Brunello Cucinelli, the Italian brand that has become synonymous with quiet luxury, had a standout year in 2023.
According to a brand statement on Monday, Brunello Cucinelli’s revenue surpassed €1.1 billion ($1.2 billion), a milestone achieved five years ahead of a 10-year plan set in 2019, which aimed to double the company’s sales from €555 million by 2028.
The final quarter of 2023 was particularly strong, yielding the company’s highest-ever quarterly sales at €321 million ($351 million), a 15.6% increase from the previous year. This growth is noteworthy considering the 32% overall revenue growth, including a 53% boost in the wholesale channel, in the same quarter of 2022. For the year ending December 31, 2023, the brand’s total revenue rose 23.9% to €1.14 billion ($1.24 billion).
In the brand’s statement, it attributed its success during the year to its exclusivity, craftsmanship, and balanced sales across different channels and regions.
Its sales are exceptional considering the softening of the luxury market since October when LVMH’s growth significantly slowed. Considering LVMH’s luxury dominance, its financial outcomes triggered a market downturn, resulting in a rapid loss of $245 billion in market value for Europe’s top seven luxury companies.
In the Cucinelli earnings, the company noted, “In various geographical areas, we have noticed a general demand for understatement, elegance, uniqueness and quality on the part of the end customer, who more and more often wants to find out and learn about the history and values behind the products they purchase.”
The high-value, understated items for which Cuccinelli is known are faring well in the luxury market. Italian luxury brand Zegna has seen similar results driven by customers buying luxury basics like jumpers and T-shirts.
Analysts expect that other quiet luxury brands will report consistent growth for 2023. “Cucinelli’s earnings were a bit above market expectations, and we believe that we will see similar upside surprises by brands such as Hermès, which target a narrower but wealthier segment of the marketplace,” said Bryce Quillin, economist and co-founder of luxury consultancy It’s A Working Title.
“Cucinelli was well placed to take advantage of the quiet luxury trend that continued into 2023, with the aesthetic being integral to the brand,” said Rebecca Bingley, co-founder of brand strategy company StudioThree. “Their customer base is wealthier and continues to spend.”
Direct sales for the brand, making up 65.5% of its total revenue, increased by 30.2% to €746.6 million ($818 million), driven by the strong performance of both its spring and fall collections. Globally, Cucinelli’s branded store footprint included 125 shop-in-shops and 49 stores, as of the end of 2023. Its wholesale sales rose by 13.4% during the year to €392.7 million ($430 million).
In an aim to offer a more intimate customer experience, Cucinelli opened its first invite-only shopping locations, dubbed Casa Cucinelli, in 2021 — it now has seven private stores. Massimo Caronna, CEO of Brunello Cucinelli North America, said in May, “There’s a desire [among customers] to get closer to the culture of the brand, [beyond] just purchasing an item of our collection. … People want to live the brand, not just wear the brand, and they’re curious about the brand founder and his everyday life.”
The brand’s sales in the Americas rose 20.8%. During the year, it hosted events in the states including a celebration of the brand’s 25th anniversary, with Saks, which included a store window takeover. It also hosted an event at Chateau Marmont in L.A. to help bolster the image of the brand in the local market.
“The U.S. market has shown great solidity, with strong demand in all major cities on both the Eastern and Western seaboards, in renowned resort locations, and in ‘secondary’ cities, where the presence in the most important multi-brand and Specialty Stores has represented significant added value,” the company stated in the earnings announcement.
Analysts expect that price hikes could help the brand cruise through this year. “Brands like Cucinelli should be able to generate strong margins into 2024 by continuing to exercise strong pricing power that should not materially hurt volume growth,” said Quillin. “Their product mix is well aligned with the enduring trend for quiet luxury amid turbulent macroeconomic times. This is in contrast with much of the [luxury] industry, where we expect weaker price growth opportunities this year.”
