MILAN — Leave it to Brunello Cucinelli to kick off his company’s first-quarter conference call with a reference as far from financials as could be. On Wednesday, Cucinelli touted Japan’s new Emperor Naruhito, who has marked his ascension to the throne as the opening of a new era of “beautiful harmony and hope.” Cucinelli told analysts his “great wish is for everyone to benefit from rediscovering glimpses of harmony and hope” to soothe “the malaise of our souls.”
However, Cucinelli segued into number-crunching and projections. As his company logged an 8.1 percent increase in revenues in Q1, reaching 160.4 million euros, compared with 148.3 million euros in the same period last year, Cucinelli said he could see the group doubling sales in 10 years — a goal first revealed in March — on the back of a “healthy” 8 percent growth per year that he believes can be achieved.
“Everything is moving according to plan,” he said, trumpeting “excellent” sellout rates of the spring/summer 2019 collection as well as the fall/winter 2019 order intake for both women’s and men’s divisions.
In the three months ended March 31, revenues in Italy grew 4.2 percent to 28.4 million euros, representing 17.7 percent of the total, boosted by both local customers and top-end tourists.
Sales in Europe increased 8.7 percent to 52.1 million euros, accounting for 32.5 percent of the total. Revenues in North America increased 9.2 percent to 46.4 million euros, representing 28.9 percent of the total.
Sales in Greater China climbed 12.7 percent to 15.4 million euros, compared to 13.7 million euros at the end of March 2018, representing 9.6 percent of the total, and Cucinelli spent much of the call discussing that market, which “demands a lot of commitment.
“The Chinese are very well-connected people, very technological, always online, everything is a commodity, but the brand has to stay exclusive and we want to manage our growth,” he explained.
Last year, the company planted a store at China World Mall in Beijing. There are now 16 stores in Mainland China. “We want to open few stores, but very well looked-after,” he said. He also noted that 99 percent of employees at the company’s outpost in Shanghai are Chinese, which makes it “easier to understand their culture, and they come to better understand us — it’s a smooth integration.”
Cucinelli’s two daughters and their families traveled to China and Mongolia during the Easter holidays, he said, meeting the brand’s cashmere producers in what he called “an ongoing engagement with cultures.” As a segue, he told analysts of six Buddhist monks he had first met in San Francisco during a trip to Silicon Valley, who have been visiting the company’s headquarters in Solomeo, Italy. “We had dinner together last night — it was very fascinating. They come from the U.S., Korea, Switzerland…We ate in silence, which is always great if you are not used to it,” he said. “It was fascinating to learn about the monastic culture, I came out enriched. I like the idea of opening up to the world. We can innovate on a daily basis, with respect, dignity and moderation. The real bet is to protect the identity of the brand.”
Cucinelli said he would “be happy if, in three years’ time, the Chinese accounted for 20 percent of sales.
“I don’t want ever to have one single market become too important so that it affects the taste when we design a collection,” he pointed out. In five years’ time, China could grow to weigh 27 or 28 percent, he said.
The brand is now present in 64 countries, and will be available online through new warehouses in Shanghai and Moscow “in a few days,” Cucinelli said.
In the first quarter, in the Rest of the World area, sales grew 6.4 percent to 18.1 million euros, representing 11.3 percent of the total.
The monobrand channel grew 8.5 percent to 71.2 million euros, representing 44.4 percent of the total, over an unchanged perimeter.
As of March 31, the company counted 100 boutiques, with no new openings occurring in the first quarter of 2019.
The wholesale monobrand channel grew 6.4 percent to 11.1 million euros, counting 28 boutiques in the network, with one new opening in the first quarter of 2019 in Russia, at the Barvikha Luxury Village in Moscow.
The wholesale multibrand channel grew 9.8 percent to 78.1 million euros, representing 48.7 percent of the total.
Cucinelli said the new kids’ line will be presented in June, for children ages 4 to 12 and he also touted the positive customer feedback on the “Sartoria Solomeo” project launched in the second half of last year, relying on young tailors and styling tips, and trumpeting innovation rather than the “ancient” term of made-to-measure.
Cucinelli, who is chairman and chief executive officer of the company, reiterated that, starting from April 2020, he will become executive chairman and remain creative director and “guardian of the brand.” As reported, he will be flanked by two co-ceo’s: Riccardo Stefanelli, 38, the husband of his eldest daughter Camilla, who has 13 years of experience within the company, and Luca Lisandroni, 41, who joined three years ago from Luxottica. One manager is from the family and will be based in Solomeo. Lisandroni, on the other hand, will be based in Milan. For the past year, they have been acting as ceo’s as “a general trial.”
“I came from product and 80 percent of my time is dedicated to product,” Cucinelli said.