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2026.10.05 | TB | Consumer | Brunello Cucinelli: Retail & Succession

原标题：Brunello Cucinelli – Retail Expansion, Brand Elevation & Succession Risk

#consumer

Third Bridge · 2026-10-05

Analyst-led • 28 Sep 2026

Companies: BC IT, ZGN US

Simone Cavallo (SC) Director General at Kiton (Ciro Paone SpA)

Yanmei Tang (YT) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

YT [00:00:02]: Simone, before we start today's Interview, could you please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

SC [00:00:31]: I agree.

YT [00:00:33]: Great. Thank you so much for that, Simone, and a very warm welcome to Third Bridge's Interview entitled Brunello Cucinelli – Retail Expansion, Brand Elevation & Succession Risk. My name is Yanmei Tang, and I will be facilitating today's Interview with Mr Simone Cavallo, who is the current Director General at Kiton.

Simone, could you please begin with a brief introduction to your background?

SC [00:01:22]: I'm an electronic engineer. I'm 64 at the moment, and I started my career in the United States working as a designer, an engineer designing electronic circuits, so I've been working in the space business, projecting satellites and so on. At a certain point of my life, I decided to come back to Italy and be involved more in the general management, let's say. I experienced, let's say, a number of activities, and then I've joined Kiton 10 years ago as General Manager of the company, and I'm here today.

Questions

00:02:06] What 2-3 key trends do you think are currently shaping the dynamic of the luxury sector overall?

SC [00:02:39]: Let's say that the luxury sector is experiencing in the last couple of years, a sort of slowdown of the growth. This is due to the fact that we are having a number of, let's say, problems around the world, a number of crisis, especially in the east part of the world, the Middle East crisis, the Israeli crisis, the Russian crisis and so on. As a matter of fact, this is slowing down a number of markets that were very much receptive for the absolute luxury that is a sector of Cucinelli's operating. I believe that these trends are not over yet, so they will last for a number of quarters, let's say. Hopefully, something will be coming from China, but at the moment, I perceive that there is a sort of steady-state situation, and the only market that is continuing to grow and let's say, contributing to the growth of the sector is mostly North America. Obviously, there might be a change, but this change has to go through an ending of this crisis that we have around the world. For the time being, we don't have any perception that this is going to be over. As I said now, Cucinelli is a special company because differently from, let's say, the giant of the sector. Cucinelli is a company that is accounting less than EUR 1.5bn turnover. There is room for this company to continue to conquer market share as they did in the past, and given the fact that the perception Cucinelli has in the market is still positive or is very positive. I believe that also considering those crisis that are going around, Cucinelli will express in the next quarters and possibly in the next few years, still a growth, so my view is positive on the brand.

00:04:48] Did you see the current weakness as more of a temporary setback, or do you see this as a structural reshift of the luxury sector overall? Within the industry, I've heard that consumers are less interested in luxury in general – they are shifting their spending to other areas such as travel, experience and so on. What are your thoughts on this? To what extent do you consider the current slowdown cyclical vs structural?

SC [00:05:48]: Let's go step by step. I mean, if you consider Russia, the Russian market was a key market for luxury in the sector we are talking about, obviously. This market has been suffering a lot of embargo from all over the world, in particular, from United States and Europe, consider that a luxury good in our sector for European manufacturer is a good that is per capita exceeding the price of EUR 300. I mean you understand that for such luxury good, you can easily go beyond this type of price, so this embargo in a way is, how to say, is limiting the exportation of the goods in the territory. On the other side, the economy of Russia, was a key market for luxury is struggling. Therefore, there are two effects in a way. On one side, you don't have the goods in the territory. On the other side, the economy is suffering and you don't have the buyers for that type of good, and Russia is one of the reason why it's suffering this type of stuff. Another key market for us was Middle East. Middle East, in particular, Dubai and all the countries that are in the area. Obviously, I mean, the Israeli crisis is generating obviously a slowdown of the economy over there. Obviously, you have less economy.

