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Brunello Cucinelli in Solomeo, Umbria, Italy, on May 10.Fabrizio Troccoli/The Globe and Mail

Rolling into the head office of Brunello Cucinelli, at the base of the medieval hill-top village of Solomeo, deep in central Italy’s farm country, is like rolling into an exclusive country club. Solomeo is a company town like no other.

The attached factory, where knitted cashmere sweaters and cardigans that sell for several thousand dollars apiece are made, is surrounded by gardens and lawns, towering cypress trees and long, pool-like fountains crossed by footbridges. The airy interior of the vast, crème-coloured building is quiet, spotlessly clean – and calming. Billboard-sized photos of classic Renaissance Art, such as Michelangelo’s Pietà and David, hang from the ceiling. The 1,000 employees, mostly women with deft fingers, are well-dressed.

The canteen next to the factory, where employees spend 90 minutes for lunch, could be a high-end restaurant. Waiters in uniform serve healthy, four-course meals on proper white china plates. Bottles of Cucinelli-branded virgin olive oil and wine fill the tables. “To me, it all seems like a university campus more than a factory,” says Carolina Cucinelli, 33, the company’s vice-president (her older sister Camilla is the other vice-president).

Overseeing the luxury empire is her father, Brunello Cucinelli, 70, who is executive chairman and creative director. He seems more like an enlightened feudal nobleman than a controlling shareholder of a public company in the hypercompetitive fashion industry. He and his family essentially own all of Solomeo and the 500 hectares of farmland surrounding it. He has restored its oldest, loveliest buildings, and built a tailoring academy and a 200-seat Renaissance-style theatre; its performers have included Tilda Swinton, Charlotte Rampling, John Malkovich and Isabella Ferrari.

His biggest accomplishment has been building Brunello Cucinelli SpA, the legal name of the company whose shares trade on the Milan bourse, from nothing, turning it into a pocket-sized global company at the most expensive end of the luxury spectrum. Cucinelli today has a market value of €6.6-billion (almost $10-billion), double the level from the company’s 2022 low. Sales in 2023 were a record €1.1-billion (about $1.62-billion), with profit of €124-million ($183-million), up 42 per cent over 2022.

Cucinelli is one of the few luxury-brand companies still on its way up. Some of the biggest and best-known fashion houses, including France’s LVMH (Fendi, Givenchy, Christian Dior) and Kering (Gucci, Yves Saint Laurent, Brioni) have gone into reverse in the last year. Kering shares are down a punishing 38 per cent. Cucinelli is up 15 per cent.

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Brunello Cucinelli's expert tailors at work.Fabrizio Troccoli/The Globe and Mail

The question is whether Cucinelli, the company and the man, can keep the momentum going while maintaining the quality of the cashmere and non-cashmere products that afford them the audacity of charging retail prices equivalent to five-star holidays. Cucinelli’s Canadian site – it has one boutique in Toronto, where it created a commercial partnership last year with Holt Renfrew, and another in Vancouver – lists a linen blazer for $4,695 and a cashmere sweater for $4,200. Even scarves can cost $2,000 or more.

Listed luxury goods companies sometimes run into trouble as they expand. Investors want fat profit margins. Management often responds by cutting costs, which can compromise quality. When quality falls, brands can lose their allure fast, along with their status symbol prestige. Some “luxury” women’s handbags, for instance, have fallen from grace owing to their ubiquity – that is, their lack of exclusivity – declining quality and penchant to inspire knock-off artists.

“As luxury brands like Cucinelli become global players, they face increasing scrutiny from investors to deliver consistent quarterly profits,” says Francois Kress, a luxury industry veteran – formerly of Prada, Bulgari and LVMH – who is chief executive of the soon-to-be-launched Frère clothing brand. “This pressure, coupled with the scarcity of high-quality materials, may compel these companies to cut costs and hike retail prices, diminishing product quality and making these luxury goods less desirable to even the most affluent customers.”

Cucinelli has another challenge besides maintaining high quality: climate change.

It’s not just that rising temperatures reduce the need for sweaters of any price; it is that the warmth can impede the growth of the wool on the prized cashmere goats in Mongolia, where Cucinelli buys most of its raw cashmere fleece. The animals’ most coveted wool – the light, ultrasoft variety that is prized for its texture and insulation ability – is found beneath their rough outer coats. Winters that are less harsh translate into less growth of the inner wool. The “Operating risks” section of Cucinelli’s annual report cites “climatic conditions in the regions (mainly Mongolia) where the raw cashmere comes from.”

