Brunello Cucinelli Addresses and Rejects Short Seller’s Russia Allegations

Core Viewpoint - Brunello Cucinelli's company reported strong growth in revenues exceeding 1 billion euros for the first nine months of the year, but faced scrutiny regarding its operations in Russia following allegations from a short seller [1][2]. Financial Performance - Revenues for the nine months ended September 30 rose by 10.8% to 1.02 billion euros, compared to 920.2 million euros in the same period last year [11]. - Retail revenues increased by 11.4% to 644.8 million euros, accounting for 63.2% of total revenues [13]. - Wholesale revenues rose by 9.7% to 374.8 million euros, representing 36.8% of total revenues [13]. - Revenue growth expectations for 2026 are around 10% based on spring orders and winter season sell-out [11]. Market Operations in Russia - The company has closed three newly renovated stores in Russia since March 2022, while maintaining operations in multibrand structures [5][6]. - Retail and wholesale sales in Russia amounted to 14.8 million euros, which is 1.4% of total revenues [6]. - Exports to the Russian subsidiary decreased from 16.8 million euros as of December 31, 2021, to 5.9 million euros as of December 31, 2024 [5]. Inventory Management - The company maintains an inventory-to-sales ratio of around 28 to 29%, which is considered healthy given the broad structure of its collections [9]. - The net inventory level has remained stable, at 28.7% in 2012 and 28.9% in 2024, despite increased retail sales [10]. Regional Performance - Revenues in Europe rose by 8.9% to 370.6 million euros, representing 36.4% of total revenues [11]. - In Italy, revenues totaled 120.9 million euros, up 9.7% [12]. - Sales in the Americas amounted to 365.6 million euros, a 9.2% gain compared to the previous year [12]. - Asia saw revenues increase by 15.6% to 283.4 million euros, representing 27.8% of total revenues, with China achieving double-digit growth [12]. Multibrand Channel - The multibrand channel is viewed as fundamental to the company's value, with about 400 prestigious partners worldwide [7]. - The company emphasizes the importance of maintaining brand integrity and exclusivity in its multibrand relationships [8].