Cucinelli ‘Very Positive’ as He Confirms 2012 Revenue Guidance
Brunello Cucinelli, founder of the namesake cashmere clothier, confirmed his company’s guidance for 2012 revenue growth, saying concerns of slowing luxury sales were overstated for brands catering to the very wealthiest shoppers.
Cucinelli and other so-called absolute luxury companies will grow more than 10 percent this year, buoyed by demand from Asian and Latin American consumers, the executive said in a Sept. 22 interview. Hermes International SCA (RMS) last month said its sales growth this year could be “around 12 percent.”
“I’m very positive,” Cucinelli said at the Solomeo, Italy-based company’s showroom in Milan, without specifying the pace of growth in the third quarter. “For us, this is a very beautiful year.”
Burberry Group Plc (BRBY), the U.K.’s largest luxury-goods maker, this month partly attributed a decline in same-store sales on an industry-wide slump in spending, rattling the stocks of industry rivals. Revenue at Cucinelli, whose products are generally more expensive than Burberry’s, climbed 16 percent in the first half, matching the company’s average annual growth rate since 2000.
Luxury goods investors “have to stop thinking about growth of 30 percent to 40 percent” a year, said Cucinelli, calling the pace “unnatural” and potentially damaging.
With growth of at least 10 percent, “I am consolidating my company,” said Cucinelli, who is chairman and chief executive officer of his business. “I come from the mountains. The pace of the mountaineer is slower but it’s always the same.”
In 2013, the CEO said he would be “very happy” with growth of as much as 12 percent, warning the rate could as much as halve if the macroeconomic climate gets “very bad.”
Cucinelli, which currently operates about 80 boutiques directly, plans to add 20 more this year, the CEO said. Revenue from single-branded stores will reach 50 percent of the total ina year and a half, from about 39 percent currently, he said.
“I want to control the growth,” Cucinelli said, adding that clients have warned him they won’t buy his products if he opens too many shops. He also ruled out raising prices.
Accessories will account for 14 percent of sales this year, widening 2.2 percentage points from 2011, Cucinelli said. By 2014, the portion of revenue from bags and other items will rise to 17 percent to 18 percent, the CEO said.
Cucinelli, who last year sold shares in the clothier in an initial public offering, also ruled out reducing his 63 percent stake.
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