Luxury tries to raise its head again, eyes on Brunello Cucinelli

(Il Sole 24 Ore Radiocor) - Luxury stocks are trying to climb back up after the weakness of the last period, with investors questioning the business trend, especially in China, after recent signs of a clear slowdown. Up in Paris are Lvmh and Hermes. It is still beating the Kering, with observers harbouring doubts about Gucci's recovery, even after the entry of creative director, Sabato De Sarno. In Milan, on the day of the 90th birthday of King Giorgio (Giorgio Armani, ed.), Moncler is advancing, as Brunello Cucinelli is up 0.85%. Outside the main basket it moved up nicely Aeffe. However, it continues to suffer Salvatore Ferragamo.

In the meantime, anticipation is rising for the numbers that Cucinelli will announce at the close of the stock market, relating to second-quarter sales. The Umbrian fashion house, however, is not considered indicative for the entire sector, as it is present in a niche and luxury sector in which it has almost no competitors. It has in fact always managed to grow in recent quarters, despite the less favourable context for the sector. What is more, as reported to Radiocor, it recorded positive returns last June and Florence (for Pitti Immagine) and Milan, on the days of the presentation of the men's collections for next spring-summer 2025.

Intermonte's analysts expect retail channel revenues in Q2 2024 to be up 14.6% year-on-year to EUR 206.9 million, wholesale revenues are seen up 6% to EUR 103.9 million. "Geographically, we expect a good performance in Italy and Europe (+4%) and a very good performance in North America and Asia (+18%/+14%), in continuity with what we saw in Q1 2024," the sim's experts commented, pointing out that the Umbrian fashion house should "maintain a strong revenue growth also in Q2 2024 (+11.6% to 310.8 million), confirming a performance that is definitely superior to the sector, with no signs of slowdown in the proprietary shop channel." For the complete half-yearly report it will be necessary to wait until the end of August.

On the Italian luxury goods front, Salvatore Ferragamo remains under the microscope, which for now is struggling to show signs of a revival. Even for days now (since 26 June to be exact), the shares have been hovering below the value of the IPO, which took place in June 2011 at EUR 9. In financial circles there are rumours of a backward step by the family, but in the last few days, the chairman, Leonardo Ferragamo, has excluded the sale of the company and has also declared that even delisting is not being considered, considering the stock exchange a positive instrument. In short, Ferragamo will not follow the path of Tod's, which said goodbye to Piazza Affari last June after a 24-year stay.

The president of the Florentine maison recalled that investments of 400 million over five years are on the launch pad to support the brand image, which in the meantime, according to the entrepreneur, is registering positive signs with the Maximilian Davis collections. In detail, the group expects a recovery of revenues in the second half of 2024, followed by an acceleration in 2025. In the past months, however, Ferragamo has paid the price for its strong exposure in Asia, where a slowdown in demand for luxury goods is under way, which for Leonardo Ferragamo is only "contingent". Sales fell to €227 million in the first quarter, down 18.3% at current exchange rates and 16.6% at constant exchange rates compared to the first quarter of 2023. The second-half numbers will be revealed on 1 August.