Brunello Cucinelli’s New Venture ‘For Humanity’
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MILAN — Brunello Cucinelli has long preached a humanistic philosophy that at times seems out of step with the cut-throat capitalism of the luxury goods world.
And now he’s taking another step in putting that philosophy into practice — to the tune of 30 million euros.
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The fashion mogul on Tuesday revealed the creation of a new label, “Brunello Cucinelli for Humanity.” But this isn’t another capsule collection or brand extension to his existing, oh-so-expensive designs.
Instead, it’s a label aimed at doing good.
Quoting his beloved philosophers, Cucinelli on Tuesday said he has learned that “there is no absolute evil as there is no absolute good. There is always some good in evil and some evil in good, and both can teach us something.”
What he aims to teach with the new label is a way for fashion brands to take what, in the midst of the coronavirus pandemic, is unsold, now out-of-season merchandise and, rather than mark it down to generate some revenues or ship it off to a discounter, instead simply give it away. Cucinelli’s new “Project in Support of Mankind” will gift garments that are still in stores, impacted by the lockdown. The production value of the goods amounts to 30 million euros — meaning much more than that at retail prices.
“This is a new kind of capitalism. There is harmony between profit and giving back,” said Cucinelli as he commented on a 29.5 percent decrease in his company’s first half preliminary sales because of the pandemic.
Cucinelli set up a “Council in Support of Mankind” comprising 10 individuals — six from his family and four from the company — who will work with a network of partners and select those who will receive the garments in perfect condition and packaged as gifts, with letters from Cucinelli. The packages may contain 40 to 50 pieces and be sent to the organizations chosen two or three times a year.
The garments will carry the indelible label: “Brunello Cucinelli for Humanity.”
This project “raises the dignity of mankind and pays tribute to all those who have taken part in the manufacturing of these garments,” Cucinelli said. “It will go hand in hand with the other project started several years ago, which consists in repairing, recovering and reusing all of our products.”
He was adamant next spring the collection in stores will be entirely new.
Despite the pandemic and the impact on business in the first half, Cucinelli was confident once again that his goal to double 2019 sales by 2028 would be achieved. “There is no change in the program and we expect an average EBITDA margin of around 17 to 18 percent in 2028,” he said in a conference call with analysts at the end of trading in Milan, where the company is publicly listed.
In the six months ended June 30, revenues amounted to 205.5 million euros, compared with 291.4 million euros in the same period last year.
Sales in Italy fell 34.9 percent to 28.9 million euros, representing 14 percent of the total. After a very strong start of the semester, the period was heavily impacted by the closure of stores, said Cucinelli, confirming good fall orders and “interesting signs of a pickup in sales with the gradual reopening of the spaces.”
Revenues in Europe decreased 23.8 percent to 70.4 million euros, accounting for 34.2 percent of the total, also hurt by the closure of stores.
North America was down 39.1 percent to 57.3 million euros, representing 27.9 percent of the total.
Sales in China dropped 19.1 percent to 23.3 million euros, accounting for 11.3 percent of the total.
The rest of the world was down 19.4 percent to 25.7 million euros, representing 12.5 percent of the total.
Globally, the lockdown and the closure of stores in the second quarter impacted the retail channel, which reported in the first half a decrease of 31.7 percent to 102.5 million euros, accounting for 49.9 percent of the total.
Cucinelli touted a progressive confidence and return to purchases from local customers as stores reopened.
As of June 30, the company counted 107 boutiques. Earlier this year, a store opened in New York’s Meatpacking District.
In the first half, sales in the wholesale channel were down 23.7 percent to 13.9 million euros, accounting for 6.8 percent of the total. The division includes 30 boutiques.
The multibrand wholesale channel decreased 27.7 percent to 89.1 million euros, representing 43.4 percent of the total. It was impacted by the seven-week production halt in March and April.
Manufacturing activities restarted on May 4, fully recovering the production of the fall collection in July, Cucinelli said.
He said fall deliveries were postponed by about a month, responding to the need to align the collections to the seasons in stores.
Cucinelli proudly said the company has not let go of any of its 2,024 workers, of which 1,000 are at the company’s headquarters in Italy’s Solomeo.
The entrepreneur said he was “very confident in the second half and a return to a sober normality,” estimating a 10 percent drop in revenues in 2020, based on a third and fourth quarter he forecasts as positive.
He sees a “rebalance” in 2021, with 15 percent growth in revenues.
For 2022, Cucinelli expects a 10 percent increase in sales compared with 2021, with an EBITDA margin of around 17 percent.
Men’s wear sales should represent around 40 percent in 2022 but with the same number of pieces as the women’s division, he added. Plans include the opening of two to three stores and the expansion of three or four existing ones. He ticked off cities such as Tokyo, Saint Petersburg, New York and Las Vegas, as well as Shanghai, adding that he is also eyeing the opening of a big store in China in a city to still be decided.
Cucinelli also believes the company’s plant in Solomeo could be expanded after 2022.
He summed up his can-do spirit by saying: “We must work to make the path less arduous for the younger generation, those coming up after us. We must light up the path as lantern bearers of mankind.”
