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WWD Collections issue 11/17/2014


In writing about Brunello Cucinelli, there’s no need for typical ceo clichés. His company is headquartered in the 14th-century hilltop medieval village of Solomeo, which he restored. He has a passion for the ancient classics. And soccer. Then there’s his surprisingly sustained, upward trajectory in the stock market.

In fact, Cucinelli’s life and experience is anything but a stereotype. He built a business that generated sales of more than $425 million last year and has 1,300 employees, selling in more than 60 countries, and traded his company in one of Italy’s most successful public stock offerings in recent years. Cucinelli describes it as “a graceful and sustainable” growth, peppering his conversation with quotes from Marcus Aurelius Antoninus, Socrates and Seneca.

This story first appeared in the November 17, 2014 issue of WWD.  Subscribe Today.

“I feel the same way today as when I sold my first 53 cashmere sweaters in 1978,” he says in his animated, yet soft-spoken way, smiling broadly and opening his arms, palms up with a shrug. Cucinelli, 61, is a self-made man and he contends his company would never have seen the light in any other scenario.

“This is a typical Italian story about people who know each other in a small village and help one another—it’s about human relations. There is never spiritual or economic poverty and never solitude in a provincial Italian town,” claims Cucinelli, wearing a white shirt and a blue cashmere sweater over white pants, sitting in his spacious, luminous office in Solomeo, strewn with books, a cluster of soccer balls popping out of a wooden trunk and overlooking his factory’s new extension.

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“Historically, this area was a luxury knitwear hub,” says Cucinelli, recalling his first steps into the working world. “I had always been attracted by cashmere and its long-lasting quality—you hardly ever throw cashmere away. When I asked a yarn-maker here if he would sell me 20 kilos of cashmere, I warned him I had no money, but he said I could pay him back whenever. Then I asked a group of women artisans to knit six models of women’s sweaters, and they also agreed to be paid at a later date. Finally, I asked a laundry here to dye the sweaters in bright colors, orange, turquoise…and they said I was crazy, that they would never do it,” recalls Cucinelli, explaining that, at the time, this was inconceivable as cashmere designs generally came in natural hues.

Cucinelli, who notes he “always liked Benetton’s colors,” eventually had his way and, dyed cashmere knits packed up, he traveled to Italy’s South Tyrol to sell them in Naturno, near Bolzano, because he “read they paid after 10 days over there.”

This initial sale led to the creation of his first company, Smail, which stood for Società Manufatti in Lana (which means “wool products firm” and is pronounced “smile”) and his first steps in the restoration of the Solomeo village.

Cucinelli hails from the nearby Castel Rigone, but his wife, Federica, was from Solomeo. “I started from the 14th-century tower in the village, which had been deserted after an agricultural crisis. The owner of the tower agreed to sell it to me and to be paid over time because he knew my wife’s parents,” Cucinelli recounts.

Perhaps, but it’s also likely he took notice of this then-32-year-old innovative entrepreneur with little money and big dreams. Cucinelli founded his namesake company in 1985 and moved it to the tower in 1987. He expects to complete a guesthouse at the village by the end of the year, making his renovation of Solomeo a 30-year project.

As the brand grew, so did the headquarters. It expanded in the village, which today also encompasses a theater, an amphitheater, the Aurelian Neo-humanistic Academy, which hosts seminars on philosophy, history, architecture and spirituality. There’s also a vineyard, a library and a school of arts and crafts that teaches masonry, gardening and farming, tailoring, knitting, cutting and sewing, darning and mending.

At some schools, including the tailoring course, students are awarded scholarships of 700 euros ($891) a month. Everything is open and Cucinelli relishes the exchange between students, artists and workers.

The village is perched on the hills of this small town 10 minutes outside Perugia, in the central region of Umbria, about a two-hour drive from Florence. Although he travels frequently for work, Cucinelli still lives in the village and is as remote from fashion’s glamour and glitz as they come. He doesn’t keep a yacht, a helicopter or a private plane and continues to hang out with lifelong friends.