I believe that once, if and once those two crisis will be over, those two key markets for our sector will continue to contribute as they did in the past. It's true, nevertheless, that after COVID, after the pandemic, we had the sort of ramp-up of the spending in this sector, so I believe that probably we will see the same effect after the end of those crisis. Next, there will be stabilisation of the market. We also have to add another market that is key important for this sector that is China. China has two effects in a way. On one side, the government modernisation process in a way is generating an effect in which, let's say, is not, let's say, rich people are not perceived as positive people in the economy. I mean it's a sort of low-profile education that the government is giving to the people. I believe that this trend will continue for a long time. We will not see, in my opinion, a dramatic growth of the economy of the spending in the luxury good in China. While differently in the United States, we will continue to see a booming economy and generating additional people that can access to the luxury good that we all are selling.

00:08:52] You've spoken about the dynamics in the overall market and mentioned that Brunello Cucinelli has been perceived very positively over the last few years, despite the challenges for the market. The company has seen really positive results. Do you think that level of outperformance vs the market will continue, or do you expect a slight normalisation as well?

SC [00:09:21]: Cucinelli is a special company. differently from other companies that are more industrial, let's say, I believe that Cucinelli is perceived like a company related to a person that is Brunello himself, that has given a sort of flavour of the company that is very related to its personality. Brunello is perceived as a nice person, as a person that is very balanced. It's not someone that is giving the perception to the people that is following the money, is following a sort of joy of living. You know that there is a sort of mutation from the buyers, let's say, from the people of the street that are buying his good. When they buy Cucinelli stuff, they feel that they heritage his way of understanding the life or his way of living the life. This said, consider that Cucinelli at the moment has a little bit more than 150 doors, DOS, I mean, directly operated doors around the world, there are plenty of other high streets in the world that he can cover, so I believe that this strategy will continue to, let's say, push in the direction of opening new doors, and every door he will open, he will have more opportunity to reach the final customer in that territory and then generating more revenue and eventually more cash. I believe that this company is not close to a sort of saturation of its growth. I believe that he still have three, four, five years of growth if he continues to do good collection and good sales activity. In my opinion, they will continue to grow at probably the same pace they are growing in the last year. They grow every year more or less 10%. They will keep doing this for a while.

00:11:27] You seem quite positive on Brunello Cucinelli's brand. In the next three years or so, do you think there are any near-term company-specific risks that we should watch out for?

SC [00:11:49]: Let's divide the thing on two sides. Let's talk first about the business itself. First of all, we are in a world that is somehow in a critical phase, so if there are additional crisis around the world, I can imagine China with Taiwan or USA with any other country around the world, eventually, those crisis will have an impact on the ability of the different nations people to continue to think positively and buying things, so if we exclude this, the threats that Cucinelli might have is twofold. On one side, Brunello himself. Brunello is over 70, and somehow he has to plan and handover of his activity and making sure that the management that will be coming after him is a good management for the company. It's not an easy stuff. It's difficult stuff because actually Brunello himself is very charismatic, and you know that it is difficult to heritage this type of ability. Although, I mean, he's planning somehow an handover of the management of the company, he has appointed two CEOs and those two CEOs are more and more quarter after quarter appearing more and more.

I believe that in a matter of few years, a couple of years, we will see less Brunello and much more, let's say, the standard management of the company appearing and giving communication and so on. Maybe the threat is that the follower of Cucinelli, those two CEOs will not have, let's say, the same ability of Cucinelli to communicate to the community of final customers that are attracted by Cucinelli himself, so this is one trend. Eventually, in that case, the company might experience a sort of slowdown in growth. The other, lately, Cucinelli is implementing a sort of diversification. They are quite good in delivering standard clothes, let's say, and they are moving up the quality and moving up also the price level of the goods that they will be selling on one side. On the other side, they are creating different verticals with other products, perfumes, glasses, homeware and other things. If they will be able to put in these new products, so I call this horizontal growth of the company. If they are able to put in these new products, the same ability they have put in the standard products that they have been doing up to now, they will continue to grow. Eventually, they will also accelerate growth and they will also diversify. Obviously, when you do something new that is not part of your DNA, there is a risk. Obviously, we have to check on the field if this risk is existing or not.

00:15:13] You mentioned Executive Chairman Brunello Cucinelli and the company trying to nurture or develop the next generation of management. Which element of the brand culture or customer relations do you think has been relatively institutionalised vs still being founder-dependent?

