Brunello Cucinelli, philosopher and cashmere capitalist
“Why can’t capitalism be contemporary too?” asks Brunello Cucinelli, founder of the cashmere fashion brand which bears his name, as he sits in Solomeo, the Italian hilltop village where his factory is located.
It is not an empty question: Mr Cucinelli, 62, grew up watching his father work in a factory, abandoning the family farm to earn a better wage. “I have seen my father humiliated, offended, and with little money,” he says. He now tries to restore to the workers in his factory the dignity stripped from his family.
Mr Cucinelli runs his company, which is worth €1.2bn and whose jumpers can sell for upwards of €1,000, according to his philosophy of “humane capitalism”, and it has borne results. Founded in 1978, its shares rose 124 per cent to a peak after listing on Milan’s stock exchange five years ago; they are now up 50 per cent. It trades at multiples similar to those of Hermès, the €34bn French luxury leather goods house founded in 1837.
Mr Cucinelli, in blue blazer and white shirt, seated in his sleek white offices, applies his principle beyond his donations for the restoration of ancient buildings in Solomeo. “For me, it is not sustainable to give €5m to a charity and have your products made by children.”
His workers certainly benefit from this outlook. They come in at 8am and leave by 5.30pm. He does not allow emails to be sent outside those hours.
There is a 90-minute break at 1pm and in a subsidised canteen, workers pay €3 for their lunch. On this Tuesday, that is abundant helpings of rice salad from white porcelain bowls set out on wooden tables, followed by peppers stuffed with meat and courgettes. Apple cake and fruit are available for those who want dessert. Wine accompanies the meals, with coffee to finish.
On the light-filled factory floor, where workers dress in neutral colours straight out of a Cucinelli lookbook, every room has large windows looking out across the Umbrian hills.
Mr Cucinelli’s vision has translated into profit — but not everyone is a true believer. He is an outlier in the luxury industry for rejecting the pursuit of growth at all costs, insisting that the firm intends to achieve only “elegant growth”, which equals around 10 per cent a year.
Analysts are more sceptical. The share price reached its height in January 2014 and Mr Cucinelli admits consultants have urged him to ramp up production — perhaps shifting some outside of Italy — to drive up the company’s profit margins. He is adamant he will not do it.
“I would like a situation where all the people who work with me, the investors, the banks, the suppliers, all earn a just amount. Otherwise the annual report comes out and when people read it, they say: ‘You are thieves.’”
He rejects the idea he should pursue an aggressive policy of opening stores, the number of which now stands at 120: “You eat the earth,” he says flatly of this style of expansion. “Very shortly you find there is nowhere else to go.”
Mr Cucinelli and his family own 60 per cent of his company’s shares. Fidelity, the global fund manager, is the second-largest investor with 6 per cent, followed by the Zegna family, who are behind luxury menswear group Ermenegildo Zegna, with 3 per cent. Analysts think ultimately he may sell a significant stake to LVMH, although Mr Cucinelli says he intends to keep the company in family hands.
As with Armani, where the founder remains in command in his 80s, investors pose questions about governance at Cucinelli. Recently he appointed co-chief executives, who are in their 40s.
For his success, Mr Cucinelli has become an admired figure in Italy, a new entrepreneur in a country keen for success stories as it returns to economic growth after a decade of stagnation.
On the day of our interview, Technogym, which was founded within five years of Cucinelli and makes fitness equipment, launched on Milan’s stock exchange; its shares rose 11 per cent.
For Mr Cucinelli, such “manufacturing start-ups” are Italy’s future. “I am super-positive on Italy. There is a rebirth. The country is different from two years ago. There is new air.”