Brunello Cucinelli S.p.A. (BC) Earnings Call Transcript & Summary

[Interpreted] Good evening Chorus Call operator speaking. Welcome to the presentation of the 9 months '21 revenues of the Brunello Cucinelli Group. [Operator Instructions] Speakers will be Brunello Cucinelli, Executive Chairman and Creative Director; Luca Lisandroni, CEO; Riccardo Stefanelli, CEO; Moreno Ciarapica, CFO; and Pietro Arnaboldi, Head of Investor Relations and Corporate Planning. [Operator Instructions] Now I'd like to give the floor to Brunello Cucinelli, please. The floor is yours.

[Interpreted] So here we are, and good evening, everybody. Kind investors, thank you for joining us, Dear investors, analysts, journalists. And we are all here, as you -- as always, Luca, Riccardo, our CEOs, sitting beside me; Moreno, the CFO; Dario, his junior CFO; and the whole team, 8 of them -- of us, sorry. Well, to tell the truth, I often repeat that I really like these calls. And this is the last one this year because there's none else actually scheduled. And we will have the next call in March 2022. And as it is custom, as we did this from the very beginning, when there is a call following the Board of Directors, we have quite a strong -- we have shorter press releases. Whereas, when there is no call, then we have broader press releases. So on January 2022, we will have a very broad press release. Whereas in March, it will not be so long. So personally, I really enjoy hearing from you. You see for us that for me, the best thing would be to speak to you once a month. So the way we did in the past year, 1.5 years, the toughest year in our life. So how about this call? How will this unfold? So first of all, I will read out the highlights. Then a second topic, a few words about the company, which is back to business as usual, as during normal times. Third, worldwide sales. But honestly, they're doing so well in physical stores, too, that we just want to devote little amount of time to it. And then to rather devote our attention to more important topics. Fourth, product, the Designer of The Year 2021 Award 2021. And especially, I myself, are always busy with the product because I believe the products really is key. And then the closing of the sales campaign Spring Summer 2022. Fifth topic, the final forecast for 2021 and the fairly detailed 3-year project, '21, '22 and '23, it's October already. So we have detailed for you here. And then sixth, we'd like to devote some time to these new projects for the account of Solomeo and also for the Brunello Cucinelli brand for the coming 50 years. So net revenues of EUR 502 million, up 9.4% at current exchange rates, plus 12% at constant exchange rates compared to 30 September, 2019. Excellent growth reported in Asia, plus 18%; Europe, plus 14%. And honestly, I don't want to read the decimals, but Americas, 7.9%; where, in this case, decimal is important with a limited decline in Italy of 6.9%, minus 6.9%. Retail channel, up 15.6%; and wholesale, up 3.3.%. In the third quarter of 2021, net revenues of EUR 188.8 million, up 12.5% compared to the same time in 2019, and now the revenues vis-a-vis 2020. So growth of 32.7% at current exchange rates compared to September 30, 2020, 35.4% at constant exchange rates. Then Asia, plus 35.9%; Americas, plus 37.4%; Europe, plus 31.6%; Italy, plus 21%. With the retail channel growing by 56.5%, the wholesale channel by 13.5%. This is what my comment on the highlights. The first 9 months of the year have gone very, very well indeed. The Autumn Winter 2021 collections are proving very successful worldwide. And everywhere, we are seeing a strong desire to return to physical stores. We honestly couldn't have imagined such an excellent result just a year ago. And all this leads us to envisage that we will end the current year with a wonderful 25% growth in turnover compared to 2020. Also thanks to the Designer of the Year 2021 award, that was given to us by the prestigious British magazine GQ. Our brand is receiving countless certificates of appreciation for its stylistic expression. That's very important as well as for the way it relates to humanity and the territory surroundings. And with the Spring Summer 2022 order collection now complete, we can now envisage a next year lift in the healthy balance between work and private life, with a growth in revenues in turnover of around 10%. So these are the broad highlights. So I apologize. There's a figure that is wrong in revenues against 2020, growth 32.7% at current exchange rates compared to 30 September 2020, plus 35.4% at constant exchange rates. They tell me that I misread something, anyway. So company to start with. So we can confirm that we are all physically at work, and 99% of us are vaccinated. For the remaining 1%, there are 3 doctors that have been here from the beginning of the pandemic. They are still with us, and they will be with us until the end of the pandemic, and they are available daily for swaps. All the stores in the world are open, and they're opened with the very same stuff as before the pandemic. And this is very important. And perhaps it also