The problem is not price, but products. This is why Brunello Cucinelli calls for its “rebalancing”, during the conference call presenting the company’s flattering results for the first-half of 2024.
The half-year results
In the six months ending June 30, Brunello Cucinelli Group’s net profit rose 31.1% to 66.1 million euros. Turnover, meanwhile, amounted to 620.7 million, up 14.1% on 2023. While the increase in margins testifies to the company’s excellent health, it also raised questions about the luxury industry’s high margins.
The rebalancing
Cucinelli (picture from Imagoeconomica) stated that margins should be a consequence of product quality. His priority is to avoid at all costs providing the public with “a product that already looks old”. The Umbrian entrepreneur also commented on some price increases tied to the accommodation and wine segments. Price increases that the entrepreneur called “meaningless” and offensive to customers, who do not want to feel cheated. Similarly, for Cucinelli, the relationship between quality and price needs to be rebalanced. “I have heard multi-brand retailers complaining about the presence of too many evergreen products, lacking exclusivity and overpricing“, or the three factors “not to be underestimated”, WWD reports.
How 2024 ends
As for the Solomeo-based company’s half-year result, it was better than expected. Luca Lisandroni, CEO of Brunello Cucinelli, said that in July and August retail sales in direct stores “showed a solid growth trend“. In particular, “the United States is confirmed to be in excellent health, China is doing well, and Europe is also solid”, writes Borsa Italiana on its website. The trend for 2024 and 2025 (+10% in sales in each year) has been confirmed, along with doubling 2023’s sales by 2030.
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