Italian luxury brand Brunello Cucinelli saw a slight decline in revenue during the first quarter of 2020 due to the impact of the Covid-19 pandemic. The company, renowned for its cashmere products, generated €156.7 million in revenue from January to March, marking a decrease of 2.3% compared to the same period last year. At constant exchange rates, the decline was 2.9%. However, despite these challenges, Brunello Cucinelli managed to maintain its performance by leveraging its strong position in the wholesale channel, which accounted for half of its revenue.

Most of Brunello Cucinelli’s markets experienced a decline in sales, with the exception of North America and the rest of the world. Revenue in North America, which contributes 32.4% to the company’s total revenue, grew by 9.5%, while sales in the rest of the world increased by 6.6%. The decline in sales can primarily be attributed to the closure of the brand’s own stores following Covid-19 lockdown measures. Sales in China, the first country to implement anti-coronavirus measures, dropped by 27.1%. In Italy, which represents 15.6% of total revenue, sales fell by 13.9%, and in the rest of Europe, they were down by 2.2%. However, the company did note early signs of improvement in China as the health situation there begins to normalize.

When it comes to sales channels, Brunello Cucinelli’s direct retail channel, consisting of 107 monobrand stores, experienced a decline of 7.2% compared to the first quarter of 2019. Franchised stores, on the other hand, remained stable with a slight increase of 0.4%, while sales to multibrand clients and department stores saw an increase of 1.8%, reaching a total of €79.5 million. Despite these challenging times, Brunello Cucinelli’s founder and CEO remains optimistic, citing substantial wholesale orders for the Fall/Winter 2020-21 collection. The company is focused on effectively managing the current year while also developing strategies for 2021 and 2022.

Brunello Cucinelli attributes its ability to navigate the crisis to its flexible production structure, strong relationships with suppliers, reliance on the wholesale channel, and low level of debt. The company recently announced a change in the date of its Annual General Meeting and withdrew the proposal to distribute dividends for the 2019 financial year. In an open letter, Brunello Cucinelli expressed his belief that humanity will emerge from this crisis better than before, viewing it as an opportunity for growth and improvement.

For more information about Brunello Cucinelli’s Q1 2020 results, please visit their official website.

To learn about the impact of Covid-19 on the luxury fashion industry, click here.