its hopes for the development of the company in the long term. To this end, he finalized the purchase of a large 8-hectare plot of land on the outskirts of the company’s headquarters in Solomeo, where an industrial complex built in the 1970s operated until around 30 years ago.

The area will be completely redeveloped. “We have already started working on the reclamation of the land, and this will be followed by the building conversion plan which will allow us to gradually build up to approximately 40,000 square meters. [430,550 square feet]“, said Cucinelli.

“These great spaces will support the growth of the business in the years to come, allowing us to expand, if necessary, for the next 50 years,” he said, adding proudly that this is only of the group’s latest project which contributes to the development of the territory. by converting brownfield sites and improving existing land. The first buildings will be erected in 2023, he estimated. “We want to highlight the importance of Italian industry, producing on time and with the best quality.”

In March, as noted, in Cucinelli’s first merger and acquisition, the company bought a 43% stake in cashmere specialist Lanificio Cariaggi “to ensure the best raw materials”, he said.

Cucinelli said he did not feel compelled to raise the prices, which take place twice a year with the presentation of the seasonal collections, “avoiding any form of speculation”, nor did he think that there was a shortage of raw materials. But he admitted that more attention was paid to inventories.

In the three months ended March 31, sales in Europe increased 14.5% to €58.3 million, representing 29.5% of the total, driven by domestic spending, existing and new customers and a balance between retail and multi-brand channels. The positive trend was seen not only in major European luxury capitals, but also in second-tier cities in central-north and Mediterranean Europe, with international tensions having a limited impact on the Russian market in the latter part of the trimester.

Revenues in Italy amounted to 24.2 million euros, up 2.8% compared to the same quarter in 2021, and representing 12.3% of the total.

Sales in the Americas increased by 37.7% at constant exchange rates to €66.9 million, representing 34% of the total. Performance was strong across the board, with strong business in Aspen, Colorado; Palm Beach, Florida; Miami, Los Angeles and New York, among other cities.

Revenues in Asia increased by 14.5% at constant exchange rate to 47.6 million euros, representing 24.2% of the total. China is currently the country most affected by the pandemic, but despite this, the quarter was positive.

General Manager Luca Lisandroni said he was very pleased with the results in China. “Ready-to-wear is consolidating more and more, and we are looking more and more for sobriety without logos and extreme quality. We are not worried about a structural change, it is a market which has a very strong vitality, which has no equal in any other geography. I spend most of my day talking to landlords at huge mall presentations and we are growing our business both retail and wholesale. »

Japan, South Korea and the Middle East also performed well.

At constant exchange rates, retail sales increased by 36.4% to 100.2 million euros, representing 50.9% of the total. Compared to the first quarter of 2019, the channel grew by 40.8%.

As of March 31, there were 115 stores, compared to 110 stores at the end of March last year.

Wholesale sales increased by 6.1% to 96.7 million euros, or 49.1% of the total. Compared to the first quarter of 2019, the channel grew by 8.4%.

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