Jane Birkin, the British-born actress and singer, and the inspiration behind the iconic Hermès handbag that bears her name, died on Sunday (July 16) at age 76.
While she undoubtedly played a significant role in fueling Hermès’ success and shaping its brand image, her influence extended far beyond a single luxury fashion house. Birkin’s distinctive taste and preference for quiet luxury helped pave the way for a larger trend in the industry, ultimately propelling brands like Brunello Cucinelli and Loro Piana.
In the late 1960s, Birkin became synonymous with the Hermès Birkin bag, an accessory that would go on to become one of the most coveted and recognized handbags in the world. The Birkin bag’s success, driven in part by Birkin’s influence and endorsement, catapulted Hermès to new heights of popularity and cemented its status as a symbol of luxury. However, Birkin’s impact extended beyond Hermès alone. Her preference for understated elegance and impeccable craftsmanship resonated with a growing number of discerning consumers seeking quality and timelessness over ostentatious displays of wealth.
This shift in consumer preferences paved the way for brands like Brunello Cucinelli and Loro Piana to emerge as influential players. In line with this, Brunello Cucinelli is once more experiencing the allure of the “quiet luxury” movement. As a result, the brand has chosen to revise its projected sales growth for 2023.
Quiet Luxury’s Staying Power
Prevailing economic conditions have contributed to the popularity of quiet luxury. Many consumers find themselves facing financial uncertainties, prompting them to reevaluate their spending habits. There is a desire to make wiser investments by opting for high-quality pieces that provide long-term value.
Brunello Cucinelli, executive chairman and creative director of the fashion house, announced on Thursday (July 13) that the company anticipates a revenue increase to range from 17% to 19% for the year, surpassing the earlier forecast of 15% and marks a significant increase from their initial projection of 12% sales growth for 2023, declared in December of last year.
“The first half of this year ended with more than excellent results. We like to think that we are reaping what the brand stands for in its style and in the way of conceiving the balance between work and the relationship with creation,” Cucinelli said during an earnings call. “Thanks to the strong demand for handcrafted and exclusive products, we continue to have a very positive outlook on the absolute luxury world market.”
Given the “excellent” sell-out performance of the spring 2023 collections and the order intake for the men’s spring 2024 collection thus far, Cucinelli is confident that the company will achieve a 10% revenue growth in 2024.
For the year 2023, it is projected that the operating profit will account for about 15% to 16% of the sales, while the net profit is estimated to be around 10%.
Cucinelli stated that with anticipated sales reaching about €1.1 billion in 2023, which doubles sales within a span of three years and aligns with his strategy of gradual growth, characterized by consistent openings of two to three stores per year and three to four expansions annually.
The retail network comprises 124 direct shops, with the sole new addition being the flagship store in the Mall of Emirates in Dubai, which opened during the second quarter.
Construction began on July 10 for a new plant in Penne, Italy, which was mentioned during the brands previous earnings call in March. The 48,600-square-foot facility is expected to commence operations in the first quarter of 2025 and will employ 300 skilled tailors crafting men’s suits.
Read also: Luxury Brand Brunello Cucinelli Grows Sales Despite Inflation
Quiet Luxury Trends Across the Globe
During the first half of the year, sales in Italy grew 23.7%, reaching €60.8 million, accounting for 11.2% of sales.
In Europe, revenues were €202.7 million, a 22.9% increase compared to the first half of the year. Europe represented 37.3% of the sales and got a boost from high-end tourism, especially from North America.
Sales in the Americas rose 23.9%, reaching €189 million, 34.7% of the revenues.
Asian revenues grew 55.6% to €152.2 million, 28% of sales, primarily driven by the performance in China.
Luca Lisandroni, co-chief executive officer, said the mobility of Chinese customers outside the country remained restricted. However, on a regional level, Hong Kong and Singapore were performing better than in 2019.
With luxury items like trousers priced at $2,295 and vests at $3,782, labels like Brunello Cucinelli cater to a more exclusive market. However, the availability of buy now, pay later (BNPL) options is making these luxury purchases more accessible.
According to PYMNTS’ February 2022 “Buy Now, Pay Later Tracker,” the adoption of BNPL has been primarily driven by millennials and Generation Z. The report said 44% of Gen Z consumers are expected to use BNPL at least once by the end of 2022, surpassing the 7% among millennial shoppers.
Product Expansion
Cucinelli highlighted the eyewear collections developed in collaboration with EssilorLuxottica, as well as the introduction of two initial fragrances through a licensing agreement with EuroItalia. Although the agreement between the two entities was signed in 2020, the details were kept confidential until this spring.
The fragrances can be found at the brand’s exclusive boutiques across Europe. Additionally, they are being made available in 90 independent Italian perfumeries that cater to a selective clientele.
From the second half of July onwards, the advertising campaign will kick off, primarily focusing on the domestic market. As summer progresses, the distribution of the fragrances will expand to include the multibrand channel across various European regions. Cucinelli expressed that the brand’s plans is to enter the North American and Middle Eastern markets in the autumn, with the Asian markets following suit in early 2024.
Looking Ahead
Cucinelli anticipated a “normalization” of growth in the second half of the year, considering the strong comparative base set last year.
“Another element that we believe should be taken into account is the currencies dynamics, which had a slightly positive effect in the first six months of the year, while we expect a negative impact in the second half of the year,” Cucinelli said.
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