SC [00:15:52]: One attitude that I personally like a lot, and I believe the market is liking a lot is that the company Cucinelli, Brunello himself and the company, institutional communication is never given as a communication of a winning company. Even when they deliver the quarterly results or the achievements they have, let's say, in the field, they are never… Let's say, there is never a show off of this type of stuff. They are always moderate, and even when they give exceptional results, lately, they have delivered, for example, the results of '25 and the first quarters of '26, always with a growth of 10% and more, they are always moderate in giving this type of stuff. The general perception on the business side, a person like me or also on the, let's say, final customer side, the perception that they give is always that this is not a company that wants to make money, but it's a company that wants to deliver good quality of life and people appreciate this a lot, and I believe this is an attitude that has been transferred to the next generation, to the daughters, two daughters and in general to the management of the company. This is a character that will continue to last even for, let's say, after Brunello.

00:17:46] How credible do you think Brunello Cucinelli's current succession structure will be over the next few years?

SC [00:18:02]: We have to see. I mean, from the first steps that they gave, they are completely in sync with the communication that the company has been doing up to now. Let's say, it seems to me that even the appearance, the way of delivering information is very consistent with the past. Obviously, we have to see, but the first perception is that there will be no disruption with what Cucinelli has been doing or has been up to now. In my opinion, they will continue like that, at least in the first 2-3 years. Consider that in my opinion, Cucinelli will continue to lead the company still for the next few years, then it will step aside probably. It will, let's say, assist contribute to the current management in letting them doing things alone, but let's say, staying aside and contributing, so he can still, let's say, support the company even if probably he will step down, not suddenly, but at least in a couple of years, three years or something like that.

00:19:21] Regarding the progress of Brunello Cucinelli's succession plan so far, is it fair to say that you are more confident than concerned?

SC [00:19:38]: Yes, definitely. It's okay. It's like that.

00:19:43] You talked about the diversification of the products for Brunello Cucinelli. How do you assess the progress here so far? Which ones do you think are progressing well vs where do you think the changes or challenges are greater than expected?

SC [00:20:05]: I think that they have tried, let's say, since a while to diversify. There's been a point in time a couple of years ago, four years ago in which they tried with perfumes, they have not been so successful, so I believe that they are fine-tuning the introduction of this new product, even, let's say, doing a number of alliances with the more specialised companies to play better on the market. In a way, probably the creation and the generation of those legs will not be as easy as probably somebody might think because each market needs a special ability and moves with the proper, let's say, rules. I believe that they have passed already the learning phase, and they are now ready to really making sure that these additional legs start working properly according to the level of marginality they have and the level of turnover that they expect. Probably not all the legs will start working properly at the same time. Obviously, this is even positive. You cannot do everything at once. You can you originate a number of opportunities and then you make sure that some of them go positive, keep contributing to the turnover and marginality, and this is positive for the company.

In general, they will continue to do this activity. They will buy additional management, specific management for each new leg, making sure that management will adhere to their values and grow in this sector. The size of the company now is so big. They reach mostly all the countries around the world. The vision is very clear and is a healthy vision in a way, so I think that even with some errors along the way, they will continue to do good stuff.

YT [00:22:20]: You mentioned that probably not all the legs that it's trying out will grow. Which ones do you think have more potential vs which ones probably won't grow as…

SC [00:22:34]: I believe homeware is difficult. It's not easy. There are other specialised companies that are doing this type of activities since time and they know the market much better. I think that easily, the licensing activity that they are doing on the glasses and the perfume might give good satisfaction to them, so I see these two legs as a positive initiative that they have started, and this will continue to grow over time. Consider that at the moment, the number of communication, the amount of communication, the spending in communication compared to the other companies of Cucinelli in these two legs, let's say, and perfumes is relatively low, so if they keep investing in this, I'm sure that they will grow a lot.

00:23:47] How different is the margin profile between the licensing and the traditional business for Brunello Cucinelli?

SC [00:24:00]: Let's say that in general, the way I perceive this is the following. When you do a traditional activity of sales, you have two contribution. You have one contribution on the revenue side and then you have the relative contribution on the marginality. When you do licensing, you mostly have only the contribution on the margins, and the perception is that every activity that is performed on the market gives a contribution to the EBITDA of the company. This, in a way, can create a little bit of confusion in the analysts, especially for the listed company. Nevertheless, structurally, the business we are in is made up of two things. You sell goods and then you have revenue and EBITDA or you licence your brand and you have EBITDA only, so if you have a good view of the balance sheet of the company, you understand how all these parameters are moving in a way. No doubt that the licensing is the best option you can get. I mean, because if you have no headache and you just have the contribution in terms of marginality. Obviously, you can do that only if you have a solid brand, and I believe that Cucinelli that is active since decades has a solid brand and will continue to have a solid brand, so licensing is a good contribution to their balance sheet.