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To ensure the ability to monitor quality, the company is becoming more vertically integrated. Last year, Cucinelli and Chanel together bought 49 per cent of Cariaggi Lanificio, an Italian supplier of cashmere yarn.Fabrizio Troccoli/The Globe and Mail

It currently takes four of the Mongolian goats to produce enough fine wool for one cashmere sweater. If temperatures keep rising, more goats might be required, raising the expense and potentially threatening the supply of the best wool. Mr. Cucinelli is so concerned about secure deliveries that he makes regular trips to Mongolia; he has been visiting the country for four decades. “He’s treated like a celebrity when he goes there,” says Carolina, his daughter.

Mr. Cucinelli looks like a proper dandy when he meets The Globe and Mail in his vast, bright office next to the factory. He wears a cheery, light-blue, half-breasted linen suit, white shirt – no tie – and white sneakers. A corner of his office is stuffed with dozens of soccer balls, artfully displayed next to steamer-ship trunks. He is a fan of the Juventus and the Inter Milan teams, plays tennis and swims every day in the pool in his garden in Solomeo. He limits his work day to six-and-a-half hours and disapproves of teachers who pile homework onto young kids. “Our children today no longer have time to look up at the heavens and the stars,” he says.

At his age, he is still enthusiastic about his job, the “gentle luxury” fashion style that he was instrumental in creating – Cucinelli is the opposite of the fast, cheap fashion championed by Zara or Gap – and a “humanistic capitalism” business model. To him, luxury is not just high-quality, beautifully designed products; the term must also apply to the method in which they are made. “The products have to be made in a fair way,” he says. “You have to make them made in a way that respects everyone and everything around you.”

An amateur historian and philosopher, his conversation is sprinkled with quotes from Dante, Aristotle, Pythagoras, St. Francis, Einstein and Marcus Aurelius, the Stoic philosopher and Roman emperor during the height of the empire. “Marcus Aurelius was a great teacher for me,” Mr. Cucinelli says, repeating one teaching he follows in particular: “Live every day like it was your last day on Earth, but plan as if you are to stay here forever.”

He was born the son of a poor farmer not far from Solomeo. Umberto traded agriculture for what would be the misery of factory life in Perugia, the Umbrian capital. The Second World War veteran found the work humiliating, repetitive and undignified. Lesson learned for his son. The young Brunello decided that, were he to start a company, he would aim for a balance between profit and giving back to employees and to society.

Mr. Cucinelli dropped out of engineering school at age 24 and buried himself in philosophy books. His mother taught him to sew and he became captivated by the idea of high-end, Italian-crafted garments. In 1977, he bought a cashmere sweater from England, loved its texture, and decided to make his own. They would be made with Italian flair in azure, orange, yellow and other bright colours, not bulky, designed to be worn under a fitted jacket. But neutral palettes would be available for wealthy, older men who wanted to blend into the scenery.

At age 25, he was in business, a one-man show, with production farmed out to local women in the Umbrian countryside. He insisted on top quality and was able to sell his garments for high prices, especially in Germany, where the Deutschmark proved a perfect hedge against the ever-sinking Italian lira. His first garments found buyers even though they sold for a hefty US$600 ($816) at today’s prices.

As sales grew and the “Cucinelli” brand became better known, Mr. Cucinelli avoided the traditional corporate expansion route. Instead of building sweatshop-style factories stuffed with machinery in inexpensive countries, most of the production would be done in local homes and all of it would be done in Italy to capitalize on the “Made in Italy” brand and make quality checks easier.

“It was the forerunner of smart-working,” he says, referring to the relatively new employers’ approach that allows workers to work from anywhere.

Today, about 400 small producers – 80 per cent of them in Umbria – supply the vast majority of Cucinelli’s clothing. Half of them work exclusively for Cucincelli; the others may work for several clients, including LVMH’s Loro Piana, which has an extensive cashmere line.

Mr. Cucinelli is obsessed with quality. To justify the eye-watering prices, he has to be. To ensure the ability to monitor quality, the company is becoming more vertically integrated. Last year, Cucinelli and Chanel together bought 49 per cent of Cariaggi Lanificio, an Italian supplier of cashmere yarn. Cucinelli is also bucking the industrial automation trend by using less machinery, not more. Today, 60 per cent of the garments are made by hand, up from slightly more than half five years ago. Growth is also restrained, with relatively few store openings a year (there are 125 shops in total, 18 of them in China).

Still, how long can he avoid boosting profits to give investors greater returns? In 2023, operating income as a per cent of revenues was a fairly modest 16.4 per cent. Mr. Cucinelli insists he can resist forever, since crunching costs would inevitably sacrifice quality, damaging the brand. “When we went public in 2012, I said all I wanted to do was generate a fair profit,” he says. “If you are looking for the highest profit, stay away from us. No one wants ‘Made in Italy’ cheap.”

The market performance says the strategy is working. Shares in the initial public offering landed at €7.75 ($11.46). Today’s price, €95 ($140), represents almost a 1,200-per-cent return in a dozen years. “My investors tell me not to change anything,” Mr. Cucinelli says. “And I won’t.”

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