Italian luxury group Brunello Cucinelli has projected a 10% decline in sales for 2020 due to the ongoing coronavirus crisis. In response, the company has committed to donating €30m ($34m) worth of unsold garments to charitable causes. This move makes Cucinelli the first luxury group in Italy to provide an update on its second-quarter performance. The company experienced a 30% decrease in sales during the first half of the year but remains hopeful for a recovery in the latter half.

Chairman Brunello Cucinelli expressed optimism about the future, predicting a positive third and fourth quarter that would result in only a slight decrease in turnover for 2020. Additionally, the company expects a 15% increase in sales for 2021, surpassing the 9% growth seen in 2019.

Cucinelli’s limited exposure to China, where the crisis originated, helped to minimize the impact during the first quarter of 2020, with group revenues declining by just 2.9%. However, the lockdowns imposed between April and June posed greater challenges for the luxury group.

Despite these hurdles, Cucinelli reported sales growth in China as the country eased its lockdown measures. The company is also optimistic about prospects in Europe and the United States, key markets for its luxury cashmere sweaters. Orders for the upcoming autumn and winter collections have already been confirmed.

To address the excess inventory resulting from the crisis, Brunello Cucinelli has decided to write down €30m worth of unsold products. The company stated that these items will not be reintroduced in 2021, as that could potentially harm the brand’s contemporary image. Instead, the garments will be donated to humanitarian causes.

The proactive approach taken by Brunello Cucinelli in addressing the impact of the pandemic, coupled with its commitment to corporate social responsibility through the donation of unsold stock, highlights the brand’s resilience and dedication to its values. As the luxury industry continues to navigate the challenges posed by the coronavirus crisis, it will be interesting to see how other luxury brands respond and adapt to the evolving market conditions.

Useful links:
Brunello Cucinelli Official Website
Business of Fashion