00:25:36] How would you quantify Brunello Cucinelli's near-term growth outlook, and do you expect the current momentum to continue? For example, how has the Spring 2027 collection been received, and what does this indicate about brand heat and desirability?

SC [00:26:05]: The perception I have, if I put myself in the shoes of a final customer is that they are scaling up the level of quality of their products. They are becoming more iconic, so they are moving up into a market share of richer people or as you used to say, ultra-high net worth individual. They are proposing themselves as the top quality level provider of this type of goods, and this is a positive stuff. The bandwidth of products they are able to propose to the customers goes from, let's say, standard sweater, EUR 1,000 or a little less to very high-end products that cost very high price, so they are enlarging the customer base they are approaching to.

00:27:07] How has the customer mix evolved for Brunello Cucinelli, if we look at the last five years vs where it is now? How should we think about the mix between more aspirational vs high-net-worth customers?

SC [00:27:27]: If you go back to, let's say, five years ago or even more, the type of customer of Cucinelli was, let's say, a top manager, but was a manager with somebody working with a salary, let's say, with a very high salary, but with a salary. What they are trying to do now, they are pushing strongly with products for men and women into the very high-end product, into the rich, rich people that they were not approaching, let's say, five or 10 years ago, and I believe that they will continue in this trend. They will create probably special collection capsule that will push very high in terms of positioning, in terms of pricing, trying to keep, let's say, the richest people in the world. Consider that Cucinelli you might have read in the paper, he has a strict relationship with the special sector of the business on a yearly base or every once in a while is doing, for example, let's say, brainstorming with Silicon Valley CEOs or things like that, so with all these, let's say, is leveraging on a number of tools to make sure that he captures more and more ultra-high net worth individual and obviously, consistently is developing his collections over the years with more and more exclusive products to be proposed to these people.

I see a sort of consistent growth that are moving from, let's say, people that have a salary and buy high-quality products to people that do not have a salary that are very rich and can pay whatever you like for an iconic product. Let's say, he is moving into or he is adding to his portfolio iconic collections to be proposed to this ultra net worth individual.

00:29:43] Compared to competitors such as Loro Piana, from LVMH Group, Zegna and so on, how much more runway do you expect to see from Brunello Cucinelli pushing even further with the penetration of HNWIs [high-net-worth individuals]?

SC [00:30:06]: Let's say that Cucinelli pushing towards this direction is directly going into the market that was a natural market for Loro Piana, Zegna, Kiton and other companies, so he is invading a new territory. No doubt, there will be, let's say, he has to fight in this sector. Obviously, you fight with the collections. I believe that Cucinelli is also a company that is able to balance price-wise, the products properly on the market, and he has a lean organisation that will contribute to generate good margins vs the right positioning of the prices. The real war will be over there, so the combination of the right product with the right price with the right, let's say, environment in which you propose the products will be key for the winner of this race. Obviously, we will see in the next future a fight between these top players around the world in which, in my opinion, Cucinelli will continue to play a good role.

00:31:26] You think that Brunello Cucinelli's real competitive strength is in its pricing strategy, while its product is also relatively competitive. These are the two levers with which we should expect the company to take market share from the other players we discussed. Is that correct?

SC [00:31:47]: Correct.

00:31:49] I think the other players we've mentioned have also been doing well. Where do you see the competitive threats coming from?

SC [00:32:06]: I believe that somehow in the world, there will be a sort of consolidation of the potential customers, the end customers towards a few brands. Today, we have, let's say, a number of brands that are approaching to this type of market. The game is to make sure that you are not winning into a niche, but you are winning globally. It's also true that the contribution to the number of new ultra-high net worth individual is always positive, so we are getting more and more people that have the ability to buy expensive product or luxury goods, so we might expect a growth in the sector of the different player, but each one growing at a different pace, and probably Cucinelli has room to grow faster compared to Loro Piana, Zegna and the others. Consider another thought, consider that Cucinelli, as I said at the beginning, is a company that is positively perceived from the general public. If you end up with Zegna or even more with Loro Piana, those are companies that do not have a physical person that is promoting the company, managers. In the case of Cucinelli, there is a physical person that is perceived very positively, has a lot of empathy.

