Brunello Cucinelli Spa

the conference, Nine Months of Revenues of Cassidy Mulder Brunello Cucinelli. You'll have an opportunity to ask your questions at the end of the presentation by pressing star 1 on the keyboard of your phone. If you need assistance during your call, please press star 0 on your phone keyboard and you will be contacted by an operator. The participants to this conference call will be Mr. Brunello Cucinelli, Executive Chairman and Creative Director, Luca Lissandroni, CEO, Dario Pipitrone, CFO, Moreno Gianepico, Co-CFO Senior, Pietro Arnabaldi, Investor Relations and Corporate Planning Director. Let me now yield the floor to Mr. Brunello Cucinelli, who will begin today's conference. Thank you. Thank you all very much. Good evening. We now have a different company, which is actually organizing this conference called Borsa Italiana. So it would be their fault if something goes wrong. So welcome, as usual, dear analysts, investors and reporters. I always say so. You know, I love this conference calls. Everybody's here. with the exception of Riccardo, who just went to San Francisco and Silicon Valley three days ago to discuss our website, our new Calimacus. I will report about that too. But we're really, really happy for this new website. Luca is here with me. He just came back from Japan and Korea a couple of days ago, so he'll report on that. As to myself, I will leave on Sunday and spend four days in China, then I'll stay two days at home and then four days in New York City. where we'll receive an important award. And I'll be back for two more days and then spend three days in the Middle East. And then in early December, we'll meet again in the US. I'm laughing because I'm thinking of managing jet lag. But actually, as I always tell you and my people and everybody, When you travel, be open, be open to innovation, change and get exchanges. And when you realize you don't want to travel anymore, just leave this business because I think that would be the time to change. So I would like to arrange the call as follows. I will read the data of the first nine months. Then we'll see how we imagine the year as we close it. We're still going a couple of months. And Luca will give you a good outlook on the markets. And then we will tell you about a big analysis that we have prepared on the current moment. And since 2020, As we do, like we do every year, tomorrow we're going to meet at the theater for the so-called Concilio dei Cento, which is not 100, but 120 now. So we'll gather to take stock of the situation. So we did prepare a beautiful analysis. And so very briefly, I will report to you about it. I think it's really interesting. And then we will discuss. present the plan for 2025, 26, 27. And we'll explain that at the shareholder meetings or general meeting. Actually, we have in December with our employees every three months. As you may know, we organize a general meeting. Actually, it's just me talking, but we still call it a general meeting. So let me read the slides. data to you. Unfortunately, it's printed in very small type font. I hope I can read it perfectly. So revenue standard 922.2 million with a beautiful growth, 12.4% current exchange rates and 12.7% constant exchange rates. We see these results as excellent and well-balanced in the Western markets, where America is up 17.6%, Europe is up 8%, but we're performing well in the Eastern markets too, with Asia, which is up 12.2%. The increase of revenues in both sales channels with a growth of 13.3% in retail and 11% in wholesale. And actually, we start calling it multi-brand. We prefer this definition rather than wholesale. The quality of the results we have achieved in the first nine months of the year, and this is important, the really good performance of sales in the men and women collection for fall-winter 2024, All allow us to fully confirm our project to grow revenues by about 10% with a healthy and well-balanced profit for the whole of 2024. Just a side note here, we are under the impression that our brand is going through a beautiful time in terms of its style, exclusivity and arts and skills. And in particular, we are very happy about the way we care for our much beloved clients and we try to transfer to them our idea of a way of working according to measure in full respect of human beings. So we'll discuss this later too. We do see great opportunities for the time ahead. All of this allows us to look ahead at the future with a lot of trust for the plan period of 2024, 5 and 6, where we imagine we can grow our revenues by about 10%. So we'll get back to this. On September 30, we held at the Borsa di Milano what we call the Cena della Gratitudine, the Dinner of Gratitude. A dinner which was dedicated to all of those who have trusted us and accompanied us ever since we went public in 2012. Analysts, investors, bankers, journalists, industrialists, be them listed or not. to convey to them our idea of how important it is for us to be listed. You know, we are very, very happy we've