The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
SOLOMEO, Italy — He has simultaneously been called "The King of Cashmere" and likened to a modern day monk. Indeed, these seemingly opposing notions of luxury and monasticism are an integral part of the curious, incredible world of Brunello Cucinelli, a university dropout who went on to build a global cashmere and luxury lifestyle business with a current market capitalisation of more than $1.5 billion.
Mr Cucinelli is known for his understated, deeply ethical approach to business building, rooted in a philosophy he calls "humanist capitalism." Every stitch of clothing his company creates is made in Italy, mostly in and around Solomeo, the 14th century Perugian hamlet that Mr Cucinelli has lovingly and personally restored over the past two decades and where his eponymous 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. Each year, the company donates 20 percent of profits — not an insignificant sum — to the Brunello Cucinelli Foundation, which most recently built a 240-seat theatre, in the company's signature understated hues, right in the heart of Solomeo.
But make no mistake. This is no saffron-robed idealist living in a fantasyland. Indeed, as Cucinelli’s now well-known rags-to-riches story goes, he managed to eke his way out of a childhood spent in abject poverty, starting with a single order of 53 cashmere sweaters in 1978, financed by a loan from a friend, and eventually took his business public in the Milan Bourse’s only IPO in 2012, becoming a billionaire in the process.
So while Mr Cucinelli’s approach may be different, he is no less canny and switched-on than some of his more over-the-top Italian fashion contemporaries. His business continues to grow by double-digit percentages even while the wider Italian luxury sector has remained stagnant in the wake of the global economic crisis. In May, Brunello Cucinelli reported a 12.2 percent increase in first-quarter net sales to €99.6 million (about $137 million) and said the outlook looked upbeat for the rest of the year.
But how do humanism, philosophy and doing good mix with the ruthlessly competitive global luxury sector? It wasn’t until my taxi rolled into Solomeo and I finally sat down with the man himself, did the paradox, and simple genius, of Brunello Cucinelli finally become clear.
In our latest CEO Talk, Mr Cucinelli explained his business philosophy to BoF, sketching his answers on plain white sheets of paper and taking liberal inspiration from the saints, thinkers and political leaders who have shaped the world around us, from Saint Benedict to Mahatma Gandhi, Marcus Aurelius to John F Kennedy, whose photographs dot the walls of his office.
BoF: We often talk about business models on BoF, but I feel like you have something more like a business philosophy. Today, I’d like to focus on that. Where did this philosophy of yours come from?
BC: Growing up, we had no electricity, no light at home. We had no running water. I’m in love with silence, because there were 13 of us in this country home. We did not own the house, mind you, and in the very same house there was just a dividing wall. There were 14 other people [on the other side], so it was like a micro-community. There were basically 27 people.
We would work the land with animals. We didn’t have any tractors or machinery. Our lands and fields were very tidy. They were very well looked after, because every square metre was supposed to produce something or yield something.
In the morning, in the summer, I would get up at five (I’ve always gotten up very early in my life) and I would go down the stairs and there was a stable there. My father, my uncle, they would go there and milk the cows, and I would go back home with the milk. We wouldn’t even boil it; we’d just have it the way it was. Everything was beautiful then, and still today, I’m in love with the land and the earth.
BoF: Growing up, your father played a key role in shaping your philosophy.
BC: His dream was to work in a factory instead of working the land. [Eventually], my father went to work for the factory and my brothers too. They did harsh manual work and did not go to school. But when my father came back home in the evening, he would always be a bit disappointed, bitter, because, of course, it was a hard job, although he did hard work before on the farm in the countryside too. But you see, he was subjected to offence and humiliation and that’s when the other parts of man are somehow triggered. I would see my father upset, with tears in his eyes.
Here I started developing a passion for monastic life, taking up an interest in spiritual life. You see, I’ve never been fascinated by daily life. I’m rather attracted to what these great thinkers of the world said.
Today, at 60, I say that when I was at that age of 15 or 16, I had already found my way, my root. I wanted to be and live like a guardian of human dignity.
BoF: So, you never had an interest in building a business with hundreds of millions of euros a year in turnover?
BC: No, no. It was both. I wanted to bring into work a form of life and philosophy that could be called contemporary, in my view.
The first 50 sweaters that I sold, you see, the joy and the happiness was the very same that I have today after selling god knows how many. Here, I had so much fun at that time when we were poor. We had nothing, no money in our pockets. When I started I had no money, but it was fine. I have always maintained that the true problem with man is the sort of spiritual mallet, which basically hits everybody.
I wanted a cure to treat this pain. When you feel something inside, everybody feels that. They call it the disease of the soul, if you like. The soul needs to be looked after on a daily basis.
BoF: What do you mean?