This is a difference between, let's say, this is the real difference that Cucinelli has towards compared to the competitors, and I believe that he will leverage a lot on this. Consider, for example, that lately, we have seen a movie on the life of Brunello, you don't have the same movie for Zegna, you don't have the same movie for Loro Piana. You don't have the same movie for Brioni or any other player in the sector, and this is making the difference on the market.

00:34:25] We discussed the succession plan, but could you expand on the benefit that you think Brunello Cucinelli himself brings? Is this about more efficient marketing or him being able to engage more with the customers that the company wants to attract? Or are there any other benefits that you think other brands wouldn't be able to achieve?

SC [00:35:05]: I think that Cucinelli, I mean, when you manage a company, there are a number of factors that will give you success or not success. On one side, you have to make beautiful collection. You have to deliver good quality. You have to deliver a communication that is consistent with your product, and you have to deliver, let's say, the way you propose yourself to the final customer in an harmonic way. Your price, your doors, your employee, the communication you deliver must be consistent. I believe that Brunello himself. I mean, the person Brunello has been fantastic in this, and he is showing his face and is proposing his face and his face also, the way he moves his body is consistent with the philosophy that he is delivering and with the product portfolio that he is delivering. It's quite unique in this sense, and this is the reason why it's growing extremely, let's say, extremely solid in a solid way, and if you see the world of the analysts, the world of the final customer, the press in general are always keen to give him, let's say, a good welcome.

He's a good friend, in a way. No other company in the world in our sector is able to deliver the same stuff at the same level. Will this continue to be like this? In my opinion, yes, until Cucinelli is there. Probably, yes, after Cucinelli because Cucinelli is preparing his successor to share the same philosophy. Obviously, what will be missing is that you will never be able to replicate a person in total, so there will never be another Brunello having the same ability to talk to the people and be present so heavily on the communication media, and this is what is making Cucinelli winning until now.

00:37:35] You mentioned the shift in terms of the targeted customers that Brunello Cucinelli has been able to attract. Comparing the company to other brands such as Loro Piana and Zegna, how different are the customers in terms of the mix and dynamics? What major differences do you see?

SC [00:38:15]: As I said, in a way, I would not say that Cucinelli is shifting. I would say that Cucinelli is adding additional customers, so it's elevating the level of new customer is approaching. He's keeping the old level of customers and he is adding additional customers. Loro Piana and Zegna, probably they have to do vice versa. They are already accessing top spenders, and they have to make sure that they can conquer lower-level customer, let me call it like that. This is not an easy stuff. In my opinion, it's easier to make better collection, iconic products to conquer higher spending customers than doing vice versa. Because if you do vice versa, you might end up to dilute your brand, so it's a much more difficult activity to be done. Obviously, this is something that is contributing a lot to the turnover and marginality of Cucinelli. If you add higher level spenders, also your marginality will benefit a lot and it's going to benefit a lot from this in the next years.

00:39:31] You mentioned that Brunello Cucinelli was able to keep its somewhat aspirational customer base while also expanding into a wealthier customer base. Do you see that being sustainable, or could that be driven by the Brunello Cucinelli movie, for example, or the recent collection, which could be temporary?

SC [00:40:01]: I think for this company, this is sustainable. Consider that it is a company that is below EUR 1.5bn turnover. I believe, and I'm quite sure that they want to double this turnover in the next, let's say, number of years, and they are heavily thinking on how to expand the presence, their presence in the market. There is another thing that will contribute a lot to the growth of the company. Today, they have two legs in terms of market distribution. On one side, they have their own doors, so this number of privately owned shops, and they also have quite a big amount of sales towards the wholesale channel. Probably this channel will go through a transformation, so more and more doors will migrate into the property of Cucinelli, so instead of selling wholesale, they will sell retail, and this way, they have the ability to grow in terms of turnover, so instead of selling wholesale jacket, you will sell direct to final customer the same jacket with a higher price, obviously.

You will also get contribution from that distribution channel, so this will happen mostly toward the players in the sector, and I believe that we will see the growth of turnover of most of the top players, but being Cucinelli smaller than the bigger players, so they have more room to grow, more high street to reach, more doors to open. Eventually, it will grow, let's say, much more than the others.

00:41:51] Let's elaborate on the channel strategy or shift you mentioned where Brunello Cucinelli will probably transfer more of its wholesale doors into DOSs [directly operated stores]. What level of transformation do you expect? We've already seen quite a significant shift over the last few years. How much more of a shift is realistic?

