MILAN — “Exclusivity and rarity will allow a company to last a century — it’s not easy, but this is what we believe in.”
Brunello Cucinelli repeatedly spoke of exclusivity during a call with analysts on Tuesday evening, seeing it as a key factor in the continued upward trajectory of his namesake company, as he commented on its strong growth in profitability and revenues in the first half of the year.
“Overexposure has always worried me as it is not exclusivity, and luxury is exclusivity, rarity and uniqueness, when customers feel that a product was made almost solely for them,” said Cucinelli, executive chairman and creative director of the publicly listed company, citing Hadrian the Emperor’s caution against vulgar wealth.
“It takes some courage to remain exclusive,” he pointed out, underscoring once again that, while his company has doubled sales since the pandemic, his goal is for a “gracious” growth of about 12 percent on a yearly basis. That said, 2023 revenues are expected to grow around 19 percent in the year.
In July, Cucinelli said he expected to close the year with an increase in revenues of between 17 and 19 percent, compared with the previous forecast of 15 percent. In December last year he expected 2023 sales to grow 12 percent.
During the call, he confirmed his expectation of a 10 percent increase in sales in 2024.
In the six months ended June 30, net profit rose 31.9 percent to 66.7 million euros compared with 50.6 million euros in the same period last year.
Revenues climbed 31 percent to 543.9 million euros, compared with 415.3 million euros in the first half of 2022.
Cucinelli and chief executive officer Luca Lisandroni said that July and August continued to see a growth trend.
Lisandroni said the performance of China, which contributed to revenues in Asia soaring 55.6 percent to 152.2 million euros, representing 28 percent of the total, remains “extremely solid,” with increasing demand for ready-to-wear, as customers “want to be dressed in an international way. They are very loyal to the brand, are generally aged more than 40 and with a bigger spending propensity.”
He singled out Japan as also one of the best performing markets in Asia.
In the first half, sales in Italy rose 23.7 percent to 60.8 million euros, accounting for 11.2 percent of the total.
Revenues in Europe amounted to 202.7 million euros, up 22.9 percent compared with the first half, and representing 37.3 percent of the total, lifted by strong and high-end tourism, particularly from North America.
Sales in the Americas rose 23.9 percent to 189 million euros, accounting for 34.7 percent of revenues.
Lisandroni touted the strength of the American cluster and the “excellent” growth in the U.S., both at retail and wholesale, for both the men’s and women’s divisions. Cucinelli said “the season of great elegance, à la Great Gatsby, is arriving.”
In the first half, the retail channel registered a 41.6 percent increase in sales to 344.6 million euros, accounting for 63.4 percent of the total.
In 2024, the company will open three stores, in Toronto, Miami and Macao, and will expand units in Vienna and Venice.
Wholesale sales rose 15.8 percent to 199.3 million euros, representing 36.6 percent of the total.
In the first half, operating profit climbed 51.8 percent to 87.7 million euros, compared with 57.8 million euros at the end of June 2022, representing a 16.1 percent margin on sales.
Earnings before interest, taxes, depreciation and amortization rose 29.1 percent to 154.8 million euros.
Investments amounted to 34.9 million euros, compared with 36.6 million euros last year.
Commercial investments of 16.3 million euros were mainly focused on the expansion and updating of boutiques, the renovation of showrooms and the increase in sales areas.
Other investments amounting to 18.6 million euros were channeled into the industrial structure and the development of two new projects: the expansion of Cucinelli’s factory that began last year with the redevelopment of an eight-hectare area on the outskirts of Solomeo, Italy, where the company is headquartered, and the establishment of a new facility dedicated solely to the manufacture of men’s outerwear in Penne, Italy, a storied men’s tailoring hub, where investments started in the first half of 2023.
As of June 30, net debt stood at 38.6 million euros compared with 63.8 million euros at the end of June last year.