gone public, and we want to transfer this idea to the other entrepreneurs, beautiful contemporary enterprises. There were at least 30 beautiful such companies. And actually, we have strengthened our belief with this well-known expression, which is please do go public, but please rely on a healthy and well-balanced growth project, both in terms of revenues and profits. So if you do this, you'll work in a better spirit. So this was my comment. We're particularly pleased with the highly positive momentum our brand is currently enjoying. From all perspectives, we've always sought to build an authentic relationship with our esteemed clients, one that allows us to enhance and deepen the special connection that binds us, including through what we like to call artisan events, and we'll discuss them later. So we can clearly feel the genuine trust our clients place in our work. The outstanding results from the first nine months of the year, the excellent sales of the Paul Winter 2024 collections. And you know that this is just the beginning of these collections. We need to see whether people like them or not. And if people don't like them, there's not much we can do at this stage. But people are appreciating them a lot. So this and our ongoing commitment to garments of the highest craftsmanship allow us to confidently maintain our revenue growth forecast of approximately 10% for 2024. We see significant opportunities in the exclusive true luxury markets for our brand as well, driven by the appreciation for the style, exclusivity and craftsmanship embodied by our collections. With the substantial orders already placed for the Men's and Women's Spring-Summer 2025 sales campaign, as we told you already, we can reaffirm our plans for healthy, sustainable growth, projecting a revenue increase of around 10% for both 2025 and 2026. So this is our starting point, the idea of the end of 24. So we'll be very concise today. So we'll have time for a nice open chat. So the end of 2024, the last quarter was very, very good, just like the other nine months in the year, actually. Also in view of the big growth we experienced in 2023, because actually, In the last six months of last year, we had a 20% increase with an amount of new openings that are... pretty much normal, meaning three new stores opening every year and four or five extensions per year. Today, we have a bit more than two months till the end of the year, so we are very confident in the continuation of the trend in sales and we are confident we close the year with revenue increases of about 10% and EBIT margins are slightly improving versus last year. If it were true, which we certainly hope it will, this will be a great year. Now, in the next three minutes, we'll try to share with you some info about the survey, the study we did. We did it in-house, and we're going to discuss it with our people at the meeting tomorrow. But before we do it, I would like to give you a general comment about... Our observations on this time for luxury. I'd like to convey to you our basic idea on these beautiful companies in our world, in our industry. Now, in all frankness, sometimes I hear people say that luxury is in trouble and so on and so forth. There are such important companies with lovely brands. We were discussing this morning, too. So they are huge companies in terms of revenues, profit, assets and market cap. They have a world class image. They are undeniably robust and solid. So after a time, including pandemics from 2019 to 2023, virtually everybody has doubled their sales and market cap too. And the yearly profit is actually increasing by 30 to 40% in the last four years. So I don't really believe that. We can say these companies are in trouble just because for one year growth was virtually flat. I'll be very frank with you. As my other friends from the industrial organizations normally say, so what should the remaining 90% of companies do and say if this were being in trouble? So, of course, there will always be, there have always been actually in the four to five years I've been doing this business, there will always be companies that go through some rough patch. But this is the passing of things. And I've always seen it happening in my story. This is how it works. But basically, we have a lot of beautiful companies. So I'm sure you understand. We believe that these are very robust companies. They are charming companies. And the whole world is looking at them. So we can close by saying that we're going towards a time of very good rebalancing, wonderful rebalancing, what I would call tempus novum. So, you know, there's this beautiful Greek expression. We're going towards a time of balancing, which is beautiful and good and fully balanced. So, Luca, this is actually what we think of our lovely companies around the world today. This is what we think about our data for 2024. Now, Luca will give us a general overview. and then we will talk about this beautiful analysis, which is actually going to spur our discussions to it.

