MILAN — Brunello Cucinelli on Thursday shared plans to double his company’s revenues in the next 10 years and revealed he is launching a children’s line.
In a call with analysts to discuss the firm’s latest financial results, Cucinelli, who is chairman and chief executive officer, also provided some insight into future management, revealing he plans to take a step back in a year and become executive chairman and creative director. He would 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, a company Cucinelli holds in “high esteem.”
One manager is from the family and will be based at the headquarters in Solomeo, Italy, he said, underscoring the family’s attachment to the company and the territory. Lisandroni, on the other hand, will be based in Milan, key for the fashion industry, Cucinelli observed. For the past year, they have been acting as ceo’s as “a general trial.”
Cucinelli said once again he was “very happy with the choice” of publicly listing the company, which through the IPO has become “more international, attracting managers more easily.”
The listing is helping “ongoing discussions with analysts and investors,” and Cucinelli touted “the art of listening,” passed on by Plutarch. Fifty percent of issues would be settled just by listening, he contended. The listing will also allow the company to live forever, he said.
Cucinelli, who is 65, said he set up a British-model irreversible trust five years ago. “The corporate governance is in my hands until I am alive, and when I die, my two daughters, who each has a 50 percent stake in the company, will be helped by three wise men who have already been identified and they will be guardians so that the company has no chance of getting stuck.”
The company last year, which Cucinelli defined as “splendid,” marked 40 years in business and the entrepreneur said the first phases of the long-term growth project were completed. Sales doubled in the seven years since its listing in 2012, with constant double-digit growth in both margins and earnings, while realizing the “humanistic capitalism” he values so much.
The children’s line, defined as “a natural evolution,” will be unveiled in the second half of the year, he said, citing Pitti in June for spring. He did not specify if that meant Pitti Uomo or Pitti Bimbo, dedicated to children’s wear. Cucinelli believes the line can have “a healthy growth and an incidence of between 3 and 4 percent once it is operative.”
For 2019, Cucinelli said he feels “confident in envisaging good growth of around 8 percent of revenues as well as a healthy profit growth.”
In the 12 months ended Dec. 31, normalized net profits rose 9.4 percent to 46 million euros, compared with 42.1 million euros, excluding the tax-relief Patent Box.
Revenues climbed 8.1 percent to 553 million euros, compared with 511.7 million euros in 2017. At constant exchange, they rose 10.7 percent.
In 2018, the company invested in the digital channel and introduced the made-to-measure men’s suit. “We are very, very satisfied with these projects, in terms of both image and sales, and are also continuing to invest in 2019.”
Earnings before interest, taxes, depreciation and amortization gained 8.8 percent to 95.1 million euros from 87.5 million euros in 2017. This was lifted by 3.5 percent like-for-like growth, very positive sell-outs and the positive effect of price-mix, which offset the increase in operating costs arising from the development of the new initiatives and the investments in communication in both the physical and digital channels.
In 2018, operating income, amounted to 554.4 million euros, an increase of 7.9 percent compared with 513.8 million euros in 2017.
Sales in Italy rose 4.2 percent to 88.2 million euros, accounting for 15.9 percent of total, lifted by both local customers and tourists, including the Chinese, who, while representing only a limited portion of sales indicate a constant progression.
Revenues in Europe grew 8.5 percent to 163.7 million euros, representing 29.6 percent of the total.
Sales in North America increased 3.9 percent to 187.2 million euros, accounting for 33.9 percent of total, lifted by both the monobrand and multibrand channels, and reporting an increase in tourist flows and a solid rise in local demand.
Revenues in Greater China jumped 28.6 percent to 54.9 million euros, representing 9.9 percent of total sales, with potential growth in the long term. Mainland China confirmed the positive trend of recent months.
Sales in the Rest of the World increased 10.6 percent to 59 million euros, accounting for 10.7 percent of total with solid results in the Middle East and Japan, in particular.
The retail monobrand channel grew 6.3 percent to 296.3 million euros, representing 53.6 percent of the total.
The network consisted of 100 boutiques. Two new boutiques were opened during the year to which were added four conversions from the wholesale monobrand channel.
The wholesale monobrand channel was up 19.4 percent to 30.2 million euros, representing 5.4 percent of the total.
The wholesale multibrand channel grew 9.1 percent to 226.5 million euros, representing 41 percent of the total.
In June last year, the company acquired the minority interest in its Russian subsidiary, amounting to 6.5 million euros, allowing the company to fully control it, compared to the previous 62 percent.