Brunello Cucinelli Confirms Growth Targets Amid Controversy
By Bloomberg
Published: October 1, 2025
In a recent announcement, Brunello Cucinelli SpA reaffirmed its commitment to achieving a 10% revenue growth for the year, buoyed by an impressive 11% sales increase in the first nine months. This surge is largely attributed to the sustained demand for the company’s luxury cashmere products, a hallmark of its brand identity.
Resilience in Luxury Fashion
The Italian fashion house, renowned for its high-quality cashmere offerings, has faced scrutiny following allegations from Morpheus Research, a short-selling firm. The firm, which includes former members of Hindenburg Research, conducted a three-month investigation that claimed Cucinelli misled investors regarding its operations in Russia and its discounting practices. This report led to a significant drop in the company’s stock, marking the steepest decline in its history.
Despite these challenges, Cucinelli’s management has expressed confidence in the brand’s trajectory. In a statement released on Wednesday, the company emphasized that it remains on track to meet its growth targets, dismissing the allegations as unfounded.
Allegations of Misconduct
Morpheus Research’s report alleged that Brunello Cucinelli continues to operate stores in Russia, despite the company’s claims of closure following the European Union’s sanctions imposed after Russia’s invasion of Ukraine in 2022. The sanctions have severely impacted the luxury goods market in Russia, and the report suggested that Cucinelli’s practices of heavy discounting were an attempt to clear excess inventory.
In response, Cucinelli firmly rejected these claims, asserting that its Russian subsidiary is fully compliant with all applicable regulations. The company has indicated that it may pursue legal action to safeguard its reputation. “The three direct high-street stores, large flagships that represent the brand’s image in the country, have always remained closed after sanctions were introduced,” the statement clarified.
Financial Impact and Market Recovery
Following the initial fallout from the Morpheus report, Cucinelli’s shares experienced a sharp decline of 19%. However, the stock has since shown signs of recovery, reflecting investor confidence in the brand’s long-term viability. The company reported that revenues from its Russian operations, which accounted for 9.3% of total revenues in 2021, have significantly decreased since the onset of the conflict, settling at approximately €30.6 million ($35.9 million) in 2024, or about 2.4% of total revenues.
A Legacy of Innovation
Brunello Cucinelli, the founder of the eponymous label, established the brand in 1978 in Umbria, Italy. Known for his innovative approach to cashmere, Cucinelli has positioned himself as a proponent of a more “humanistic” form of capitalism, emphasizing ethical practices and quality craftsmanship. His vision has not only shaped the brand but has also influenced the broader luxury fashion industry.
Cucinelli’s commitment to quality and ethical production has garnered a loyal customer base, which may help the brand weather the current controversies. The company’s focus on sustainability and responsible business practices resonates with a growing segment of consumers who prioritize ethical considerations in their purchasing decisions.
The Broader Context of Luxury Goods
The luxury goods market has faced numerous challenges in recent years, from geopolitical tensions to shifting consumer preferences. The impact of the COVID-19 pandemic, coupled with the ongoing conflict in Ukraine, has forced many luxury brands to reevaluate their strategies in key markets. As sanctions continue to affect sales in Russia, companies like Cucinelli must navigate a complex landscape while maintaining their brand integrity.
Conclusion
Brunello Cucinelli SpA’s recent reaffirmation of its growth targets amidst allegations from a short seller highlights the resilience of the luxury fashion brand. While the company faces scrutiny regarding its operations in Russia, its commitment to quality and ethical practices may serve as a buffer against the challenges ahead. As the luxury market continues to evolve, Cucinelli’s ability to adapt and maintain its core values will be crucial in sustaining its legacy and growth in the years to come.
