Luxury Brand Brunello Cucinelli Grows Sales Despite Inflation

In the first quarter of the year, Italian luxury group Brunello Cucinelli, most renowned for its cashmere apparel, witnessed sales growth of 33% at constant exchange rates.

The increase was mainly attributed to performance in the Americas and a resurgence in Asia, reflecting the emergence of the “quiet luxury” trend.

The company observed that the rise in demand in North America seemed to be “structurally increasing,” and the “decidedly favorable trend” in China reinforced the group’s prospects in this critical market. The firm recorded sales of $290.6 million in the quarter ending in March and reaffirmed its anticipation of a sales boost of about 15% for the year.

The Influence Behind Quiet Luxury

Quiet luxury has emerged because of several factors, such as a backlash against the flashy and noisy aesthetics of pop culture, as well as the prevailing economic conditions that have left many consumers grappling with financial uncertainty. Consequently, they are increasingly seeking to make smarter investments in the form of high-quality, timeless pieces that will endure and ultimately prove more cost-effective.

Shows like “Succession” have contributed to the rising popularity of the quiet luxury trend. The characters on the show are frequently adorned in refined, classic pieces that convey an air of sophistication and refinement, thereby increasing the appeal of these styles among viewers. As a result, there has been a growing consumer demand for similar apparel.

The Fast-Fashion Take on Quiet Luxury

The aesthetic has become a look demanded by many, even those who can’t necessarily afford to buy from labels like Brunello Cucinelli, and, in turn, has created an opportunity for other retailers catering to different price points to hop on the trend.

And while it may seem counterintuitive for fast-fashion brands to venture into the realm of quiet luxury, their operational model, which centers on regularly launching new clothing lines and their capacity to track and react to style trends, make these types of retailers well-equipped to participate in this segment by offering consumer pieces that create an “old money” look.

During the earnings call in March, Lulu’s acknowledged the ongoing controversy regarding its fast fashion label. However, the company also revealed that approximately 83% of its units sold did not necessitate markdowns. Lulus credited this accomplishment to its inventive and data-driven product development approach, which helps mitigate fashion-related risks and facilitates streamlined inventory management. By adopting this strategy, Lulus can remain agile in adapting to changing consumer preferences.

Payment Solutions That Make Quiet Luxury Attainable

While fast-fashion retailers hold a competitive advantage in attracting younger consumers by providing a constant influx of new styles and trends, they also offer convenient payment methods like buy now, pay later (BNPL). By offering BNPL options, these retailers can target the 18-24 age demographic, which may have limited disposable income but still aspire to stay up-to-date with the latest trends.

Those who choose to invest in quality over quantity still have the option to do so through BNPL and payment providers like PayPal as quiet luxury brands like Brunello Cucinelli and Loro Piana have them available on their websites.

Using BNPL options makes shopping more accessible and convenient for younger consumers, enabling them to purchase items they may not have been able to afford otherwise, further driving their interest in fashion and trends. According to PYMNTS’ February 2022 “Buy Now, Pay Later Tracker,” the adoption of BNPL was primarily driven by millennials and Generation Z, with millennials representing the largest group of BNPL users. The report also revealed that 44% of all Gen Z consumers were likely to use BNPL at least once before the end of 2022, compared to 37% of millennial shoppers.

How Brunello Cucinelli Is Building on Its Momentum

On an earnings call, Brunello Cucinelli Co-CEO Riccardo Stefanelli announced plans to establish a new manufacturing plant in Penne, Italy, furthering the company’s momentum. Penne is a historical production hub for sartorial menswear and home to the iconic Brioni brand, located in the central region of Abruzzo, Yahoo reported. The plant is scheduled to commence operations in the final quarter of this year.

On the call, Stefanelli lauded the skilled artisans and tailors of Penne for their cultural richness and craftsmanship.

When asked about the financial details of the investment by analysts, Stefanelli declined to disclose it, emphasizing that the project aligns with Cucinelli’s long-term strategy and will be developed gradually with the company’s business model remaining intact.

The brand’s decision to build a new manufacturing plant in Penne underscores its faith in the growth prospects of the tailoring sector, Yahoo reported, and ties in with the company’s 2013 acquisition of the production division of Sartoria D’Avenza, a company that made suits for four American presidents: Ronald Reagan, George Bush, Bill Clinton and Barak Obama.

The move to set up a new manufacturing plant is also reflective of the changes brought about by the pandemic. The shift to remote work and casual wear caused a significant decline in sales of tailored clothing. However, there has been a resurgence in the sales of sports jackets and suits with contemporary styling, which are more versatile and relaxed and come in unconventional colors, according to Yahoo.

“There is no doubt that we are reaping the fruits of the positive period that our brand is experiencing for the style it represents and perhaps also for the way we share our ideas with all of our counterparts,” Cucinelli said in a statement. “[With regard to] our market segment of absolute luxury, we continue to have a very positive vision for the entire coming year.”

The Future of Quiet Luxury

While quiet luxury might be considered a trend now, the concept has been around for a long time. As consumer preferences continue to shift, quiet luxury will have a continuous narrative in the fashion industry, ultimately serving as a reminder of the timeless elegance and craftsmanship that defines the luxury industry and as a call to prioritize sustainability and conscious consumption.

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