thank you and good evening everyone from my side too so in my contribution today first thing first i'd like to provide some brief numbers on the nine months results and what we expect for the end of the year and at the same time i'd like to share more quality oriented remarks on the market situation Borello says, please do not speed up because you are being translated. So the target, the aim is always the same. So first of all, we want to give you as much visibility as possible. Visibility in terms of our plans, our targets. And at the same time, we also want to share two or three arguments uh and that are really the reasons underlying our great trust and confidence so let's start from results so we can say that today we are precisely at the situation where we were wishing for we that we wish we would be in the past so in the first nine months so what do we see there and great growth in the company a serene we would like to call it a nearly natural growth in the company definitely not stretched with the very same number of openings that have always featured in our retail growth. And it is a growth that is happening that is driven by gradually. And we are very happy with this gradual growth. So, so far, we have been able to really follow on the tracks that we set right at the beginning of the year, the end of the first quarter. So the idea was to have the first three quarters very similar to each other in absolute value. So and that actually happened. All quarters are around 300 million revenues. Well, perhaps slightly more in the last one, Brunello comments. and then this basically provided robustness to our final view of a 10% growth at the end of the year. Then if we take a look at the 12% to 0.4% growth in the sales at the end of September, this in absolute values means 100 million revenues. So we are particularly pleased with this because first of all, this drives us closer to our target for the full year. But we are very pleased also with the way this growth happened, because if we break it down by geography, you will see that 50 million came from North America and the remaining 50 were broken down between Asia and Europe, 25 and 25. So two things here. The first thing first, we really like that we are enjoying a well distributed and healthy growth. And then there is also we are We believe that no geography in the world is mature, and this is our conviction. In the third quarter, growth was 9.2%. Growth in retail was 10.5%. And across all regions, China contributed very positive results. And in our third quarter, 2023, we grew by nearly 22%, so last year. So the last comment on the first nine months' results concerns the synergy between retail and wholesale. We are fully convinced that... It is very important to be close to our customers and because these customers, they have a great relationship with the people, staff in their stores. And we consider this to be extremely important nowadays. Fourth quarter and end of the year, we expect a fourth quarter still underscoring growth in absolute values. slightly higher than the first three because this is our usual seasonality. Yeah, of course, because of Kashmir in winter, in the winter season. In percentage terms, we expect a slightly milder growth compared to the first three quarters but once again you should bear in mind that in the fourth quarter we grew by 16% with a retail that was particularly buoyant up 22% last year. Then in terms of geography and channel mix Well, retail is always great because you see the wholesale results are more half-year results. So in terms of geography, we believe that today's figure, 37% North America, 37% Europe, Asia 26%, This is very close to our expectations for the end of the year. Then in terms of channel, we expect for the full year, a result that is very similar to last year, that was 65% retail and 35% wholesale. And we really encourage you to read it as monobrand and multibrand, which is 55 and 45 respectively. So what's the outcome of all this? A very positive feeling, the fact that we are solidly present domestically across all markets, and also we enjoy a great relationship with all the multiple customers. thanks to the artisan events that we organized all over the world. Let's take a look at the scenario. There is one unquestionable fact. There is a decreased traffic in the large malls, especially in China. But the It is a contingent situation for us and we have two remarks concerning this. A few days ago, Pietro shared with the team a sector related research highlighting that if the growth of the industry is 100 between 2019 and 2023, and we're talking about years featuring buoyant growth, the contribution of the Chinese customer was only 10%. Over 50% of growth was contributed by American European customers. And and the 25% is Middle Eastern and South Korean. This is to say that we do not believe that the fortune of our industry does not depend on the speed at which China grows. Of course, this does not mean that we don't believe in China, which we believe in China very much. We are very much charmed by its culture and we are fully convinced that the growth in China is a huge opportunity, not just for us, but for for the whole of mankind. But if it is true that in the last period China grew slightly less than expected, it is also true that many other countries and I'm thinking of Thailand, Vietnam, Indonesia, Saudi Arabia, well, Mexico, they are accelerating, they are coming closer and closer to the luxury world at a much higher speed than what we expected. And we are fully convinced that these countries will provide millions of new customers to exclusive luxury. Second remark or jewelry. So this means that wealthy people are more willing to spend. On the one hand, there is a reduced shrinking footfall, but at the same time, there is a lot of disposable income. And the three keywords are trust, ability to engage, and authenticity. three watch words that have always driven our idea