Only Cucinelli would use the release of his luxury brand’s first-quarter figures on Thursday — which saw a 2.3 percent drop in preliminary revenues as COVID-19 spread first in China and then to the rest of the world — as an opportunity to talk as much about humanity, Creation and a process of renewal than the details of financials and store openings. His “Letter to Investors for the New Time” echoes many of the themes Cucinelli has stated over the years — and the tenets on how he tries to run his company.
Cucinelli’s letter is the second by a major Italian fashion figure to address the changes taking place as the pandemic rages worldwide, and the latest to address how the industry will be transformed by the crisis. Giorgio Armani last week wrote an open letter to WWD expressing his thoughts on the need for the fashion system to adopt a new methodology — one that is slower and more sustainable.
In Cucinelli’s case, his letter was more about how the pandemic is transforming us as individuals, bringing into perspective what is important in one’s life. “Too many things we have learned in such a short time; too many things we thought indispensable have turned out to be superfluous, too many feelings we thought dormant re-emerged like new springs,” he wrote, adding that in the letter he wanted “to focus on those changes that slowly but surely, from day-to-day — perhaps without us even realizing it yet — are almost reshaping our human structure, showing us just how beautiful the world can be, that very same world that we took for granted until yesterday.
“Until a few days ago, the time that flows from one daily action to the next was driven by the frantic urgency of an ongoing haste and frenzy without a conscious reason; today time has changed its pace like in a melody where every musical beat falls where the score of Creation wants it to be, and generates a music of memories and future that we won’t easily forget,” Cucinelli went on. “How many times, in yesterday’s life, our words stole the space of feelings, forgetting that the first truly universal word is the example of a life led with moderation! How many times, wrapped up in a life that we believed to be the best possible, somewhere, perhaps even in our dreams, we wondered if our behavior was not completely respectful of Creation, and for a moment we thought that maybe we were acting against nature?”
But instead of being pessimistic about the crisis that is devastating lives and economies worldwide, Cucinelli expressed optimism over the renewal that will result. That extends to his own company, even though it saw first-quarter revenues drop to 156.7 million euros from 160.4 million last year, with the first three months of 2020 almost a tale of two parts. In a statement accompanying the results, the businessman said the year started off strongly and remained so until the end of February, apart from China, where the pandemic had already taken hold. In China, revenues during the quarter fell 27.1 percent to 11.2 million euros, or 7.2 percent of the total. The first signs of improvement in China were seen in the first 10 days of March and over the past few days, following the gradual normalization of the health situation and the reopening of stores, as well as a desire to restart.
There were declines in other major markets as well, including Italy, where revenues fell 13.9 percent to 24.4 million euros, impacted by the full closures of stores in the second part of the quarter, and Europe, which decreased 2.2. percent to 51 million euros, representing 32.5 percent of the total, with “remarkable growth” until the beginning of March. Sales rose in North America, which was up 9.5 percent to 50.8 million euros with “a sharp improvement” until stores had to close in the second half of last month, and were up 6.6 percent in the rest of the world to 19.3 million euros.
Despite the first-quarter drop in sales, the company believes its strengths will allow it to maintain the strategy and vision it laid out in its 2019-28 plan. The company said these strengths include: the flexibility of its manufacturing structure, which is fully Italian (75 percent of it is located in the Umbria region) and made up of 364 “high-quality artisanal laboratories” employing about 5,000 people; a strong partnership with all its main suppliers; the importance of the wholesale channel, which represented around 45 percent of total sales last year; the low level of debt, and a “sound trust-based relationship with our customers hinged around the protection of their human privacy.”
“Our company structure has been planned for delivering balanced growth in the three-year period 2020-21-22,” Cucinelli said in his statement with the results, cautioning that, “we may have to wait another two or three months to get an overview of the whole year, but at the same time the fall/winter 2020 wholesale order backlog is very significant, and in this regard the strong reliability of our partners — and hopefully ours, too — reassures us a lot.”
That said, the company admitted that COVID-19 will make it impossible for it “to fully deliver the economic objectives we had set ourselves for 2020, with a much greater impact in the second quarter than in the first three months of the year.”
However, in Cucinelli’s view, these challenges are only momentary ones. In his view, the “new time” that will emerge is “brimming with fabulous opportunities, a bearer of new lifeblood, a creator of ideas revolving around a renewed desire for life. I know that there will be economic growth; I know that enthusiasm will make our hearts soar. But at the end of this all we will be different; we too, like time, will be somehow new.
“Something has been transformed and it will make us see things and life in a different, beautiful, enchanted light,” his letter on this “new time” stated. “That very same bread, which we took for granted yesterday, will now be a new surprise, a warning to remind us of those who do not have any bread, and should have it. In every man we will recognize another man: our brother.
“Something has changed, and it will reveal us that family is the bud of society. And so water, the fields of wheat, the orchards, and the animals that feed us, will take on a new look, they will be full of a meaning that is their natural, fair, balanced one, they will become almost sacred. This value is that of the rhythm of Creation, which beats in our hearts.”
Cucinelli then turned to a theme that has occupied him for years: balance in one’s life and balance in business. He believes the post-COVID-19 era provides the world “a fascinating opportunity for us to restore the relationship between humanism and technology, between consumption and the economy, between the spirit and harmony, between profit and giving back. I have always imagined our life as the relationship between us and our destiny, which — like the ring of a planet, or in the shape of an enormous wheel — turns slowly but steadily, carrying some good and some pain on its every spoke, and always, always, the spoke of our cherished opportunities.”
He went on: “The new time is this opportunity: to redress our relationship with Creation according to its rules, the rules of simple use and not waste or consumption, respect for human dignity, fair work, and everything in the world that is worthy of being called ‘human.’
“I have no doubt about this new time, a time that will speak to us with a silent and piercing language, a time as new as we will be. One day, thinking back to this lazy, idle time, for a while we will perceive it with a sort of revulsion, but then unexpectedly, maybe on a spring day like today, in the early morning, when the last night stars go out in the sky, when the painful memories overwhelm us, we will be surprised to feel almost a sense of fondness, an inconceivable warmth towards today’s times, and we will then realize that with time we end up loving even our sorrows, because they taught us our new life.”