SOLOMEO, Italy — Italian fashion magnate Brunello Cucinelli takes time out from meetings with designers of his 2016 winter 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.”By Devon Pendleton; editor: Gail Roche.