SC [00:42:27]: I mean we all have seen what has happened in the United States with Neiman Marcus and all the things. The wholesale channel is struggling. I mean this is a fact. I mean, over the years, we have seen many of these things happening. I believe that each brand is also willing to give a special… On one side, we have a channel that is struggling. Obviously, those channels more and more will be configured as, let's say, real estate company renting spaces to the brands. The brand will rent the space, will run the POS. Actually, this will become a concession or a direct show. On the other side, I believe that when a brand is growing, the will of the brand is to make sure that you give the best experience to your customer, and if you want to do that, you have to drive also the contact with the final customers. I'm sure that Cucinelli, Loro Piana, Brioni and all the others want to go in this direction. Obviously, it's a matter of investment, but all of us are willing to reach the final customer, and I believe that all the sector will make sure to increase the retail experience for each customer. Cucinelli will continue to do that, and I believe that this shifting of the channel is not over. Probably, I would say, is at the beginning and will continue in the next years.

00:44:21] In terms of Brunello Cucinelli's own-store DOSs, you mentioned that there are still opportunities for the company to add more distribution points. By region or store type, what opportunities are we talking about here?

SC [00:44:52]: If you look at the geography of Cucinelli, you see that Cucinelli in terms of presence is quite strong in Europe and North America. It's relatively strong in Asia and it's strong in Japan. I believe, let's say, that probably looking at the next 10 years, let's say, Asia, there will be a consolidation of the market in North America that will continue to be the key market for Cucinelli and Europe as well, but I believe there are other two markets very important for this brand that is not, let's say, dominating at the moment. One is China. Another, I would say, is, in general, the presence in the Middle East. Middle East, all the crisis sooner or later will be over, and China is a nation that is, let's say, growing heavily in the last decade, I would say, will continue to grow in the future. There will be more and more ultra high net worth individual and will be even more integrated with the western world. There will be a lot of communication let's say, with the old markets. I think that Cucinelli will be a key player in this market as well. Obviously, China will be more long term, while the development of Europe and the continuous development of North America is today, let's say.

00:46:32] Do you think Brunello Cucinelli will be as successful in the China and Middle East markets as it has been in the Europe and US markets? Are there any aspects of communication or style that might not translate into those markets?

SC [00:46:54]: Consider that Cucinelli is perceived… If you think of Brioni, I don't want to talk about my company, but if you think of Brioni, Brioni is perceived as a formal company. Cucinelli for a number of reasons, they can do formal, but it's perceived mostly as an outerwear casual company. China is less formal than Europe or the United States or Japan, for example, so I believe that the product lines and the heritage of Cucinelli is extremely consistent with the perception of style that Chinese have. I see a growth of Cucinelli with the Chinese people extremely positively.

00:47:45] Across the distribution points that we've discussed, you talked about how the retail experience will be very important, which all the brands have been talking about. How do you assess the overall experience that Brunello Cucinelli offers? How does it compare to the industry peers that we've discussed?

SC [00:48:15]: I mean, if you consider the industry peers in general, consider that all of them are giants and all of them have pretty much the same ability to deliver the best experience to the customers. The difference is in the value that each brand is expressing. Cucinelli will express his own values, while Loro Piana, they have different values and so on. It's also true that all of them are doing heavy investment in the buildings, not in the shops, in the buildings that will host their collection, where they will host their customers and provide the experience. I would not say that Cucinelli has a competitive advantage in this, but I would say that Cucinelli can deliver the same experience as Loro Piana or Zegna or any other big player in the sector. Then the collection, the flavour of the cast of the company and a number of intangible assets will make the difference and will drive the final customer to choose Cucinelli or the other.

00:49:34] We've discussed the growth levers for Brunello Cucinelli's top-line and sales growth. Are there any other topics that you think we should highlight on this theme?

SC [00:49:52]: No, I think that we covered pretty much all the issues. I would only emphasise the fact that Cucinelli has to cross a critical moment that is the moment in which he personally will decide to step aside. At that moment, since all the people are used to have one face for the company, probably, he has to decide if there will be a face or something else different from the face representing the company. That choice will be critical, will be a phase, a transition. I don't know which will be the decision of Brunello, but that choice will be critical.

YT [00:50:43]: What are the potential options you are talking about?

