MILAN — The year 2017 marked a record for Brunello Cucinelli SpA, which for the first time exceeded sales of 500 million euros.
Reporting preliminary revenues on Monday, chairman and chief executive officer Brunello Cucinelli characterized 2017 as “a splendid year also in terms of the image enjoyed by our brand worldwide; moreover, considering the good quality of our sales, we also expect excellent profits.” These are due to be released on March 7.
For the 12 months ended Dec. 31, the Solomeo, Italy-based company reported preliminary consolidated sales of 503.6 million euros, up 10.4 percent compared with 456 million euros in the previous year.
The entrepreneur was also pleased with prospects for 2018, based on spring orders, which he said “were very interesting.” In light of the “excellent sell-out performance of the past winter, we envisage for this year, too, a nice double-digit growth in terms of both revenues and profits,” he added.
In 2017, sales in Italy rose 11.2 percent to 84.7 million euros, representing 16.8 percent of the total. Cucinelli said “the results harvested in our beloved Italy deserve a special mention, with a feeling of optimism arising not only from our growth results and the appreciation that Italy keeps enjoying worldwide, but also from the positivity, the creativity, the desire to work well and innovate that we often perceive around us, especially among young people.”
Revenues in Europe grew 10.6 percent to 150.9 million euros, accounting for 30 percent of the total, lifted by “a uniform increase” in all areas and in all channels, supported by top-end tourists and local customers.
Sales in North America increased 6.5 percent to 178.6 million euros, representing 35.5 percent of the total and driven by both mono- and multibrand channels.
The company highlighted the relationship with luxury department stores and the attention to “human resources,” in particular the stores’ staff, viewed as “friendly advisers” for customers, and the importance of activities related to “trunk shows.”
Sales in Greater China jumped 36.2 percent to 42.7 million euros, representing 8.5 percent of the total. “We have an extremely strong desire to protect the brand’s exclusivity and allure in Greater China, and in fact, we believe that a limited distribution can ensure its appeal, protecting it and maintaining the exclusivity sought after by our end customers,” said the company, emphasizing the potential in the region. Accordingly, the brand’s presence is restricted to 18 direct boutiques in Greater China, with only one opening taking place during the year.
Sales in the Rest of the World grew 5.3 percent to 46.7 million euros, representing 9.3 percent of the total.
In the 12 months, the retail channel showed a 19.6 percent increase in revenues, which reached 270.5 million euros, accounting for 53.7 percent of the total.
Like-for-like sales rose 4.4 percent.
The network comprises 94 direct boutiques, with four openings in 2017 and the conversion of four boutiques in Moscow from the wholesale monobrand channel.
A positive contribution came from taking control and directly operating five shops-in-shop within Holt Renfrew in Canada, which were previously managed under the wholesale multibrand formula.
The wholesale monobrand channel rose 1.5 percent to 25.3 million euros, representing 5 percent of the total and comprising 30 boutiques.
The wholesale multibrand channel showed 6.2 percent growth to sales of 207.8 million euros, accounting for 41.3 percent of the total.
In 2017, capital expenditures totaled 35 million euros, mainly channeled into the boutique network as well as into developing the brand’s digital presence. Cucinelli launched its own web site and e-store a year ago, championing the “gracious approach” it is known for also in the digital sphere and the entrepreneur has repeatedly talked of “humanizing the web” and avoiding a pushy attitude toward customers.
“The numerous beautiful ‘thank you’ letters we receive from end customers are the confirmation that our project ‘Humanist Artisans of the Web’ is moving in the right direction,” said the company. Cucinelli also emphasized the “excellent relationship” with online luxury multibrand stores such as Mr Porter, Net-a-porter and Mytheresa, “whose exclusivity we consider to be comparable to the best department stores in the physical world.”
As of Dec. 31, net debt was reduced to about 16 million euros from 51 million euros at the end of December 2016 through the generation of cash and a positive commercial working capital management.