“I like living here and I want to live here. My life hasn’t changed, it’s simple rather than complicated,” he says candidly.

At the foot of the village today lies the production factory, which doubled in size to 270,000 square feet—a state-of-the-art plant that supports and reflects Cucinelli’s pursuit of Made in Italy manufacturing credentials, which he sees as an absolute must for his brand. The new wing opened in April, and, a few steps away, the entrepreneur has added an expansive restaurant that’s free to employees. Every department is flooded by natural light, thanks to huge windows that look onto the hills and the woods. There are 820 employees in Solomeo—a number that almost doubled in the past five years.

“We will be OK until 2018, in terms of growth projection,” says Cucinelli of the factory’s capacity.

One of his long-standing priorities has been to “give moral and economic dignity to artisanal work” and for his employees to function in a comfortable and welcoming atmosphere.

“My true goal was to have people work in better human conditions. Work elevates the dignity of men. You may be rich, but you don’t have the same dignity if you don’t work. You don’t feel useful to humanity if you don’t work,” says Cucinelli, who was especially influenced in his choices by his father, a blue-collar worker who was originally a farmer.
“I saw the hard life my father led as a worker. We had a beautiful life in the countryside until I was 12, although we were not rich, but the work in a factory is much harder and repetitive. My father did not complain about the pay or the hardship, but I could see his hands worn out by the cement.

“Ever since my very first employee, I always thought the work should be done in a healthy and pleasant environment, with better human relationships. I can’t ease the weight of the job, which is often repetitive, but I can help with nice big windows for a beautiful view and to see the light outside,” says Cucinelli. And while working conditions are important, his workers are also paid around 20 percent more than their peers. Everyone is in at 8 a.m. and out at 5:30 p.m., with a 90-minute lunch break.

The entrepreneur believes “there is a moral renaissance of artisanal work.” His schools in Solomeo have a hard time accommodating the requests of young applicants, which number between 300 and 400 a year, when fewer than 50 get in. This year, 29 students are enrolled in the fashion school and eight each in the courses for masonry and horticulture/gardening. The company has internal training courses and each year more than 60 apprentices are hired by the company.

“It was especially difficult to imagine this a few years ago, when kids would rather say they worked in a call center than as an artisan,” marvels Cucinelli. Asked what is motivating this shift, he says he believes “the future is divided between special products—exclusive, recognizable and costly—and more industrial and affordable products. For Italy, Europe and the U.S., we must work in this part of high-quality production in all sectors and accept that certain products no longer belong to us and our [manufacturing process]. Automatically, this re-qualifies our artisanal product.”

Although Cucinelli is “fascinated” by the U.S., and confesses he’s tried to “blend the American culture and organization, the German rigor and work ethic with the Italian flexibility,” he’s not always been so focused on work. His blue eyes still twinkle remembering his “carefree” life at the town’s bar, playing cards, discussing subjects spanning from religion and politics to economy and sports with the 60 or 70 local patrons.

“I still miss it.…But at one point, I started thinking, what shall I do in life? Theater, engineer, artist? I always wanted to restore art, so that we can keep works as custodians. Also, self-taught, I’ve always been in love with architecture,” he recalls of his days before setting up Smail. “That’s when [American economist and professor] Theodore Levitt spoke, around 1975, of how developed countries should produce quality products.”

Fast-forward to 2014, two-and-a-half years since the IPO, and Cucinelli professes to be “very happy” his company is public. “Investors and analysts are the same as counselors of the company, no consultant helps as much as an investor—as long as you want to listen. It’s a beautiful exchange.”

Cucinelli’s road show was certainly unique, as he famously invited investors to Solomeo around eight months before the IPO to experience the village life—and local food and wine delicacies at the town trattoria. The road show was cut short as shares were oversubscribed and, on their first day of trading, soared 49.7 percent closing at 11.60 euros, or $15.37. At press time, they traded at 16.10 euros, or $20.50.