of entertaining a great relationship with our customers the mood inside our stores that's why we started building our casa cucinelli across the world and we believe that we were particularly rewarded by the trends in the market. So we keep looking ahead with confidence and we see great opportunities ahead for us and the exclusive luxury. Well done, Luca Brunello. Congratulations, Luca. So a couple of words on the major events. We organised one mid-September here in Solomeo where we invited 200 major multi-brands of perfumes and fragrances worldwide. We officially presented and showcased the second collection of our fragrances with excellent results and there we had a chance to realise the value of the multi-brands. Then it's really true a dialogue. We already told you about the dinner of gratitude September the 30th Particularly great many companies are there that could go public but together we need to be brave enough to Convey less fear you see we should not be frightened by going public then a couple of words on what Riccardo told me over the phone about Callimachus, our project and our website. So they met all the top management of the Silicon Valley, starting from Salesforce. And I have to say, we are very pleased with our business with them. And it seems that, you know, we have done something important. We have collected extremely positive feedback. And we had a confirmation that the ideas on which Calimicus rests, which the platform runs, which is building pageless websites going beyond the usual standards. look, looking, chasing the desire of users and designing what users see in real time is a true novelty. So our website, BrunelloCrescinelli.ai, thanks to these features, was considered pretty special by everybody, specifically for the way in which it presents content and guides and leads our users to the discovery of our philosophy. Well, everybody was agreed in saying that they never saw anything similar. So, you know, we deal in ready to wear mainly, but we understood really what kind of potential lies in this website. Visitors spend more time surfing and in a few months perhaps you can join us Online you have an important event ahead and you can ask for tips on what to wear for your major event. So now for five or six minutes I'd like to walk you through this great deep dive or research we carried out about fashion. What is luxury? In the Italian dictionary, luxury is a refined way of living. So it means craftsmanship, quality, exclusivity. And here I'd like to point out something important. Very often I do happen to read desirability. You see, to desire something does not mean that it is per se luxury. to its own rights. It is something that is not easy to find, that is not overly distributed, is not commoditized, and also you can't possibly buy a Cuccinelli suit for $7,000 and at the same time a bracelet for $100. They don't go together. We organized about 50 artisan events. I attended 20 of them. You see there's usually between 80 and 120 guests and you speak to everybody and usually it is well-off wealthy people. So you talk to each and every single one of them and we think that we do have the brand trust. You see I've always maintained since when I was very young that there is always a lot of trust in luxury because luxury means dream, it means exclusivity. Well, of course, this is life. Some brands are losing out in terms of customer trust, but this is the result of your corporate policies. you see a very important topic that I want to broach here is how customers are welcome in the stores you see I stepped into the Milan store so I think that the the lady there did not recognize me and she said what would you like and I said what would you want me to of course I want to buy something and he said and she said well you have to wait for 10 minutes and I said well but there's no one here Well, of course, this was another store by another brand and I was not treated well, and I will never go back to that kind of store. You see, our salespeople, they are not hustling our customers because 80% of their wages is fixed. It's not variable. So they are not driven to steal customers mutually. I have a very important Indian friend who was in the UK the other day and he sent me a text and he said, I'm enjoying a great macchiato coffee in your store. He did not mention anything about shopping or buying any suits. He just said that he was enjoying coffee. so i believe that we need to rediscover some kind of love because some customers have become disenchanted somehow and if you fall out of love with a brand you will stop shopping buying that brand because in that store where i was treated poorly i will never step into the store again because if i don't know if you agree with that but what you don't like others don't like either So, and this is something that also is part of our 10 golden rules for the company to survive to centuries. Greed, greed should never go appear in your company. If you have a greedy company, greedy business, you will not survive for long. So I talked about this. So what about product? We had a great meeting today on the collection. and you see the thing is generally speaking there are too many evergreen items and you know who on the other hand talks about products a lot multi-brand the multi-brand team they are always able to give you a feedback on your collection whether it's too basic whether it's too outdated in the last fashion week in milan which was uh charming because we were talking about this we had guests from all over the world american far east brazil it was truly successful. But you can see that everybody is in the lookout for novelty in terms of brands, in terms of taste. They're always seeking new things. And I very often repeat that marketing should never have a say in style because it could help, but it's also risky because it's very easy to always have an evergreen. As you know, we never have any evergreen items because a blazer can