has a very positive effect on our sales. As you know, in March 2020, we decided -- we made actually 3 important decisions, very important ones. The first one, not to lay anyone off, this was March 12. And also, we decided to guarantee everyone the same salary as in 2019. We also decided not to ask for a discount. But you see I keep saying that this is part of who we are. And with all the surplus goods, we set up this project called Brunello Cucinelli for Humanity that you are familiar with, and it really gives us beautiful human experiences. So another important thing is that we don't have any trouble or difficulties with raw materials. You see because we have always believed in a healthy stock of raw materials. And even in 2020, it is true that for us, many raw materials really are staples for us. So you have raw cashmere and you need to dye it afterwards, so it's easier. As you know, all production is imperatively made in Italy with a true manual labor rate of 52%, which means a needle, thread, scissors, the true manual work. And then we have not reduced any major investments over this time, including investments in communication. In 2020 and 2021, it was always between 5% and 6%, and it stayed the same during the pandemic. In short, we would like to call this time the year of rebalancing, practically in all, but a few points on EBITDA, but I think it will be back. It will go back to balance next year. We feel -- you see inside the company, you can breathe that collective creativity on a daily basis, which I think you can only generate by working in a physical presence on site. Because if you work on site, there is a very clearcut distinction between family life and work, collective creativity and young people, young stuff can really learn the corporate culture. Then on to sales. As we said before, we tend to -- sales are going very, very well. I would say, all over the world, including in Europe. And as we were saying today at the Board meeting, Europe is always very, very important for the taste and the way we showcase the product. You know that we believe in a collection that brings along the same taste anywhere in the world. Maybe sizes change, you would have more small sizes in Japan and large sizes in Germany, but the taste and the design is the same. And in general, whoever you talk to, everybody says that things are going very well. There is a great deal of confidence, positivity, new projects in physical stores. A great -- some people redeveloped the store. And there is a great craving to see, touch, try on garments and also get advice from the salespeople, especially for men's, but also for women's. It is important to talk about one's wardrobe on how to mix and match the different garments. This is really true. So just a few seconds on sales, but it doesn't really need any more time because everything is going well. Product and sales campaigns, Spring Summer 2022. So we can say that our products and consequently, the brands, they are really experiencing great momentum. We won the Designer of The Year 2021 award from the British magazine GQ. And I have to say that this award makes us very proud. And it also gives the brand a very clear connotation of taste and identity. And as a result, perhaps it also contribute to longer life to the brand itself. Since when we were young, have always drawn inspiration from Ralph Lauren. You see Ralph Lauren's taste is still the same. You see it's still there after 50 years. So it seems to me that there is a very strong demand for particularly well-made clothing, and we have 85% ready-to-wear, kind of clothing that is a very handcrafted, exclusive, expensive but lasts over the years. Like if it was something you never throw away that you can reuse, repair, recondition and mend. This is something very, very contemporary. We have finished now -- 20 days ago, finished collecting orders for Men's and Women's Spring Summer 2022, and the season went super well. And we also received excellent feedback from the press. And you know that if the feedback from the press matches the feedback from the clients, then it's easier. If there is a mismatch there, probably it means that the brand somehow -- well, you need to work on it. So to conclude this, first part, we can say that all this leads us to look forward to a very positive 2022. And we can say that we are continuing along our path with very, very long-term projects, taking care of the way human beings work. And the workplace, everything needs to be special there. We try to stimulate creativity by trying to give human dignity and responsibility because this really rank high on the agenda. If I empower you, you are more creative. Then we try to take care of all the micro enterprises, 365 of them, the third-party manufacturers that cooperate with us. And we try to give them a kind of a long life, to the enterprises and to our territory. Because this value chain -- well, we can say that altogether, that we are attaching some sort of supply chain immortality to it. So to conclude on this, we can say that the -- you see with this supply chain of cashmere products, we