MILAN — Brunello Cucinelli believes the year 2016 was “the beginning of a new world.”
During a conference call with analysts to discuss his namesake company’s profits and sales growth last year, the entrepreneur emphasized the potential of the Internet for his brand and its new directly managed online store.
“We worked for three years on the Internet, and I am the super ceo of Internet,” said Cucinelli. “I am less connected than the average, and my goal is to tackle the web as an artisan.”
He reiterated his belief in the potential of the channel. “We don’t know how fast it will go. We opened the biggest universal store.”
Just launched, the site is no longer managed by Yoox Net-a-porter Group but in-house by the company. It offers a “philosophical” area that describes the brand’s story and that of the Solomeo hamlet where it is based, as well an online store. Cucinelli took the opportunity to praise Net-a-porter and Mr Porter, which remain the brand’s partners, and which he lauded as “the most beautiful and exclusive online luxury boutiques in the world. They are very good, refined and very serious. I hope they are not upset by this but we were inspired by the way they work for our own site and store.”
Asked by an analyst about Farfetch, Cucinelli said his goal was “to protect the brand. We don’t judge the business but we must protect the brand from massification. I hope the brand will still exist in 30, 50 years,” he said. “We must preserve the fascination with luxury.”
The company, which went public five years ago and will mark its 40th anniversary next year, in 2016 reported an 18.8 percent rise in net profits. Earnings totaled 39.1 million euros, or $43 million, compared with 32.9 million euros, or $36.5 million, in 2015.
In the 12 months ended Dec. 31, sales rose 10.1 percent to 456 million euros, or $501.6 million.
Earnings before interest, taxes, depreciation and amortization increased 13.2 percent to 78.2 million euros, or $86 million.
“It has been yet another key year for the image of our brand, since we have completed our grand project called Humanistic Artisans of the Web by launching our e-commerce platform,” he said. “Moreover, our corporate philosophy kept delivering material and consistent results, and I hope it meets the expectations of all those who have decided to join us by investing in our business.”
Cucinelli highlighted positive spring 2017 sales, and “excellent results” with the fall 2017 sales campaign, which led him to “be pretty certain that also the current year should deliver double-digit growth in terms of both revenues and margins.”
“I imagine we can reach sales of 500 million euros [$550 million]” in the year, he said.
Sales in Italy rose 7.3 percent to 76.2 million euros, or $83.8 million, representing 16.7 percent of total revenues, lifted by a “solid sales performance” in main cities and resorts, which benefited from an increase in high-end tourists.
Revenues in Europe gained 5.8 percent to 136.4 million euros, or $150 million, representing 29.9 percent of the total, also lifted by tourists’ shopping.
In North America, revenues rose 7.1 percent to 167.7 million euros, or $184.4 million, representing 36.8 percent of the total, lifted by both the monobrand and multibrand channels.
Sales in Greater China were up 21.8 percent to 31.3 million euros, or $34.4 million, accounting for 6.9 percent of the total, lifted by the positive performance of the monobrand stores and the progressive growth of prestigious multibrand shops. Hong Kong also posted positive sales results.
In the Rest of the World, sales increased 39.3 percent to 44.4 million euros, or $48.8 million, accounting for 9.7 percent of the total. The gain was driven by sales in Japan; growth was positive also in the Far East and in the Middle East, with the opening of a boutique in Dubai.
Revenues in the retail monobrand channel rose 17.1 percent to 226.2 million euros, or $248.8 million, representing 49.6 percent of the total. Comparable-store sales grew 3.9 percent. Comps increased 3.8 percent in the Jan. 1 to Feb. 26 period this year.
As of the end of December, Cucinelli had 86 directly operated stores, compared with 81 at the end of December 2015.
The wholesale monobrand channel grew 2.4 percent to 34.2 million euros, or $37.6 million, representing 7.5 percent of the total. At 36, the number of total boutiques remained unchanged for the past 12 months.
Sales in the wholesale multibrand channel rose 4.3 percent to 195.6 million euros, or $215.1 million, accounting for 42.9 percent of total.
Cucinelli said he expected multibrand stores in Asia, especially in China, to expand, similarly to the the network in the former Soviet Union countries in the last decade.
In 2016 capital expenditures totaled 29.8 million euros, or $32.7 million, to complete the four-year plan that began in 2013. In the 2013 to 2016 period, the company invested 150.5 million euros, or $165.5 million.