BC: I’ve always had beauty as a primary concept since I was a child, in the countryside. When I was eight or nine, my mother bought me for Christmas green corduroy trousers. So I tried them on. Then I went downstairs, took a spade, dug a hole and buried them. I didn’t like them. I’ve never worn anything green since then. [Laughs] You see what life is like?
I’ve always been a very strict person in myself. Always very demanding. So for example, I wear white corduroy trousers and I have been wearing them for 45 years. The same kind; in the summer, in the evening, the same. This morning I was wearing Adidas trainers and I’ve worn them for 40 years, the same model. But that’s why in the business I wanted to blend all this together.
Your soul must be involved somehow. I seriously believe that the future ahead of us, this is a time where there will be a combination of the mind and the soul.
BoF: Sometimes when I read about you in the press, it sounds like a fairy tale. You launched the business in 1978 with sweaters. How did you go from those 50 sweaters in one order to build the business you have today?
BC: I wanted to be a real expert, to have a specialty or niche. The business grew only with cashmere knitwear. 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.
When we started, we sold 400 sweaters in the first two to three months. Then, when we reached 1998 and 1999, it was 200,000 sweaters a year. We only had one tiny mono-brand store, with 75 percent exports, and only cashmere.
BoF: You had built a very successful, focused business. But what were some of the challenges you faced?
BC: It is never challenging when you only do one thing in life. It is difficult to do everything, but if you specialise in one thing, you can focus with your head bent over one single thing the whole day and you have less likelihood of getting things wrong. That’s what I wanted to do. I wanted to be known for cashmere pullovers.
BoF: So there were no difficulties, for example, sourcing cashmere? Or finding employees to knit the sweaters? Or scaling the business from 400 in the first few months to 200,000 a year?
BC: Well, it might sound like a lot to you, but in our district here it is not much. We have had over the years an average growth rate of 15 percent. It’s not really staggering. What happens in the meantime is you’re really specialising in something; your hands, your ability, your skills… you see, myself, for 30 years, I only touched cashmere with my fingers and you really see how fine-tuned your perception becomes. I wanted the cashmere culture to spread. Once someone processes the cashmere, someone else presses and irons the cashmere. When you do one single thing, you disseminate this kind of culture. You have this culture that is inborn.
BoF: As someone who grew up in poverty, how did you encounter a luxurious fabric like cashmere?
BC: This is a great question. This district is very famous for knitwear. You’re surrounded by really valuable knitwear. Not cashmere, but still valuable.
So, why cashmere then? One, because I never thought it would be thrown away. I wanted to manufacture something that theoretically never dies. You see the idea of guardianship; it all ties in together. When I started thinking about it, I drew inspiration from Benetton. 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, who was wearing a ponytail and was very fashionable. You could tell that he had taste and flavour. Alessio, he was 28 and I was 25, but he had such a taste and flair. I said, ‘I’d like this to be orange.’
‘No, no. This is cashmere, you can’t possibly dye it. You’re crazy,’ he said. But we kept doing it for 30 years. Although we were very close friends, we always treated each other with some kind of respect. ‘Alessio, you’re so young, how can you say we can’t possibly manage it? We can’t possibly do it? Yes, yes, come on, we can do it!’
And I convinced him and talked him round. I took these six sweaters, three V-necks, three round [necks]… these six sweaters in six beautiful colours. In terms of the product, it was innovative. Over these 15 to 20 years, I was seeking perfection for one single thing. I was the man with the sweaters; the cashmere guy.
So the company grows and we started buying a little piece of the castle, where we would have dinner and we would see after work that the castle was really falling apart. Everything was torn. The refurbishing works started, the guardian, the community of the land, and then the product. Just these things, that’s it. The company must make profit but with ethics, dignity, morality. These were the three great ideals of my life.
BoF: What happened one day that you decided, ‘Okay, I want to create a broader business, I want to do more than just cashmere?’
BC: The buyers — especially the Americans — started taking an interest in and looking at what I was wearing; how we in the showroom would dress and how we would put together the displays. It was the way we were presenting the whole thing. In places like Neiman Marcus and Saks, you can’t just sell sweaters. To sells sweaters only is not good enough.
So, they basically started asking me, “Why don’t you go for the total look?”
“The total look? Well, all I do is sweaters!” But you see, the kind of coats that I would wear: the blazers, trousers, shoes — they noticed. That was exciting, and at the beginning of 2000 we decided to go for the total look.
BoF: You’ve said previously that 2006 was the year when the Brunello Cucinelli brand found its identity. What happened?
BC: We were now an apparel company doing Italian luxury ready-to-wear. I don’t know about taste, but I can definitely vouch for [our] craftsmanship and quality. And we do have a taste which you can see everywhere.