hope that it will definitely be immortal cashmere products. We continue to believe in our way of communicating starting from Solomeo, which we define as the hamlet of cashmere and harmony. So we keep repeating that our hamlet is the hamlet of cashmere and the place where we try to live in harmony. And we claim that it is important to live and work in harmony with creation. This is something really important. This is actually what we mean by human sustainability. So now before moving on to major topics for the years to come. So the project for '21, '22, '23, the plan. As we are almost at the end of October, we are trying to give you our final thoughts on this, 2021, which we keep saying we have defined it as the year of rebalancing because apart from EBITDA, everything went back to all normal. So turnover up by around 25%. We grew slightly compared to the late -- the last call, but things are going so well that we feel pretty confident there. EBITDA around 13%, then inventory around 30% of turnover, and we consider this to be totally rebalanced. Net financial position, we should close with around EUR 65 million compared to EUR 93 million in 2020. So we are going to rebalance here as well. Investments always around 8% of our turnover. Clearly, sometimes, you are waiting for an opening in a specific high street. And then when this does happen, we seize the opportunity, and we pull forward our investments for the year. But usually with 8%, we can feel confident, 8% investments of turnover so that we can have modern stores, modern showrooms. Dividends around -- going back to around 50% of profit as per the ongoing plan. So this is 2021. Well, hopefully, God will help us. Now a few highlights for '22 and '23. So this plan envisages a growth in turnover of around 10% per year. You see in the past, we mentioned 8%, but we thought that we have to recover minus 10% last year. So this year, 25%. And the coming 2 years, 10% per year. So that together, we might then go back to our plan for the second 5-year plan. So we can resume our path of the 2019-2028 project. So the 2023, say it was the first milestone, I think that maybe we can reach that at the end of 2022. So for the coming 2 years, what we envisage? Turnover of around 10% per year growth. Then EBITDA that is rebalanced, an inventory that is balanced as it is already this year with interesting stock, as we were saying before. Continuously improving net financial position, investments around 8%, then advertising between 5% and 5.56%, dividends around 50% of profits. My esteemed [ defense ], these are the coming 3 years that we are working on, and we feel pretty confident. Now onto the -- some major projects that we have for Solomeo and the brand. First of all, as I was saying, we were awarded this important prize in London. It is an important prize for the taste because 1 day, maybe the company might suffer for a season or 2. But this state -- sorry, the taste is always very well identified. And Solomeo is very strongly identified as a place of cashmere and also identified as a way of working cashmere human capitalism and human sustainability that is very, very important. So we keep working on this project. The next week in Milan, we will be presenting to National -- International Press this big project for Solomeo. And as you know, it is taken care of by the family foundation, not by the listed company. And we think that this project, and we can't reveal anything about it, but we'll let you know in a few days. We think that it will give Solomeo further strength for the coming 50, 100, maybe 500 years. Then in this village, in this hamlet, we have the forest of the wood of spirituality on the hill. Then coming down to the village, we have the secular temple of the art, the theater. Then we have the headquarters in Vale. we have the winery with the monument to earth. To Xenophanes, everything comes from -- all things come from earth. And then we have the monument attribute to human dignity, something redefine that you saw. And then on Thursday next week, in Milan, we will present this new charming project, a bit on the expensive side, but I hope that you see children and grandchildren will keep believing in this fascinating project. So as far as the project that is important for the brand and for Solomeo. Then we have another project, a 50-year project for the company. So why -- you might say you always talk about 50, 100 years ahead? This is the 40th -- 43rd balance statement of -- financial statement this year. And the first 43 years of the company, we went through COVID, and we are about to restart. As you know, the place where we work, the places where we work, the property, buildings where we work, they are -- there's nothing new there. They have all been reclaimed. These are former buildings of the 60s, the 70s. They have been adjusted to modern life, modern working life. And I spoke about this with the Prime Minister Draghi too. Because we, in our surroundings, you see we have 40% of buildings that are absolutely not in use. So I said to Draghi, if the government can give us a hand there, we should try