Brunello Cucinelli Touts Italian Democratic System, Manufacturing Prowess
MILAN — There is no doubt that Italy has a firm supporter in Brunello Cucinelli.
Despite Prime Minister Mario Draghi’s resignation in July, which left the industry concerned and disappointed, and yet another round of political elections scheduled for Sept. 25, at the tail end of Milan Fashion Week, Cucinelli on Tuesday said he was “very positive about Italy and the times to come,” as he commented on a strong set of results of his namesake company in the first half of the year.
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The entrepreneur touted the country’s welfare system, “one of the best in the world,” and Italy’s production and distribution expertise — largely preserved thanks to its social safety nets during the pandemic — and explained during a call with analysts at the end of trading that he, aged 68, was “not worried” about the outcome of the elections, which would lead to the 64th government in the country after World War II.
“I like the alternation of governments,” said Cucinelli, once again referencing Ancient Greece and citing Pericles’ comparison of the Athenian empire to a tyranny. “Italy is a very credible country, with a president that has power over the government. Politicians are custodians, some are more enlightened, some less, but they are representative of the highest democracy and the utmost freedom of thought.”
He urged analysts and investors to believe in Italy and to avoid listening to those who “pretend they know about the future. This is a country made of serious people, beautiful and dedicated manufacturers. If we think back at April 2020, when we feared the end of the world was near, we should marvel at what has been done so far and where we stand now.”
Cucinelli said he believes “demand exceeds the supply of high-quality products” today, which promises further growth for Italian manufacturers, including his own company. Also, “there is no doubt that a strong dollar brings remarkable advantages to exports, and our sector will benefit from that.”
Pointing to the “very positive” months of July and August, he reiterated his expectations of 15 percent growth in revenues for 2022 and of 10 percent in 2023. For the second half of 2022, the company expects growth of around 30 percent compared with 2019.
As reported, Cucinelli is eyeing sales of 1 billion euros in 2024.
In the first six months ended June 30, revenues rose 32.4 percent to 415.4 million euros compared with the same period last year.
Net profit soared to 50.6 million euros from 21.9 million euros in the same period last year. This included benefits of 9.2 million euros related to deferred tax assets, and a reduced taxation on the financial income of 4.7 million euros related to the valuation of the investment of 15 million euros to acquire 43 percent of its longtime cashmere supplier Cariaggi Lanificio in March.
Earnings before interest, taxes, depreciation and amortization climbed 48.8 percent to 120 million euros compared with 80.6 million euros last year.
Operating profit more than doubled to 57.8 million euros compared with 25.3 million euros at the end of June last year.
The company continued to invest as per its three-year plan, in the amount of 36.6 million euros in the first half of the year, compared with 29.9 million euros at the end of June last year.
In the first half, retail sales rose 47.1 percent to 243.3 million euros, representing 58.6 percent of total revenues, thanks to the opening of new flagships, the conversion to concessions and the expansion of existing stores over the past two years.
There are now 117 boutiques, compared with 107 at the end of June 2020, and 42 shops compared with 29 at the end of June 2020.
Wholesale sales grew 16 percent to 172 million euros.
Sales in Europe amounted to 115.7 million euros, up 20.7 percent, and accounting for almost 28 percent of revenues.
Sales in Italy rose 19.9 percent to 49.2 million euros.
Revenues in the Americas jumped 52.6 percent to 152.6 million euros, representing 36.8 percent of the total.
Sales in Asia increased 27.2 percent to 97.8 million euros.
Investments in communication totaled 20.4 million euros compared with 14.4 million euros at the end of June last year.
As of June 30, net debt stood at 63.8 million euros compared with 96.3 million euros at the end of June last year.
While declining to provide additional details, Cucinelli said he was to “receive a prize in China for art, culture and fashion” either in December or next March.
He also said he will reveal in December plans for an expansion of the company’s plant starting in 2025.
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