be 75 centimeters long one season and 76 the year after, and it's not an evergreen. Now, going back to the Treccani dictionary or encyclopedia, listen to what it wrote about fashion. So a fashion that has become trendy quickly, a fashion that will be out of fashion quickly, it is the fashion of the time, of the moment, these are already gone. So unless you are contemporary, if your brand is overexposed, that's the risk you run, that you just become a trend. So we can say that everything goes by and actually this happens to brands too. And then there is yet another important topic, prices. You see, we view it as the most important, most relevant one. And as you know, we have pretty high prices. What I say is that multi-brands are really good at analyzing prices. And this year, I would say that customers have started complaining about high prices, which means that there's a new awareness around. I said it last time I went to a restaurant and I was presented with a huge bill. you see the cigar that I smoke used to cost 30 and now it's 70 so today for the first time final end customers in our view they feel somehow conned cheated because you see they say they they do have this desire to wear special garments every day but They need to be treated accordingly. You see, we are talking about wealthy customers here. And I was saying to my daughter the other day, prices have skyrocketed. And next time, instead of staying at that hotel, I will sleep in my car because prices have really gone through the roof. So we really need to redress the balance. One last thing I want to say. In 2019, our friend Luis Ferla came to visit a former CEO of Ashron Constantin and currently Cartier. So he came here and Luca Riccardo We have always been fascinated by Vacheron Constantin because they will be celebrating 270 years of heritage with just a few units manufactured every year. And he said, we can't over raise prices because then you can't go backwards and the market can forget about you very quickly. So whereas we You see, for us, for this reason, pricing has always been a very important theme. And the way we treated prices really had a positive impact on how our business went. So to conclude, believe that there is still a lot of desire for luxury, for exclusivity. Even more so, we are always overexposed through the social media and everything. This, we will come out of this time with a new vision of True Lecture of how to believe and what to communicate. So everything that we have been telling you, so we want to confirm as to 2025 and 2026, well, you're already familiar with it. We envisage 10% growth in revenues and a healthy profit. As to the rest, you already know it, and we don't want to change anything. You know about investments, you know about openings, EBIT. This is our idea for the coming two years. So this is what we wanted to tell you. Of course, we need to be contemporary, cutting edge in terms of product, communication, way of working. And last thing investors did us. As it is custom, we will be holding a dinner with investors in Paris 26th of November, then London 28th of November, then early December New York and then Milan around December the 8th. and if you can if you have a chance do turn up at these investor dinners because we consider them extremely important so this marks the end of my presentation we have all the time available for you for your questions hopefully we did not offend anyone in our statements but You see, for us, we see it as a tempus novum for mankind. Thank you.

Thank you very much. We can open the Q&A session from the Italian line. Let me remind you that if you have questions, you can press star one on your keyboard. If you need assistance, please press star zero. Thank you. So the first question will be asked by Blavio Cereda of GAM. Good afternoon, Brunello. Good afternoon. Good afternoon. So you travel all the time. So I take advantage of this opportunity to ask you a question. Don't travel too much. And Mr. Cucinari is saying, well, I want to cry if I think of my travel implants. It's a bit too much, but actually it's a real pleasure to go all over the place. So please, Flava, go ahead. Now, I'd like to understand your opinion about this. Over the medium term, there are three options here. So either consumers are a bit tired of buying things and objects, especially in some countries, or consumers People are trying to buy what is real luxury considering prices, as you said. So in terms of products and services, which is different from the past, or maybe we go backwards and we go back to the starting point with consumers trust. So speaking of your consumers and speaking of what you see of the industry, where do we stand now? Now, the answer is we've been discussing this a lot, of course. And so we do not feel there's a lack of love towards luxury. Actually, if you don't behave well enough, I stop buying from you. So, Flavio, I'm not going to buy from that store in Milan where... People told me I have to wait for 10 minutes and no one was there. I'm not going to buy there. I'm not going to shop there. However, people love to wear beautiful things because they're connected, because they have a zillion events every single day. So I'm not concerned about high level luxury. But then if I'm well off, if I'm a wealthy person, so do you think it makes sense for the person sitting next to me at the bar to wear the same brand? I don't think it does. What do you think about this, Luca? Well, Lucas, as I agree with you completely, Brunello, I do believe that today top-notch clients are looking to buy products that do have authentic value, but also they want to be absolutely exclusive. They look for recognition. They look for being treated as gently and kindly as possible. So Mr. Cucinelli is saying, well, Flavio, when we publish our numbers, our financials, these people look at them. And if your profits are too high, well, you should know what they comment. I mean, our