Jan 21, 2014
Cucinelli sees double-digit 2014 growth, focus on menswear
Jan 21, 2014
Italy's Brunello Cucinelli forecast double-digit percentage growth in sales and profits for 2014 and outlined plans to create more space in stores for menswear, a growing sector in the company's major U.S. and European markets.
The company, which makes luxury daywear in a medieval hamlet in Italy's leafy Umbria region, on Thursday reported a 15.4 percent rise in preliminary 2013 net sales to 322.5 million euros ($438.7 million), in line with analyst expectations.
"We foresee a wonderful 2014," Chief Executive Brunello Cucinelli said, repeating his mantra that sales and profit would grow "gently" - in double digits.
The projections were based on orders received for the spring-summer collection and the men's autumn-winter line it has just shown at the Pitti Uomo menswear trade show in Florence.
Cucinelli said the company intended to invest 60 million euros in the course of 2014 and 2015, some of which will be used to expand space in stores for the men's clothing which currently accounts for around 33 percent of revenue.
"We have the option to extend the floorspace to make the male customer more comfortable," Cucinelli said, adding that, in future, menswear sales could grow to around 40 percent of revenue.
The menswear market is outperforming women's clothing in most markets, according to consultancy Bain & Co, apart from China - where Cucinelli makes less than 5 percent of sales.
Cucinelli's sales grew by 23.2 percent in the United States and 20 percent in Europe in 2013, markets which each account for around a third of overall revenue.
Sales dropped by 2.9 percent in an Italian market still struggling to emerge from recession, but Cucinelli said he was optimistic the domestic market would turn positive in 2014.
The chief executive said he felt sanguine about recent volatility among luxury stocks which has seen his company's shares fall around 14 percent since Jan. 7, after soaring about 230 percent since their 2012 flotation.
"I had always imagined that the stock could gain 20 or 25 percent a year," Cucinelli said. "It is normal that it can also come down a little."
The company plans to keep its dividend policy in line with the previous year, when it paid shareholders around 26 percent of its profits, Cucinelli said.
The price of raw materials to make its trademark fine cashmere sweaters is not a concern for the company and the current market rate of around 150 euros a kg is a "healthy price", Cucinelli said.
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