and redevelop the properties, these buildings. Otherwise, our peripheries, outskirts will be suffering. And truth be told, we had this chance here very close to Solomeo. There is a huge area, a giant company of 50 years ago. And until 30 years ago. And then as things go, it -- so we were able to buy this from the court, from a tribunal, a few days ago, 50 hectares. Everything needs to be reclaimed, obviously, because we are talking about factories and plants of the '70s and '80s making paint. But this will enable us -- will enable the company to expand for the next 50 to 100 years because we can build 70,000, 80,000 square meters. So over the years, it will be very interesting. So it is a great momentum for us because, on the one hand, we have the prize that we were awarded. On the other hand, we have this project of the foundation that I'll disclose next week. And then I'd really like you to send us an e-mail with your feedback on this with your opinion, I like it, or I don't like it. We'd really like to receive feedback from you. And then you should try and really understand, for us, this is -- you see these buildings are not for logistics. This is a true factory. This is a plant we manufactured here. We want to defend the know-how our production system. So tomorrow, we have -- visiting us from the European community, we have the Ministers of Agriculture. Because I had the pleasure -- about 20 days ago, I spoke at the G20 talking about human sustainability, so they are now coming to visit tomorrow. But this area I mentioned before, it really gives us the possibility to imagine a factory for the coming 100 years. So it is some sort of collateral or guarantee as far as spaces or surface area is concerned. So there will be a growth of Solomeo, of the brand. We feel very confident because of that. And now I wanted to tell you something with some emotion. Actually, I'd like to disclose that at the end of next week, I have been called to contribute, to give a contribution on humanistic capitalism and human sustainability in front of an audience that I would never have imagined in my life. So I cannot really disclose what it is all about, but this really honors us because in front of this kind of world audience, we will have a chance to speak about humanistic capitalism, human sustainability and relations with human beings. Because you know that this topic of sustainability. Well, I -- what I really -- I'm keen on is human sustainability because very often, we talk about emissions and of course, it's just a fair -- a right we try to recover -- to collect rainwater. But you see human sustainability is a great, great topic. So on October 31, I have been summoned to come to give this contribution. And I cannot sleep at night, and hopefully, the heavens will protect us. But I think it is a good thing for the company, for the corporate culture, for Italy, for Umbria because you see calling an entrepreneur to speak in front of such a worldwide audience to talk about humanistic capitalism and human sustainability, really, it is an honor for us. And hopefully -- I hope that you will get to know this is something very, very serious and important to us. So to conclude, so then you can ask all the questions that you want. We would like to consider this current year for these great events that have taken place as the some sort of golden year for our company. I don't know if you agree, Luca and Riccardo, golden year for the prize for the Best Designer 2021 for the brand, for Solomeo. And for the acquisition of this area that secures us for the next 100 years and also the participation in this great world event. So very well for the brand, very well for Solomeo. But you should know that we work always focused, but in a healthy mood of serenity. Because going back to work, a healthy amount of hours with a right focus, with a right amount of online time, I'm really happy with that. So this is the end of my speech. Please ask all of your questions. Then Pietro on Friday morning after Thursday, the 20th event, please send them all the communication and then -- so they can receive everything. So thank you very much for your attention. Let's open up for questions. We are here about, of course, not just tonight, you can ask away any time of the day. Of course, you can feel there's a lot of positivity in our words, but I am fascinated of the way how Italy is doing and fascinated by our President of the Republic, of our Prime Minister, Draghi, who I think they represent the best qualities of an Italian individual. Then I want to tell you something really interesting. The roadshow that we had in London about a month ago in presence when we were given the prize, and it was the first roadshow after 1.5 years. For the first time new analysts and investors told us that Italy is a credible nation because you yourself taught us the credibility is in the nation first and in the business later. And I said this to Draghi. I said it to everyone. You see investors now say that our Italy is credible. So invest in Italy. Hopefully, we will always behave well, and I'm very, very confident.