customers have their own companies many times, so they know how to read numbers. Between 19 and 23, our profits increased by 36 to 38%. So considering prices, we may actually say, We used to say in the past that we can increase prices as much as we want. People would buy and shop anywhere. But, you know, Flavio, I'm not that sure. But I see huge opportunities about that. So going back to the issue of prices, there's a price sensitivity even in the top range of the market. And, of course, this is even more important in the medium part of the market, so to speak, because some clients have really been expelled from the market. You know, the Czech editor-in-chief said, well, you know, something that cost 9,000 euros to me now costs 14,000 euros. And of course, for obvious reasons, I've lost the sum of my customers. I mean, there's no problem with the top, top end of the market, the upscale part of the market, but the mid-market is pretty much in trouble. And as far as exclusivity is concerned, Flavio, you know, There is a lot of stores. The network is full of advertising and everything. And also Brunello, we've seen this at the fragrances presentation. This is a very... topical issue for the whole industry. It is very topical indeed because, I mean, people say if the pregnancy cost $150 some weeks ago, why should it retail for $200 now? What for? So you see, Flavia, we do attach a lot of value to pricing and we do sell at pretty hefty prices, of course, we know. It's very clear. Thank you. So enjoy your traveling. Thank you. Thank you very much. Bye-bye, Luca. Bye, Flavia. Thank you. The next question will come from Andrea Nandone of Intermonte. Thank you. Good afternoon, everyone. Good afternoon, Brunello. I have three questions on distribution. First, it's very easy because... you said you're going to open a couple of stores in September, plus you're planning some other openings for 2025 at your, let's say, steady pace. But I'm curious, where are you opening new stores and what kind of thinking is behind choosing individual locations? Then my second and third questions are about multi-brands because this is a topic that has been widely discussed many times with you because you're doing something which is really different from what the rest of the industry seems to be doing now and especially so in this last quarter and this last year. So my question is, So the first question is about the state of health of your multi-brand clients. I know you care for the state of health of your manufacturers and their suitable compensation for future sustainability. But what about the multi-brand stores you work with? Of course, business with these good. We can see that from your financials. But what about the rest of the business? Can they actually manage a healthy business or do you think someone is a bit more fragile, so to speak? A third question on multi-brands again, just like for retail stores, what kind of initiatives are you planning for 2025? Are you opening in new regions or new contexts? Where are you planning to expand your customer base in the future through multi-brands? Thank you for your question, Andrea. I'll take it from the beginning. So the principles we adhere to is always the same. We want to keep exclusive positioning and we want to obtain growth through extremely selected openings, but still looking for balance. Balance by geography and balance between strengthening developed established markets and opening new markets. So looking at the current year, we have completed our activities. We have opened the Miami stores. We have opened in one at the SKP department store, which is beautiful. We opened in Toronto. We are going to open in Vail later in the year. So we have also prepared two extensions in Venice. And in the next two days, we're going to relocate our second store in London from Sloane Square to Luz Bloom Street next to the Millennium Hotel. As for 2025, we're going to open the new mall, which appears to be very promising in Vancouver, Canada. We're going to open at the Four Seasons in Macau, which is maybe the most important resort in the area. We're going to open in Abu Dhabi and we'll have two major extensions in Vienna and Geneva. Then maybe we'll discuss Geneva later because it's one of those examples of the major opportunities we're going to have in the future. So we were saying earlier, we're convinced, we're persuaded this time, these contacts can provide us with great opportunities and one has already become true. So you know that as far as Geneva is concerned, it's... there's just one luxury street actually so there's not much physical space available there so we've been looking for a bigger location for our store for years and we haven't found it yet so at the beginning of the year for the first time after 25 years a very beautiful store became available on the market we expressed our interest immediately and we only finalized the deal a few days ago Just because we exploited the hesitations of another brand that initially made an offer which was higher than ours, but actually the landlord called us and said, I'm tired of the ups and downs. So if you want, the store is yours. So we are sure we'll have similar opportunities again in the future because Pick a look at our brands because of our ready-to-wear positioning, accessories, lifestyle, and also for the way we behave and the relationships we can create. So for 2024, 2025, everything is planned. 