SC [00:50:49]: One of the things I was thinking lately when I was reading your question for the Interview is that probably he will choose one of the daughters to represent the company because I believe that he wants the company to be represented by a face, by someone, by a human being that will keep delivering messages to the community that is approaching Cucinelli. This is one option, and I believe this is possibly the best option or the option is evaluating. Another option is that he will choose someone not from the family, one of the two CEOs to represent the company to delivering all the quarterly results and all the things and manage the communication. In this sense, you will lose the family pitch, the family aptitude of the company, so the company would appear much more professional, but I don't know if this will end up to represent the company in a better way towards the customer base. Those are the two options I see he has in front of him.

YT [00:52:06]: Which one do you personally think would work better?

SC [00:52:12]: If I would be Brunello, I would choose one of the daughters. I don't remember the name of one, but there is one that is very much communicative. She is very humble into delivering positive messages and also the way they manage social media, the stories on the social media are consistent with the philosophy of the company, so I would choose the daughter choice.

00:52:42] We talked about Brunello Cucinelli's sales growth outlook. On the cost and supply chain side, based on the capacity and artisan production model that the company currently has, do you think that can support 10% or so annual growth for several years going forwards?

SC [00:53:11]: Let's say that in this sense, having the ability to manage the supply chain will be critical for most of the companies in this sector because you need to have artisans that are able to do specific products and so on. I believe that Cucinelli over the years, took care of his supply chain in a special way, so he is very much respected from its suppliers. Even in cases in which there have been a problem like one in the pandemic, Cucinelli has always been the one protecting his supply chain, so he has a number of faithful provider that will continue to support him, and they will continue to grow with him, so he's not the one looking for the best price, so making bargaining, let's say, with the supplier of the best price, but it's the one that is making sure to have a steady capacity, a good allocated capacity. I believe that his management, in fact, one of the two CEO is responsible specifically for the supply chain. His management is able to consistently communicate with the supply chain and making sure that they have enough capacity to support the growth of Cucinelli.

Obviously, there is a limit. I don't know which is the limit, but Cucinelli, I mean, can grow easily to EUR 2bn-2.5bn with the same supply chain he has currently or potentially adding additional suppliers, additional capacity based on the need, so he has all the management to, let's say, make sure that supply chain keeps stable and high-quality level as it is today, and that's my opinion.

00:55:14] There's a growing trend around larger luxury groups investing a lot in or acquiring the manufacturing capacity, with many of those based in Italy as well. Do you see this materially changing the availability, bargaining power or cost for more independent brands such as Brunello Cucinelli?

SC [00:55:43]: I believe that, yes, there have been brands like Louis Vuitton, I mean, Kering and all the others that are integrating vertically the production in a way, not the supply chain. Nevertheless, they are doing cherry-picking, so they buy single companies that are extremely specialised in some sector, and they bring the know-how internally. Normally, they are small companies, and those small companies will integrate vertically with the bigger companies, let's say. There has been only one big consolidation on the market, and this has been Florence, and that's the biggest that we have seen in the last 10 years in a way, but I think that a company like Florence is also interested in being a supplier generally of different brands, so they are not integrated per definition vertically. I'm sure that probably sooner or later, probably they're already doing Cucinelli would be also buying from this group of provider. In general, I see much more Cucinelli, let's say, taking care of his usual or standard provider, standard, let's say, provider and helping them in managing their growth as the mother company, let's say, the Cucinelli company will grow. There will be a sort of vertical integration in Cucinelli as well.

I've seen that possibly three years ago, he bought what remained of the production side of Brioni in Penne. By doing this, he added to its internal production capacity, the ability to do tailored products, jackets and all the things that Brioni used to do. I see him integrating in the company specific products, but taking a lot care of external provider that are fidelise, faithful provider that are logically integrated with Cucinelli, all those separate companies, and they will support all the management support, they will give all the management support to let them grow organically and in a clean way.

YT [00:58:14]: Well, thank you so much for sharing that. We'll conclude the Interview there. Thank you so much for your time and insights. It's been a pleasure having you here. I really appreciate it.

SC [00:58:34]: Okay. Thank you to you. Okay. It's been interesting for me as well.

YT [00:58:37]: Well, I hope you have a great rest of your evening and week ahead.

SC [00:58:43]: Thanks to you. Bye-bye.

YT [00:58:45]: Thank you. Bye-bye.

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