Latest tweets from Brunello Cucinelli

Cucinelli @Cucinelli
On June 9th in #Solomeo first meeting with young innovative Umbrian manufacturers of XXI century on the topic of contemporary handcrafting
Il 9 giugno a #Solomeo primo incontro con giovani innovatori manifatturieri umbri del XXI secolo sul grande tema del manufatto contemporaneo
Brunello Cucinelli e @lauraboldrini a Tokyo nel 150° anniversario delle relazioni diplomatiche Italia-Giappone
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Brunello Cucinelli

Cashmere from the village of Solomeo

“During my lifetime I have always nurtured a dream: useful work to achieve an important goal. I have always felt that business profit alone was not enough to fulfil my dream and a higher purpose was to be found”.

Brunello Cucinelli began life in humble surroundings, growing up with no electricity or running water. Today, aged 60, he is the founder, chief executive and designer of a global luxury lifestyle brand with a market capitalisation of more than $1.5 billion.

In a recent interview with BOF he said “I wanted to be a real expert, to have a specialty or niche. There was no coloured cashmere for women. So I went to the dye shop and here we had the most famous dye expert, a young guy, I said, ‘I’d like this to be orange.” The Italian soon went out to market equipped with three round neck sweaters and three V-neck sweaters, selling 400 in the first three months.

Over the next 15-20 years the brand remained entirely focused on one product category. ““In terms of the product, it was innovative. I was seeking perfection for one single thing. I was the man with the sweaters, the cashmere guy. Womenswear was the first step and then around the 1990s we started with menswear too, but knitwear only. My hope was that it would be modern, looking after colours, the shapes.”

By 1998 sales stood at 200,000 sweaters a year, despite the fact the brand operated only one tiny monobrand store. In 2000, following requests from American buyers for a total Brunello Cucinelli look, the brand expanded its product offering. Over a period of six years, during which the brand annually rolled out four or five stores globally, Brunello Cucinelli established his namesake brand’s aesthetic. Cucinelli took his business public in the Milan Bourse’s only IPO in 2012, becoming a billionaire in the process. The company generated $444 million in revenue in 2013.

Cucinelli built his company with a deep respect for his employees and the human impact of his business. In keeping with what he dubs a human capitalist philosophy, every stitch of clothing his company creates is made in Italy, mostly in and around Solomeo, the 14th century Perugian hamlet that Cucinelli has lovingly and personally restored over the past two decades and where his clothing empire is based. Seven hundred and twenty employees work in Solomeo and, on average, are paid about 20 percent more than they would make elsewhere.

Cucinelli takes time out from meetings with designers of his next collection to discuss work — and why people shouldn’t exhaust themselves doing it. It’s a drizzly mid-September morning in Solomeo, the 12th-century hamlet where the 62-year-old CEO has located both his home and the global headquarters of his namesake fashion house.

Atop the cypress-forested hill is a medieval castle that Cucinelli has restored for his living quarters and a school. Nearby is a library open to employees featuring Cucinelli’s favorite thinkers, including Kant and Ruskin. Farther down the hill, artisans weave $3,000 cashmere sweaters from the undercoats of rare Hircus goats. He asks the 1,000-member staff to knock off work at 5:30 and not to send business-related e-mails after that to conserve their creative energies. “People need their rest,” Cucinelli says. “If I make you overwork, 
I have stolen your soul.”

Cucinelli calls his employee-centered approach humanistic capitalism and traces it to his teenage years. He watched his father trade the family’s life on a farm for more money in a factory, only to come home exhausted from a dark cement-making plant where colleagues mocked his peasant clothes. “It was very repetitive, hard work,” he says. “Very often, he’d be humiliated.”

Cucinelli insists on balance at his company. That includes a 90-minute respite at 1 p.m., when workers break en masse for lunch that costs a few euros in the subsidized canteen. On this Monday, they’ll dine on steak, pasta and local produce bathed in Cucinelli’s own olive oil. His Brunello & Federica Cucinelli Foundation extends the philosophy to funding projects that make the world more livable. “Restoring a church or maybe restoring a hospital,” he offers as examples.

For a mogul who competes with the storied houses of Gucci and Prada, Cucinelli is an upstart. Gucci was run by second-generation family members before Cucinelli was even born. He founded the company in 1978 and has built it to 1,400 employees, a presence in 60 countries, and a $1 billion market valuation. Since 2012, when Brunello Cucinelli SpA listed on the Milan stock exchange, annual net profit has jumped 52 percent to $43.9 million. Sales increased 10.4 percent to $472.8 million last year, more than double the average of 37 luxury-goods companies compiled by Bloomberg Intelligence.

Fellow fashion CEO Gildo Zegna  is a fan, so much so that his menswear company, Ermenegildo Zegna Group,  holds a 3 percent stake. “It was natural to become an investor,” Zegna says. “We admire his philanthropic and humanistic capitalism.”

Analysts are less dazzled. Only one who covers the stock rates it a buy, with seven advising hold and five saying sell, Bloomberg data show. Shares have fallen by more than a third since peaking in January 2014, depriving Cucinelli of billionaire status. “The question I have on Brunello Cucinelli is whether the brand has enough unique features and underlying tangible elements to maintain its very high pricing long-term,” says Luca Solca, head of luxury-goods research at Exane BNP Paribas.

Cucinelli says he’s out to make money but the markup must be 
reasonable. His company’s operating margin is 13.8 percent, lower than the average of 17 percent for its peers, according to data compiled by Bloomberg. “Would you buy a product if you knew the manufacturer made 
a huge, preposterous profit?” he asks. He says his prices reflect his garments’ hyperlocal production, hand craftsmanship, and sustainable sourcing from Mongolia and northern India. He pays employees about 20 percent more than the average Italian manufacturing wage. If this ethos draws customers, all the better, he says.

In Solomeo, Cucinelli saw the chance to revive a village that residents had abandoned and create the workplace his father never had. His wife, Federica, grew up in the town. He began visiting in the 1970s, after dropping out of engineering school at 21. He’d started a small company in Ellera di Corciano, near Perugia, making brightly dyed cashmere sweaters. As the company grew, he decided that when he had the money, he’d bring life back to Solomeo’s borgo, or town center. “I wanted to be a guardian,” he says. “Someone who basically spent his life in this very tiny corner of the world and embellished, restored, and built something new.”

He bought the central part of the castle from its absentee owner and moved the company there in 1987. “I thought we’d all go back to appreciating life in the village and my buildings would acquire value,” he says.

Today, women in gray smocks work in light-filled spaces, the antithesis of his father’s dank factory. One, with glasses at the end of her nose, deftly threads cashmere fibers through a machine’s metal teeth, fluffy yarn spilling onto her lap.

Cucinelli lives up the hill, surrounded by a 300-year-old frescoed church and classrooms he’s built to teach young people arts from knitting to masonry. His next endeavor is plain to see from the terraces. He’s tearing down six disused warehouses in the nearest valley to make way for a youth-sports stadium, vineyards and orchards. He sold shares worth €62.9 million ($71 million) in January to fund the parks as a buffer against industrial sprawl. “We have to start to give humanity back to the outskirts,” he says.

When employees leave for those outskirts at day’s end, he’ll likely return to his castle to restore his own creative juices. “I’m here only transiently,” he says. “It’s my duty to make these places more beautiful than when I found them.”

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