MILAN — Brunello Cucinelli is raising the guidance of year-end revenues at his namesake company, but stands by his signature belief in gradual growth.
Based on the results achieved in the first nine months of the year, and his namesake company’s strong performance in October and November, Cucinelli on Tuesday said he forecasts a sales growth of around 28 percent in 2022.
The spring 2023 order intake leads Cucinelli to see an increase in revenues of around 12 percent in 2023, reaching the milestone of 1 billion euros in sales.
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In October, as reported, Cucinelli said he was expecting a 25 percent increase in revenues for the year and a 10 percent gain in the top line for 2023.
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During a conference call with analysts at the end of trading, asked about the company’s trajectory and his forecasts, deemed conservative by one analyst, Cucinelli reiterated that 2022 was a “splendid” and “special” year but that sustainable and gradual growth is in line with his vision and that he does not want to stray from that. “At times [companies] worry too much about profits and lose sight of the product and overlook exclusivity and charm,” Cucinelli said. For example, he admitted the company could easily expand its retail network, but he believes that would be to the detriment of exclusivity.
To further convey his message, he said that, since the company’s IPO in 2012, revenues have grown 12.3 percent and they were up 11 percent in 2021 compared with the previous year.
Cucinelli also reiterated that his company has been leveraging a strong supply chain and the personal relations built over the years. “Much has been harvested in this 2022, the year of full rebalancing for our Casa di Moda, thanks also to the serious, creative and manufacturing country to which we are honored to belong, as well as its welfare state,” he said. “During the past two pandemic years, we have not made anyone redundant. This has certainly enabled us to maintain our production and commercial structures in full efficiency, and has put us in a position to meet the needs of the world market where demand seems to exceed supply.”
Earnings before interest, taxes, depreciation and amortization margins are expected to stand at around 18.6 percent of revenues in 2022, and net profit at 10 percent of sales.
Revenues are expected to grow around 10 percent in 2024, doubling sales ahead of the company’s 2019-28 plan.
An exclusive product has also been helping the brand to grow in China, but Cucinelli underscored that it is still a small market, representing 13 percent of total sales. Asia accounts for 25 percent of revenues.
Co-chief executive officer Luca Lisandroni said 2022 was “a good year” in China, where the company has consolidated its positioning, with a presence mainly in bigger cities and a limited digital presence. “Ready-to-wear has garnered more relevance and customers are much more sophisticated,” Lisandroni said. “They are looking for items that are more international in taste and of great quality. There has been a strong evolution, and we believe China remains the main growth engine for the luxury industry.”
Lisandroni said the company expects a positive fourth quarter in China and that he imagines a one percentage point increase per year, “without forcing growth. This gradual growth and linear development has been very rewarding for us.”
Investments of around 8 percent are expected also for the years 2023 and 2024.
Cucinelli also said he gave the company’s employees a bonus equal to a month’s pay for Christmas.
As reported, Cucinelli will receive the Neiman Marcus Award for Distinguished Service in the Field of Fashion in Paris on March 4 during the city’s fashion week and he spoke several times about this recognition during the call.
“I am flattered and full of gratitude to Neiman Marcus, one of the highest expressions of fashion and luxury in the world. I sincerely thank [CEO] Geoffroy van Raemdonck, [president and chief merchandising officer] Lana Todorovich and all the coworkers with whom we have had the pleasure of working and exchanging views over the past 20 fruitful years,” he said. “The prestigious recognition awarded to me fills me with joy and honors me extraordinarily, above all because I believe that it is not only a magnificent acknowledgement of the work of our fashion house, but also an exceptional proof of the great appreciation of the whole world for the value of top-notch craftsmanship, Made in Italy and, I am sure, also our way of living and working, that we here at Solomeo like to call in universal harmony with creation.”