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MILAN — Gains in international markets, driven by the U.S. and Europe, helped Brunello Cucinelli SpA report a 10.6 percent increase in net profit in the first six months of the year.
This story first appeared in the August 29, 2013 issue of WWD. Subscribe Today.
In the period ended June 30, profits rose to 13.3 million euros, or $17.4 million, compared with “normalized” profits of 11.9 million euros, or $15.3 million, in the same period last year, which excluded nonrecurring expenses incurred in the company’s initial public offering. Revenues gained 16.5 percent to 157.6 million euros, or $206.4 million. Dollar amounts have been converted at average exchange for the periods to which they refer.
“We do not want to conceal from you our great satisfaction with our company’s performance in this first semester,” said chairman and managing director Brunello Cucinelli. “Results are special and therefore we envisage a very important 2013 with a sustainable double-digit growth in terms of both revenues and profit. Our spring-summer 2014 men’s and women’s collections have been considered very interesting and innovative by the market. Therefore we are looking at 2014 with great positivity.”
The U.S. market showed 32.3 percent growth, reaching sales of 46.9 million euros, or $61.4 million, while sales in Europe climbed 24.5 percent to 54.8 million euros, or $71.8 million. Greater China rose 16.8 percent to 7.2 million euros, or $9.4 million, while the Rest of the World posted sales of 12.4 million euros, or $16.2 million, compared with 12.9 million euros, or $16.6 million, affected “by certain deliveries made over the end of the half-year with sales recognized in July,” said the company.
Sales in Italy edged down 1.2 percent to 36.2 million euros, or $47.4 million, compared with 36.6 million euros, or $47.2 million, last year.
Earnings before interest, taxes, depreciation and amortization grew 19.7 percent to 27.1 million euros, or $35.5 million, compared with normalized EBITDA in the first half last year, or 17.1 percent of revenues.
Including the nonrecurring costs for the listing process of 6.2 million euros, or $8 million, in the results for the first half of 2012, EBITDA for the first six months of 2013 rose 65.2 percent, while net profit increased 72 percent.
The company continued to invest in its retail monobrand network, and that channel showed a 67 percent growth to 50.7 million euros, or $66.4 million. The wholesale monobrand channel also grew, posting revenues of 20.6 million euros, or $27 million, up 21.7 percent. Sales in the wholesale multibrand channel increased 3.9 percent to 86.2 million euros, or $113 million.
The monobrand network comprised 92 boutiques at the end of June (compared with 70 at the end of June last year), of which 54 were directly operated.
Agreements to open 12 new boutiques in the next 12 months have already been finalized.
Capital expenditure totaled 27 million euros, or $35.4 million, compared with 8.8 million euros, or $11.3 million, in the same period last year, as the company invested in the development of its own store network and the extension of its factory and logistics hub in Solomeo, Italy.
At the end of June, net debt stood at 32.2 million euros, or $42.2 million, compared with 14.2 million euros, or $18.3 million, at the end of June last year, due to the rise in capital expenditure and the growth of the business, as well as to the seasonal and cyclical effects that generally lead to a peak in net debt in the period between the end of June and the end of September, said the company.
The board also approved the project to merge Brunello Cucinelli Capri Srl and Brunello Cucinelli Marittima Srl, which both operated in the local retail sector, into the company in order to simplify the group’s corporate structure in Italy and optimize resource management. By the end of the year, the monobrand boutiques of the two companies being merged, in Naples, Capri, Bologna and Milano Marittima, are expected to be run by the merging company.
“We have the impression that the brand’s allure is strong and respectful,” concluded Cucinelli. “Therefore, a warm thanks goes to our esteemed coworkers, clients and shareholders. We try to work every day whilst respecting human dignity, our surroundings, the territory and our Italy.”