Manual Craftsmanship Is More Than Quiet Luxury, Says Brunello Cucinelli
MILAN — In a Brunello Cucinelli store, don’t ever expect to find a vicuna coat for 27,000 euros next to a 90-euro bracelet. The latter “can help boost sales, but the image is lost,” said the namesake entrepreneur Wednesday evening during a trading-update call with analysts.
While the company’s preliminary 2023 sales will be disclosed on Jan. 8, Cucinelli held a call before the end of the year to drive home a point: embracing the concept of exclusive luxury is paying off. He once again raised his company’s guidance for 2023 and presented a rosy forecast through 2025.
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“The year 2023 performed beyond our expectations,” said Cucinelli, predicting sales growth of between 22 and 23 percent, slightly exceeding 1.1 billion euros, and “an attractive profit.” As recently as October, he forecast revenues to grow between 20 and 22 percent. In December last year the company expected 2023 sales to grow 12 percent. Based on the orders for spring and the strong beginning of fall 2024, growth is expected to be in the region of 10 percent in 2024 and even into 2025.
While Cucinelli’s fashion is generally considered in sync with the quiet luxury trend, he wondered if the terms apply to “great manual craftsmanship, chic, luxurious, beautiful and precious products. I think that is all much more than silent.”
Defining luxury was at the heart of the call, and co-chief executive officer Luca Lisandroni pointed out that the luxury pyramid has elongated, with an extended horizontal base, leading to “a higher elevation of exclusive and rare absolute luxury,” that is “going in the same direction quickly and simultaneously, where quality ready-to-wear is increasingly central. There is more and more a shift of attention from product to lifestyle, from purchase to experience.”
He continued: “This was a golden year for absolute luxury and all of our markets performed better than expected and the end of the year is showing a similar performance.” Conversely to some competitors, business in the higher range of American clientele did not show any slowdown, “with a very strong demand in big cities as well as in resorts,” Lisandroni said. Likewise, Europe, driven by local spending, showed a strong performance and the second half is expected to be even better than the first half.
The Middle East, Asia and China are growing, helped by “a clear and consistent positioning,” Lisandroni said. Cucinelli was proud of the “GQ Designer of the Year 2023” award received last week in China, but especially for its motivation, “for standing out as a trendsetter in fashion and lifestyle.”
He underscored that it is key to offer the same product globally, without dedicated collections depending on the country. “There must be one single image around the world.”
He dismissed the possibility that his company would buy other brands, but he did not rule out additional investments in small and medium-sized companies that form Italy’s supply chain, as he did with Cariaggi Lanificio, his longtime cashmere supplier.
Cucinelli was also proud of the inclusion of his company, as of Dec. 18, in the main index of Italian stock markets (FTSE MIB index), 11 years after its IPO. Shares have grown 10 percent since the public listing, he remarked.
He spoke of the new factory in Penne, in the central region of Abruzzo, historically a production hub that specializes in sartorial menswear, that he is building. It will be completed in spring 2025 and will occupy an area of 48,600 square feet, employing around 350 artisans.
Pending the completion of the new plant, operations started in a leased factory with 75 full-time workers, with the goal being 100 employees by the end of 2024.
“Penne represents a special place, where the tradition of the finest Italian craftsmanship is best expressed in the production and manufacture of men’s clothing; this is why we would like to contribute to a bright future for this lovely tradition, combining the craftsmanship skills of Abruzzo and Umbria,” Cucinelli said. “We wish that the new enterprise could always give economic and moral dignity to the noble manual labor and that it could become a place-symbol where to train young people to whom we entrust our future. We will try to create all the right conditions so that our artisans of today and tomorrow can renew the most fascinating Italian sartorial creativity, so greatly admired all over the world.”
He expressed his interest and curiosity in AI, but also said that “there will increasingly be the need to realize products manually.”
“Today, a time when the products of contemporary technology are so extraordinary that they can be a wonder even to their own creators, I think that, just like in the days gone by, our humanity will choose the most adequate use of the new science to enhance the life of creation in every way, while at the same time controlling technological innovation so that it might never steal the soul we have received as gift. Two great thinkers of the past, Montaigne in the Renaissance and Jacob Burckhardt in the 19th century, believed, almost in an identical manner, that science is useless without the guide of our mind,” Cucinelli asserted.
Sustainability targets were provided once again: a 70 percent reduction in GHG Scopes 1 and 2 emissions by 2028 compared to 2019; reduction of GHG Scope 3 emissions by 22.5 percent by 2028 compared to 2019; a reduction of GHG Scopes 1, 2 and 3 emissions by 90 percent by 2050 compared to 2019; and achieving the net-zero target by 2050, as set out in the “Science Based Targets Initiative Netzero Standard” by taking part in the UNFCCC’s international “Business Ambition for 1.5°C” and “Race to Zero” campaigns.
Co-CEO Riccardo Stefanelli presented the result of a study, the Social Return on Investment, an index that provides a quantitative measure of the social impacts generated against the economic value of the investments made by the company, chosen as the methodology for calculating impacts.
Analyzing the works done over the years in Solomeo, in the Umbrian territory and internationally, “we are honored to note that the value of the Social Return on Investment is more than twice the value of the investments dedicated over the years,” Stefanelli said. Mainly through the Brunello and Federica Foundation, Cucinelli has restored the medieval village of Solomeo, where the company is headquartered, created a school of crafts and invested in an industrial park, among some initiatives. In the Umbria region, Cucinelli has restored the the Etruscan Arch, the Morlacchi Theater and the tower of Norcia, among others, and internationally he has teamed with King Charles, joining the Sustainable Markets Initiative by funding the Himalayan Regenerative Fashion Living Lab, a project that was just renewed for the next two years during COP28.
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