MILAN — Brunello Cucinelli believes winds of change are sweeping through Italy and Europe — “a very different and improved air, compared with a year ago.”
The Italian entrepreneur was speaking after his luxury goods company reported year-end results. Higher sales and growth in both its retail and wholesale channels helped Brunello Cucinelli SpA see net profit in 2014 rise 7.5 percent to 31.8 million euros, or $42.3 million, compared with 29.6 million euros, or $39 million, in 2013. In the 12 months ended Dec. 31, revenues gained 10.4 percent to 355.9 million euros, or $473.3 million at average exchange, compared with 322.5 million euros, or $425.7 million, in the previous year.
Earnings before interest, taxes, depreciation and amortization climbed 8.4 percent to 63 million euros, or $83.8 million.
Cucinelli, chairman and chief executive officer of the firm, said the group is “in the midst of a development path in Italy and abroad, with excellent results in terms of both revenues and margins. We consider this latest year as a ‘fundamental’ year for the image of our business.”
He touted the brand’s “clear positioning at the highest end of luxury as well as the distinctive features” of the collections and their “craftsmanship, modernity, style and quality.
“The above can be said also of our latest fall collections. Since all orders have already been placed by now, we can already guess that the trend can continue at the same pace this year too, reaching double-digit growth of our revenues,” the ceo added.
Cucinelli said that this “is a favorable time for our Italy, too. The weaker euro will support our exports, the large quantity of cash injected by the ECB [European Central Bank] into our economies will support credit flows to businesses, the reforms of our government are on the right track and as our nation is a manufacturing country, we can envisage a new thriving time ahead.”
During a conference call with analysts, Cucinelli said this was the third year since the company’s initial public offering and that he was “very, very happy” with being a public company. “We are stronger, more international and more supported.”
Sales in international markets rose 12.4 percent, accounting for 80.8 percent of total revenues.
Sales in the U.S. rose 12.7 percent to 122.9 million euros, or $163.4 million, representing 34.5 percent of the total. Europe gained 8.2 percent to 116.7 million euros, or $155.2 million, representing 32.8 percent of revenues, lifted by tourism. Greater China jumped 32.7 percent to 20.9 million euros, or $27.8 million, accounting for 5.9 percent of total sales. The performance was favored by the conversion of three boutiques in Hong Kong at the beginning of October 2013 into wholly owned units.
The Rest of the World grew 16.6 percent to 27 million euros, or $36 million, representing 7.6 percent of sales, lifted by the conversion of three wholesale boutiques and 13 hard shops in department stores to directly operated stores in Japan, carried out in September. The Italian market posted a 2.7 percent growth in sales to 68.5 million euros, or $91.1 million, accounting for 19.2 percent of revenues. Referring to Russia, Cucinelli said that orders for spring “held up” and that he saw no change for the fall season, despite the fact that the company has no directly operated store in the region.
The group’s retail channel rose 28.6 percent, while wholesale monobrand gained 14.3 percent, excluding the conversions to the direct channel, while the wholesale multibrand division rose 1.5 percent.
As of Dec. 31, the monobrand network was made up of 105 stores, compared with 98 at the end of the previous year.
The company confirmed nine openings already formally contracted for 2015. Of these, Frankfurt and Singapore opened earlier this year. Other key openings include units in Tokyo, Monte Carlo, Vancouver, Honolulu’s Ala Moana, and Düsseldorf, said Cucinelli. During the call, he underscored rising rents, citing, for example, Madison Avenue, now at 5 million euros, or about $5.5 million at current exchange, compared with 1.4 million euros in 2007, or Los Angeles, where rents have risen fourfold.