2026 is virtually all completed too. We're going to open a little subsidiary in Mexico, a kind of sister company of the US subsidiary, because we see an opportunity there, as Brunello said. Right, so we'll start there. Never before have we seen so many Mexican and Indian tourists in Milan, and never before have we seen such a high value for multi-brands. They want to be creative. They want to do windows the way they like them. They have their own ideas. We don't necessarily agree all the time, but in the past, we were actually... used to imposing her choices on them. So we serve 400 lovely multi-brands globally and we see no problem at all so far. Actually, we think they're very good for us because it's the first time that many large brands are actually starting to accept different amounts of orders too. So it's the law of the economy. If I'm a customer and you impose your choices on me, then I can accept them till a certain time. And then when I'm sick and tired, I just walk out. And so this is something I've never liked before. So after pandemics... Some companies were not behaving so well with us, and so we didn't confirm them. It was as simple as that. So multi-brands are a guarantee. They're the real custodian of the taste of a brand. So if these people tell you the collection is old, you can rest assured it is old. Of course, journalists are very important too, but multi-brand customers do feel these things day in, day out. And as far as pricing is concerned, of course, they always complain. But never like this time, they told us that their customers complained about prices. You know that many multi-brands serve customers that I... particularly faithful. So if you go to a beautiful multi-brand store in Bari, they actually know why before they go to the stores because they're very faithful, loyal customers. So we do see a lot of opportunities there. And as far as the atmosphere in the stores are concerned, they are very, very beautiful. You know, they're good because they can mix things very well and they're very valuable for us. No one would ever tell you, you need to wait for 10 minutes if no one was there in a beautiful multi-brand store, a well-managed multi-brand store. In the last six or seven months, some things have piled up. People who do not have many possibilities may shop less, but the upscale customers are actually looking at prices too. And they actually look at prices on the major evergreen products. So for new garments, new products, they don't realize prices have increased. But on evergreens, yes. But we're confident. We're absolutely confident.

thank you to both for your answers thank you the next question comes from ari oriana cardani intesa san paolo yes thank you good evening brunello good evening everybody I actually have three questions. The first one has to do with the launch of the new fragrances that you presented in September. If you can give us a bit more colour on the channels where they will be showcased first and also the geographies, the success of the initiative, whether you feel that in a few years time you might also enter cosmetics and beauty, the beauty sector. The second question has to do with the online sales. So they were pretty buoyant in the third quarter. Also thanks to advertising and also the successful new website. So I was wondering what is the weight of direct online on total revenues in the nine months? And the third question is on the performance of the European geography in the third quarter where there have been any differences in the different countries where there was a balanced growth or maybe some countries is better than other. Luca, fragrances. So Oriana, six new fragrances presented. The family we called is Poetic Enchantments because inside each box there is a poem representing the inspiration that will be available starting from the second half of November in Europe and America and then Asia in the second, the start of the year. And I was just saying this morning, we think that especially to a very high quality, you know, usually you put together seven, eight fragrances a year. We decided to cut down a little bit, but we're very happy with all of them. They are distributed a very high level in about fifteen hundred boutiques worldwide. Then website our website. Online sales 6.57% a year. We're very happy with the new website because visitors tend to spend twice as much time on our website than in others, but they're also very important because now over 60% of them, they collect information online and then they go and shop in the physical store. So e-commerce is extremely important for showcasing the products and the company. And it amounts to six, seven percent. Then Europe. So it was slightly warmer at the end of August and September, but then a cold sets in and it's now 20 days that it's going particularly well. Well, a little difference between Italy and the rest of Europe. It's just to do with the wholesale shipments, because when we take a look at the retail figures, all markets share the same figures. I'd like to say it once again. You see, always take a look at the wholesale with a six month kind of view because this is more close to reality. Now it's been three years that a new balance has setting in the stores in terms of timing. In 2018, 2019, you see in June they were already selling the winter collection, whereas now more balance is actually to be seen. Then as to the cosmetics and beauty yes yes sorry i forgot about that so fragrances and eyewear are part of ready to wear somehow because you wear your glasses on your face the perfume uh exudes so to speak from your body where your clothes are and we will we'll see about beauty in about a decade or something when there's more revenues we will see but this is not a project for tomorrow Another important thing, 85% of our business is contributed to by apparel ready to wear. And this is the reason why in a month time I will be presented with a prize for taste and style. We were just told today that at the end of December, in December 2025, we will be awarded a very important prize in the UK for our style. And these awards, they do make the difference because they go to confirm the style. Thank you. Oh, you didn't even know about the prize, did you? Thank you. Thank you. Thank you very much. And now let's now move on to questions from the English conference.

We will take our first question from Daria Nazdilesheva, Bank of America. Your line is open. Please go ahead.