In 2003 and 2004, we started opening our first own stores and department stores also starting allotting us our own space. The end of 2006 is when we established our taste. The total look.
The business started [with] 90 percent knitwear and ten percent something else. But then, knitwear [went] down to 35 percent. But nevertheless, 60 percent of the collection is made out of cashmere. In the winter collection nearly everything is all made of cashmere: trousers, blazers... everything.
We started opening four to five stores a year. We kept our multi-brand channels, but we also started opening our mono-brands stores — five, six, seven a year — so that we could have both channels. The multi-brand is very important to me; it is key because it gives you important feedback and it’s very important for your collection.
BoF: You said that the moment of clarity for the brand came through menswear, while the brand initially started with womenswear. How did it come through menswear?
BC: I have always thought that a brand becomes very strong with menswear. For those like us, whose products are both for men and women, you can tell that it comes from the same fashion house. You really become a strong brand when your menswear is strong. Many purchases of menswear are actually made by women.
The only thing that is not easy to do is to be the very same company [with] the same tastes for menswear and womenswear. That’s difficult to achieve. For us we’re not a fashion brand, but we’re also not a “classic” classic brand, so it’s easier to achieve that. When we design our collections, menswear and womenswear, you see the two departments are mixed together. When we wear our samples, five or six of us, we say, ‘Do you feel comfortable, ladies, if you come out dressed like this? Now, you get dressed to come out to have dinner with us.’
BoF: I want to talk about the IPO. It was a big moment for your company. I couldn’t have imagined that with a philosophy like yours, you would have the idea of working with public investors or that they would even be open to your approach. Were you not concerned that it might compromise your philosophy?
BC: When I was 55 years old, I was already thinking, what about this company in 20 or 30 years' time? What will happen to it? Three or four years later I decided to go public. I said to the bankers, 'I'd like to go public but on the condition that you bring the investors here [to Solomeo].'
I said, ‘You are an investor. You come here to see the factory, speak to me, meet my family and the people. And you start studying the case. I want you to understand what I want for my life, for my company, for the future.’ I believe in capitalism, but it must be contemporary like everything else in mankind. And for me, contemporary capitalism is a human capitalism.
So, the first investors arrived. They saw the factory and I spoke to them about the corporate philosophy. I laid everything in front of them. I spoke about a gracious growth, I spoke about partners and investors, maybe for a century – all of this before the IPO. Some of them were taken aback in a positive way. They said, ‘We like it very much.’
I said to them, ‘Are you looking for a company that grows very rapidly? Because that is not us. Do not join us. Are you thinking of a company that really chases profit? Do you want us to focus on our stakeholders and employees?’ That’s first and foremost for us. We want to make a profit, that’s for sure, but a healthy, fair profit. If I am rich, I can buy anything I want. But I want to know that it respects a human being, the community and the profit.
Then the week of the roadshow arrived and I said, ‘You must be crazy. You are supposed to meet 10 different clients in a day? In 10 days?’ But in only six days, we covered the book 18 times. So we decided to stop and luckily enough, we have the best of the top names in our shareholders book. And then, today, two years later, I’m at peace. I’m very happy. Not one single investor told us that we did something different or we changed our policy.
BoF: This is a very different approach from many other luxury businesses.
BC: I think that in order to stay in the luxury segment, you must manufacture special goods with high craftsmanship quality, but also distribution must be careful. We are not talking about ‘accessible luxury.’ What is this ‘accessible luxury’?
Today we call things ‘super luxury.’ I never say that; it’s a very bad word. I prefer to use luxury and beautiful, but there is no accessible luxury. There is no aspirational luxury. It’s either luxury or not luxury. If you spend $3,000 you know exactly who manufactured it, how they behave, what’s their profitability, why do they want to make so much money out of it? Young people perceive this strongly.
BoF: If you look forward, is there anything you’re worried about anymore? Have you figured it all out?
BC: No, I don’t think I have figured it all out. But the idea that I have is that I am leading a very sane kind of life. Today could be the last of my life.
Towards the end of this year I will be presenting a project to the international press. And it is a project for the next five centuries. In this company I have tried to be a guardian, to have all the different people defend the company, to line them all around. While things rest, the world regenerates. This is the way it goes. I started with nothing and built something, and one day it will finish, and something new will come out of it. This is the way we go. It depends how you approach the world.
I like very much what the Dalai Lama once said: “Two days in a year there’s nothing you can change about: yesterday and tomorrow.” But the problem of accepting to live well today is to live a healthy life — just think it is your last day. You can only achieve this through philosophy, this kind of awareness.
This interview has been edited and condensed. Imran Amed travelled to Solomeo as a guest of Brunello Cucinelli.
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