Brunello Cucinelli Talks Fair Profitability and Sustainability
● The Italian entrepreneur explained on Tuesday how he is now calling his company a maison, his sustainability goals and his guidelines “of ideals for life and work,” which include “fair profitability.”
MILAN — Brunello Cucinelli would like his company to be called Casa di Moda, and believes it has earned the right to be defined so.
“Our values and fashion are representative of a fashion maison,” said the entrepreneur during a pre-Christmas call organized with analysts and the press at the end of trading on Tuesday. “I've always been fascinated by maisons such as Hermès and Chanel,” he admitted.
Cucinelli strongly wished to hold the call, which was not originally on the financial calendar, and he opened up about his hopes for the end of the pandemic “in three or four months,” his company's push into “economic, moral, ethical and cultural sustainability,” and candidly admitted his angst before the G20 in Rome at the end of October, where he was asked by Prime Minister Mario Draghi to speak about humanistic capitalism and human sustainability.
“I couldn't eat or sleep and was there too early in the morning, but I couldn't risk getting sick with the wrong food or getting somehow delayed,” he confided. And, worried about his speech, once again, he turned to Saint Augustine for guidance, “letting words come from the soul.”
He said he was “very confident about the future,” but never forgetting “moderation and self-restraint.” In fact, he underscored the importance of “a healthy and sustainable balance between profit and giving back, which, with reconciling work and human privacy, and the desire to repair and reuse, are core values of our Casa di Moda and we have always tried to direct our activity following these high and noble principles.”
Cucinelli, who holds the role of executive chairman and creative director of his company, did not forget he was speaking to analysts, and while preliminary figures will be released in January, he reiterated that the year 2021 was one of rebalancing and that he expected to close the 12 months with a 30 percent growth in revenues. This allowed the company to entirely recover the 10 percent loss in the year 2020 and to “resume its solid and serene path toward the objectives of the 2019 to 2028 plan,” which sees it doubling sales by 2028.
The net financial indebtedness in 2021 is expected to be around 35 million euros, a strong improvement compared to 93.5 million euros as of Dec. 31, 2020, thanks to the cash generation related to operating activities and the strong results in the management of trade working capital.
”We also have solid expectations for the next two years, where we confirm our expectations of a nice, healthy and balanced growth of around 10 percent in both 2022 and 2023,” continued Cucinelli, based on the orders for the spring 2022 collection and the “very positive sales trend” of the fall 2021 season. He ventured into saying that 2023 could be a year “above expectations.”
Cucinelli said growth in 2021 came from all geographies and all distribution channels, pointing to “the great health of the brand, further consolidating its positioning in absolute luxury.”
He underscored the importance of being a ready-to-wear house but also increasingly becoming a lifestyle maison, with the introduction of homewear and, thanks to the collaboration with Oliver Peoples and Luxottica, into eyewear.
He also expects “a clear improvement in margins in 2021 compared to last year, which was strongly affected by the pandemic. In the two-year period 2022-23, we expect to return to profitability levels prior to the start of the pandemic, which have always been based on the values that inspire us: the right growth, the right profit and the right balance between profit and giving back.”
Over the period of the 10-year plan, Cucinelli has also set targets to reduce the company's greenhouse gas emissions by 60 percent in terms of economic intensity and in absolute terms by 70 percent for scope 1 and 2 emissions and by 22.5 percent for scope 3.
“We are strongly committed to helping to improve the climate change issue on our planet,” underscoring that the brand's “type of products with high manual skills and craftsmanship considers low emissions. However, we also try with great responsibility and dedication to convey this serious commitment to all our partners.”
The ideas of humanistic capitalism and human sustainability are foundations of the company, which translate into “working and living in harmony with creation.” Cucinelli listed a set of 10 guidelines of “ideals for life and work.”
Among some, these included the love and respect for the Earth, without using more resources than it is necessary or natural. “We always act as loyal and affectionate guardians of creation and we believe in the moral and economic dignity of human beings.” Cucinelli highlighted the importance of
“fair profitability and harmony between profit and giving back to the community. We believe in universalism and we act displaying great respect for all civilizations.”