Brunello Cucinelli says long-term ethics help it outperform a slowing luxury market

Brunello Cucinelli reported 14% revenue growth in the first three months of the year, standing out in a luxury sector where major houses such as Gucci and Louis Vuitton have recorded little or no growth.

Speaking to CNBC on the sidelines of the Global Fashion Summit in Copenhagen, Co-CEO Riccardo Stefanelli said the company’s performance is tied to a long-term approach that prioritizes integrity over short-term margin expansion.

On the day of its IPO in 2012, the company told investors not to invest if they wanted short-term profits achieved by harming the environment or damaging people. Stefanelli said that philosophy remains central to the business.

“You don't have to be greedy,” he said. “If you are greedy, it means that you are taking value from the supply chain and you are depleting someone.”

Stefanelli said the company intentionally operates at lower margins in order to preserve a healthy supply chain and pursue what it describes as “gracious” growth. He said the model has evolved from founder Brunello Cucinelli’s experience into what the company calls “humanistic capitalism.”

According to Stefanelli, the approach is based not only on delivering profits, but on how those profits are achieved, including respect for the value chain and giving back before seeking higher returns.

The Cucinelli family retains 51% ownership of the business, which Stefanelli said protects the group’s long-term strategy from short-term market pressures.

“It makes all the difference. We have control,” he said. “We have to think on a long term instead of the short term imposed by the stock exchange.”

Brunello Cucinelli has also maintained a strict pricing formula, keeping retail prices at seven to eight times industrial production cost. Stefanelli contrasted that with industry behavior during the Covid-19 luxury boom, which ended in 2022, when many brands sharply increased prices and generated revenue growth of as much as 30% without a corresponding increase in perceived quality.

Kering CEO Luca de Meo recently said those price hikes “went too far.” Stefanelli said brands face problems when customers no longer see a connection between real value and retail price.

“We hope to still keep a perception of between the real value and the retail price,” Stefanelli said. “When you miss that, you have the problem, like the last two years, where the customers understand, or maybe they didn't understand, why the increase of price was not connected to the increase of real [value].”

He said he respects the success of LVMH and Kering, but added: “We do another job.”

The article describes a luxury market that is becoming more polarized, with conglomerates that rely heavily on aspirational consumers under pressure, while more exclusive labels continue to perform better. Brunello Cucinelli’s single-brand focus and smaller scale allow it to target annual growth of 10% to 12% while keeping volume growth modest to preserve exclusivity.

The company has a market capitalization of about 6 billion euros and reported 1.4 billion euros in revenue in 2025, making it smaller than many of its peers.

Stefanelli said Asia offers significant room for growth, but the company will not change its identity to chase market demand.

“What we will not change is our domestic recognizability, our domestic attitude, our Italian attitude,” he said. “We do listen to the market, but if the market is asking something that doesn't belong to you, we should not produce it.”

He said some competitors tried to target a larger aspirational customer base to generate more revenue, but warned that doing so means “you never come back on the top of the pyramid.”

After the company’s quarterly results in April, Jefferies analysts said the figures confirmed “the superior staying power of wealthier luxury shoppers.”

The company has also faced volatility. In September last year, short-seller Morpheus Research alleged that Brunello Cucinelli misled investors about its operations in Russia and circumvented international sanctions. The stock fell more than 17% on the allegations, its biggest one-day drop on record. The company rejected the claims, but the shares have not fully recovered.

The article also notes that Italian luxury brands have been affected by recent investigations into worker exploitation and poor factory conditions that threatened the “Made in Italy” image.

Stefanelli said the solution is to pay workers more. He added that higher wages are necessary to attract younger people into artisanal professions such as tailoring and spinning, where labor shortages are emerging.

“If you believe that the company must be there for the next 50 years, you plan like we do,” Stefanelli said. “It's a cost for sure, but it's a choice.”