Addressing the luxury industry’s performance, slower for some brands than others, Cucinelli observes, “After the road show, I never found an investor who believed that a 7 to 8 percent growth was not a [solid] growth. We went public in 2012, at a time when luxury was growing 20 percent. Personally, I never thought that a 20 percent growth was healthy. This is a good moment of healthy growth,” underscoring his goal to achieve long-term expansion.

“When a company grows at a 6, 7 percent rate and has a healthy project, why should it not be considered a beautiful company?” He also considers China’s growth for the time being as having leveled out.

He expects to close the year with double-digit growth in sales and profit, and projects that vigorous growth to continue over the next three years, as well.

Cucinelli doesn’t want to open a lot of stores—as of the end of June, he had 102 units—but instead feels the growth will be from its wholesale accounts and from the expansion into more countries. He also has no plans to produce secondary lines or product extensions through licenses.

To ensure the continuity of his company, the unity of the village—as well as protecting his daughters Camilla, 32, and Carolina, 23, who both work in product development for the brand—Cucinelli has set up an irreversible trust.

This is a separate entity from the Fondazione Brunello Cucinelli, whose goal is “the improvement and beauty of humanity.” This may be part of the Umbrian culture, with philosophy stemming “from Saint Benedict and Saint Francis, to never turn your back on mankind.” Case in point: In 2011, Cucinelli donated $1.3 million to help restore the Etruscan Arch in Perugia, dating back to the third century B.C. He also gave Christmas bonuses of 6,000 euros ($7,513) each to longtime employees to mark the IPO and thank them for their support and for helping make the listing possible.

Cucinelli, who is also generous with his time, volunteers to talk about religion, too: “I believe in a God that is the same for everyone, above everything, something supernatural of superior strength, the ‘anima mundi.’ I respect every religion.”

Cucinelli has lectured on humanism in business at Harvard, and in 2011 received an honorary degree in ethics and philosophy from the University of Perugia. In October, he received the Fashion Star Honoree Award from Fashion Group International for his business centered around the “moral and economic dignity” of human beings at work, and his “humanistic capitalism.”

Cucinelli, who feels part designer, part industrialist and part artisan, is focused on growing one brand alone, creating a lifestyle around it.

Today, the fashion is simple and clean, characterized by a casual-luxe feeling, often relying on the fabrics for innovation. His spring collection, for instance, was “the result of artisanal craftsmanship made contemporary through modern techniques,” he said at the presentation. Among the looks were tops made with traditional macramé techniques modernized with hand-braided meshes in cashmere threads and jeweled chains. They were paired with long skirts in pleated wool gauze and high-waisted pants with boyish fits. He called it “an urban, elegant collection with a sportswear inspiration.

“The market is full of so many things, sometimes people are tired of all this stuff. One must think with great attention,” he believes. “I am happy to think of my company as one with an Italian culture lifestyle. There is a moral, civil, spiritual and economic renewal in Italy. I never found anyone around the world who doesn’t like at least one part of Italy. Italy is the place of possibilities, and this all is still valid, if you have good ideas. I live according to nature, and I am a realist, rather than an optimist.”

PHILOSOPHY IN ACTION

Brunello Cucinelli has a passion for the classics. Here, he shares some of his favorite thoughts.

“The great fathers of the past teach us to identify a new vision of the future interpreting the world of today; I believe the ability to build a better future is within everyone’s reach in line with that spirit of custody that allows us to feel responsible for what we’ve been entrusted with. I believe that each one of us is a pro tempore custodian of the beauties of the world.”

“I love all classics, but if I had to choose one, I would say, ‘The Thoughts of the Emperor Marcus Aurelius Antoninus.’”

And, paraphrasing Aurelius, his advice to businessmen: “Live according to nature; let it be [or don’t fight it]; live as if it were your last day; plan as if you lived in eternity.”

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