Good evening, Brunello. Hi, everyone. This is Daria from Bank of America. Thank you very much for taking my questions. I have two. So the first one, could you please comment on most recent trends that you have been seeing since the start of October? I'm conscious that very little time has passed, but any color would be much appreciated. And if you're seeing any change versus the third quarter. And my second question would be if you could please provide any color on demand by nationality within the quarter. So Chinese, European, American in comparison to the second quarter, both locally and offshore. Thank you very much.

So in October, sales were positive. The winter, very, very positive. So the winter garments are very much appreciated. So we were off to a good start. I hope you're not too bored, but we're waiting for the system to pass through the questions. Perhaps there's a hiccup.

Would you want me to repeat my second question?

We will go for our next question from Adrian Dwerger, Goldman Sachs. Your line is open. Please go ahead.

Hi, good evening, Bruno. Good evening, everyone. Thank you very much for taking my question. So the first one would be on the resilience from the higher spending cohort. Could you please comment a bit on this? Has there been an increase in the proportion this year versus last year? And if so, have you seen any difference between geographies, for example, in Europe, the United States, and China? And my second question would be on manufacturing investments. How are the new facilities under construction in Italy, so in Pene and Gubbio, progressing versus your expectations? And how do you expect the additional supply to evolve over the next three years? Thank you very much.

I don't know. So now we're here again. So you see, we have to start behaving properly towards our customers, towards our staff, analysts, investors. We have reached a point where we are no longer tolerant, you see. So that's why I am saying that we are moving towards a new time, a tempo novo, because we need to strike the balance again. And you can actually feel it inside of the company. You see, at this moment in time, we are working very peacefully on the fall winter collection 2025. But you see, the topic of customers and prices, these are very hot topics. I really attach a lot of importance and relevance to them. My friend stayed at a nice hotel. You see, he paid 130 euros in the past and now the price has shot up to 340 euros. So we don't want to object the hotel or anything else, but there's something going on that is not really justified. perhaps people are chasing profit too much. It's very, very strong. The cigar that I smoke used to cost 32 euros. Now it's 78 euros. And truth be told, of course, I can afford it, but this is not the point. What happened in the last year and a half that the prices go up from 38 to 76? But even the restaurant in Milan, with the and they basically placed outside of the threshold a valet in order to organize the queue and the line but there was no one there so I think that we have crossed the line somehow We really wanted to highlight this concept because we did perform this research and tomorrow we're going to basically present it to the rest of the company for the next three years. But we are very confident and do have trust also in those behemoth, in these huge, powerful companies.

We will take our next question from Chris Huang, UBS. Your line is open. Please go ahead.

Hello. Hi, good evening. It's Chris from UBS. Congratulations on the results, and I have three questions, please. My first one is just a clarification on the retail trends you earlier commented on in October. If I understood correctly, can you just confirm that the retail channel is still growing around double-digit? My second one is on comments you made on wages being 80% fixed. If you can just elaborate a little bit more on the wage structure and the remaining 20%, does that mean the more sales you generate, the less the wages go up in proportion to the sales growth? And my last one, a more high-level question, you seem very confident in growing also 10% in 2025. And of course, you mentioned the way you treat your consumers and their brand positioning. But what do you think is so unique in your business that allows you to continue to grow in this kind of natural double-digit rate and continue to offer from your sector peers? Thank you.

Well, you are very young and I have to tell you that in the past 22 years, on average, we grew by 11.5%. So this should be marked very clearly. So you should never consider the growth rate after the pandemic because we've always enjoyed quite the very same kind of growth then. Yes, 85% is a fixed wages and then the rest 15% is variable. But of course, if you have a high fixed wages, when your customer walks into the store, you are not driven to press them and to hassle them. the result is that they're not forced to sell at all costs then as far as october is concerned we are performing well really well like the past months really well also in terms of taste because you should consider that perhaps say if sales are performing well but your taste is so and so it's not the same thing you see taste is key style is key your brand is what matters the most you should never underestimate the fact that people sometimes are getting fed up with the general behaviour in the industry. I hope I was able to convey a clear message. Thank you for your question. So there are no more calls waiting. So the floor goes back to the host. So I am the host. So thank you. Thank you very much. It was a pleasure to exchange views with you. So we will speak again around Christmas. But please do consider and always think of how we can improve. Thank you and best wishes for everything. All the best. Bye bye.