Cucinelli Plans Store Expansions

SOLOMEO, Italy — Italian cashmere knitter Brunello Cucinelli SpA is convinced that luxury-goods buyers still want to shop in stores despite a pandemic-fueled shift to e-commerce.

The company plans to double the size of four of its stores — in New York, San Francisco, St. Petersburg and Tokyo — and to open two new ones by the end of 2021. The moves come as some other fashion brands are closing shops.

“Our clients keep calling us; they want to make private appointments in our shops and try pieces of the 2021 collection,” the company’s eponymous founder and executive chairman said in a phone interview from the headquarters in Solomeo, in the Umbria region.

Although Cucinelli sells via its website and third parties such as Net-A-Porter, “seeing a garment online, in a video, is one thing,” he added. “Touching it, feeling it, with all the necessary precautions — it’s a totally different story.”

Cucinelli on Thursday reported a first-half loss that was narrower than the average analyst estimate, before interest, taxes, depreciation and amortization. The company sees sales increasing in the third and fourth quarters, with demand picking up sooner in the U.S. than in other markets. Full-year revenue is expected to drop by 10 percent from 2019, before rebounding by 15 percent in 2021.

Even as other luxury brands hesitate to predict business trends amid the uncertainties of the pandemic, Cucinelli is sticking with its 10-year growth projections for 2019-2028, with sales seen doubling in the period. It plans to open one or two new stores per year, despite the persistent uncertainty over international travel.

“Shopping tourism has never been our strongest point in business,” Cucinelli said. “Our excellence is all about cultivating a personal relation with our local customers, in their own cities, from Berlin to Dallas.” As a result of the pandemic, “people are more naturally inclined to shop not far from home, in order to support the local economy.”

Cucinelli has been a champion of sustainability in the luxury industry and said that will be a bigger selling point after Covid-19.

“We will all be even more careful than usual, from now on, about respecting the land we live in, the animals, the human dignity, and choosing our business partners accordingly,” he said. “This is an irreversible process.”

In July, the company assured its 2,000 employees that they’d keep their jobs and salaries. The shares have fallen about 18 percent so far this year.

“I only asked them to be kind and to be prepared to work a little bit more every day for a while,” Cucinelli said. He also guaranteed future cooperation with 5,000 external collaborators and suppliers, saying he would not ask for discounts.

Even before Covid struck, many medium-size Italian fashion brands dependent on a single label were struggling. Yet Cucinelli, which has about 600 million euros ($709 million) in annual sales, is not looking for acquisitions, the founder said. And unlike some other luxury labels, he’s got no plans to transfer the headquarters.

“A business consultant once suggested I move the company to Luxembourg,” Cucinelli said. “I told him: I don’t see how, my friend. This company has no wheels.”

By Flavia Rotondi.