^{Photo: Lili Henry}

While much of the global luxury industry struggles with slowing sales, weaker consumer confidence, and growing backlash over aggressive price hikes, Italian fashion house Brunello Cucinelli is moving in the opposite direction.

The company, often referred to as the “King of Cashmere,” reported a strong 14% increase in revenue during the first quarter of the year, sharply outperforming many of the world’s biggest luxury brands. At a time when several industry giants are reporting flat or minimal growth, Brunello Cucinelli’s steady expansion is drawing attention across the fashion and investment worlds.

Executives at the company say the strategy behind that success is surprisingly simple: avoid greed, protect craftsmanship, and focus on long-term trust instead of short-term profits.

Speaking at the Global Fashion Summit in Copenhagen, Co-CEO Riccardo Stefanelli said the company has deliberately chosen a slower and more sustainable growth model, even if it means operating with lower profit margins than many competitors.

“You don’t have to be greedy,” Stefanelli said. “If you become too focused on extracting profit, eventually someone in the supply chain pays the price.”

That philosophy has become central to Brunello Cucinelli’s identity. Since going public in 2012, the company has repeatedly emphasized ethical production, worker dignity, and long-term business stability over aggressive expansion targets. On the day of its IPO, the company even warned investors not to buy the stock if they expected profits to come at the expense of people or the environment.

More than a decade later, that approach appears to be paying off.

Luxury Industry Faces a Major Reset

The broader luxury market has entered one of its most difficult periods in years. After the massive spending boom during and immediately after the pandemic, demand for high-end fashion has slowed significantly across Europe, China, and North America.

Major brands including Gucci and Louis Vuitton have struggled to maintain momentum as consumers pull back on discretionary spending and become more selective about luxury purchases.

Industry analysts say one of the biggest mistakes luxury brands made during the post-pandemic surge was aggressively increasing prices without delivering enough improvement in quality or exclusivity.

Some luxury labels raised prices by 20% to 40% over a relatively short period, relying heavily on aspirational shoppers willing to spend more during the global luxury boom. However, as inflation, higher interest rates, and economic uncertainty began pressuring consumers, many buyers started questioning whether the products still justified the cost.

Even Kering’s incoming CEO Luca de Meo recently admitted that price increases across the luxury sector “went too far.”

Brunello Cucinelli took a different approach.

The company maintained a relatively disciplined pricing structure, keeping retail prices roughly seven to eight times higher than industrial production costs. Stefanelli said preserving a reasonable balance between actual product value and retail pricing has been critical in maintaining customer trust.

“We still want customers to feel there is a connection between the value of the product and the price they are paying,” he explained.

That strategy has helped the brand avoid some of the “luxury fatigue” now affecting parts of the industry.

A Smaller Brand With Bigger Control

Unlike global luxury conglomerates that operate dozens of brands and pursue rapid international expansion, Brunello Cucinelli has remained intentionally focused and relatively small.

The company generated approximately 1.4 billion euros in revenue in 2025 and currently holds a market value of around 6 billion euros. By comparison, luxury giants like LVMH generate tens of billions annually across multiple fashion houses, jewelry brands, and cosmetics businesses.

Stefanelli believes Brunello Cucinelli’s smaller scale gives the company an important advantage: control.

The founding Cucinelli family still owns 51% of the business, allowing leadership to prioritize long-term planning instead of responding to short-term pressure from financial markets.

“We have to think about where the company will be in 50 years, not just the next quarter,” Stefanelli said.

That long-term mindset shapes everything from pricing and hiring to manufacturing and expansion plans. Rather than chasing explosive growth, the company targets annual sales increases of around 10% to 12%, carefully controlling production volumes to preserve exclusivity.

Why Wealthy Luxury Buyers Are Still Spending

One major reason Brunello Cucinelli continues to outperform is its customer base.

Luxury analysts say the market has become increasingly polarized. Brands that rely heavily on middle-class aspirational consumers are seeing demand weaken, while ultra-premium labels catering to wealthy clients remain relatively resilient.

Jefferies analysts recently noted that Brunello Cucinelli’s latest earnings reinforced the “staying power” of high-net-worth luxury shoppers.

The company focuses almost entirely on what it describes as “absolute luxury,” offering ultra-premium cashmere products, tailored garments, and handcrafted apparel that can cost thousands of dollars per piece. Some items include rare fabrics, hand-finishing techniques, and jewelry-level detailing.

Instead of broadening its appeal to mass luxury consumers, the brand has doubled down on exclusivity and craftsmanship.

Stefanelli said many luxury competitors expanded too aggressively during the boom years, chasing larger customer bases at the expense of brand prestige.

“When you move too far away from exclusivity, it becomes very difficult to climb back to the top of the luxury pyramid,” he said.

Protecting Italian Craftsmanship

The company’s philosophy also extends deeply into manufacturing and labor practices.

Italian luxury fashion has faced mounting scrutiny in recent years following investigations into poor working conditions, underpaid labor, and factory exploitation tied to parts of the “Made in Italy” supply chain.

Brunello Cucinelli has tried to position itself differently by emphasizing higher wages, artisan training, and local craftsmanship preservation.

Stefanelli argued that luxury companies must pay workers fairly if they want younger generations to continue entering skilled trades such as tailoring, knitting, weaving, and textile production.

Without proper compensation, he warned, fewer young people will choose careers in craftsmanship, creating serious labor shortages across the luxury industry over the next decade.

“It’s more expensive, of course,” he said. “But if you want the company to still exist and thrive decades from now, it becomes a necessary investment.”

Challenges Still Remain

Despite its strong performance, Brunello Cucinelli has not escaped market turbulence entirely.

Last year, short-seller Morpheus Research accused the company of misleading investors regarding operations connected to Russia and alleged violations tied to international sanctions. The claims caused the stock to plunge more than 17% in a single day, marking the largest drop in the company’s history.

Brunello Cucinelli denied the allegations, but the stock has yet to fully recover from the selloff.

Still, analysts say the company’s broader strategy continues to stand out in a luxury market increasingly struggling with identity, pricing pressure, and slowing consumer demand.

At a time when many fashion houses are prioritizing scale and short-term shareholder returns, Brunello Cucinelli is betting that restraint, craftsmanship, and patience will ultimately prove more valuable than rapid expansion.