Cucinelli Upbeat on Outlook for Year After ‘Very Special’ 2012Andrew Roberts
Brunello Cucinelli, founder of the namesake maker of $4,530 suede jackets, forecast “modest double-digit” revenue growth in 2013 amid strong demand from the wealthiest shoppers.
“I’m very confident” for this year, the executive said in a Feb. 21 interview at the Solomeo, Italy-based company’s showroom in Milan, describing 2012 results as “very special.”
Cucinelli last month reported a better-than-expected 15 percent rise in sales for last year, outpacing the industry. It’s scheduled to report full results on March 12. The so-called absolute luxury segment where the clothier competes is the fastest-growing part of the market and will continue to outperform the rest until at least 2014, Bain & Co. estimates.
For 2013, “we are very happy” with consensus estimates of about 13 percent sales growth, Cucinelli said in the interview, citing a positive reaction from department-store buyers to the company’s fall-winter collection, which includes a wider array of home wares such as cushions.
“I’m very happy because the collection has been judged contemporary,” he said. The clothier gets 67 percent of revenue from third-party distributors including franchisees, “which makes it a bit easier to budget for the year.”
Cucinelli rose 0.1 percent to 15.48 euros at 12:42 p.m. in Milan trading. The stock has almost doubled since being offered to the public at 7.75 euros a share in April last year.
Cucinelli plans “healthy and robust” investment in the next three years, opening a “very limited number of stores” and doubling the size of the company’s headquarters while aiming to stay debt-free, the chief executive officer said.
“I want to try to manage the exclusivity of the product,” Cucinelli said of the company’s distribution strategy.
The CEO said he doesn’t expect currency swings to hurt revenue growth this year. Cucinelli got 65 percent of 2012 sales in euros and the remainder mainly in dollars. The main reason for differing prices between regions is import duty, he said.
Profit “is the same around the world,” the CEO said.
Cucinelli is finalizing a joint venture in India with Ashok Wadhwa, CEO of financial-services provider Ambit Holdings Pvt. Ltd., with a view to eventually opening as many as 15 stores in the country in the next decade, he also said.