[Interpreted] [Operator Instructions] First question from the English conference call, Antoine Belge.

It's Antoine Belge at Exane BNP Paribas. Just a quick question, if I may. First of all, regarding China, in the third quarter, there's been some restrictions due to COVID. So is it fair to say that you may have had a bit of a weaker month in August and since then I think have recovered in September? And if so, share a few words about how the golden week went for you in October. My second question relates about potential new product categories for Brunello Cucinelli, especially, I think, in maybe areas like eyewear or perfume or jewelry. And finally, a bit of a more technical question. I think there was some impact of conversion of some doors from wholesale to retail, notably in the U.S. Is it possible to quantify what was the impact in euro millions both in a negative way for wholesale and positive for retail?

[Interpreted] So Antoine, I'll answer you the first question as far as China is concerned, You see revenues, 32% in the U.S., in the Americas, 44% in Europe, 25% in the East. This is a breakdown in sales and 15% of the 25% in China. I have to say that we didn't feel anything of what you mentioned. On the contrary, things are going very, very well. But you see Antoine, we can say that the most important thing here is that the brand is very healthy. And the taste is very healthy, too. Because as you know, there are -- usually, there is 5 years -- there are 5 years cycles when there is a louder taste and then followed by 5 years of a more understated softer taste. And this seems to be the time of the understated taste. That's why we are going well. We were not impacted. Then other categories and eyewear. So we started this great partnership with this exceptional company belonging to Luxottica, of my esteemed friend. And we did something very nice, we think. They have Oliver Peoples, this great company, about $100 million in the West Coast in the U.S. with a fascinating style that is very much along of our lines. And we have partnered together to design this collection, but it's not a license, mind you. It is -- you see the eyewear pieces will show the logo of Brunello Cucinelli and Oliver Peoples. Things are going very, very well there. And especially taste wise because I always like Hermès when they say [Foreign Language], it's a different trade. We are ready to wear. And this experience -- eyewear experience, we are very happy with the partnership. Maybe, Luca, we can talk about the conversion in the U.S.

[Interpreted] Yes, as far as conversion of stores in the U.S. is concerned, in America, we refer to Nordstrom and we are now switching some doors from wholesale to concession with them. As you can see from the general figures, Antoine, the growth is common in both retail channels and growth channels, and the effect of this conversion is not very much material in the first 9 months of the year. Of course, we keep looking at both channels with a lot of interest, and we are always ready to operate in most cases with wholesalers. And if the structure of our clients or their strategic positioning foresees a switch to concession, we can then accept. This is not something we're looking for, but it is an activity whereby we can adjust to the people and their strategic orientation.

[Interpreted] Yes, I'd like to add one thing. At the end of the year, our revenues will be 60% retail and 40% wholesale. You know that we always attach a lot of importance to wholesale because precisely the other day, talking to a very fascinating company, one of the best in the world, they were saying when you discuss with competitors, you grow. And discussing with the wholesale, talking about the collection, and you see there is less risk if you talk to your wholesalers. Thank you, Antoine.

[Interpreted] Next call from the conference call in Italian, by Flavio Cereda, Jefferies.

[Interpreted] Congratulations on the prize, first of all.

[Interpreted] Thank you.

[Interpreted] So I have 4 questions tonight.

[Interpreted] No problem from us.

[Interpreted] So the first one, you spoke about the importance of physical stores. So you said that all stores are open now or were they opened the whole quarter?

[Interpreted] No, no, the whole quarter, the whole 3 months they were opened. That's what I said by -- you see when I summarized, they have been open for quite a while now.

[Interpreted] And then new openings, new spaces, what about the plan there? Has anything changed there?

[Interpreted] Absolutely no change there. We want to have 2 openings a year always. Then maybe an extension of 2, 3 beautiful stores as it will happen in Madison Avenue in 15, 20 days, as it happen as was the case in London. This is the plan and it has not changed at all. So for the whole of 2022, it is all secured. We are very pleased to say that.

[Interpreted] So the other question is so considering your long-term view, what about the dynamics, menswear, womenswear, clothing, accessories? Are there any trends that you envisage, maybe different trends to the past? Or have we just gone back to normal in terms of the way people shop?

[Interpreted] Yes, it's a great question. Thank you, Flavio. So what we noticed is a great attention, a focus on menswear because you see in the past 3 or 4 years, menswear maybe was not -- was a little bit out of focus perhaps because taste was coming along for us. For example, in a number of pieces, we do -- SKUs is half and half, whereas in value, it's 58% and 42%, because womenswear, it costs slightly more, it's more expensive. So the most fascinating trend, I would say is that men and women want to -- both want to dress well. So then events, social events have started, so presentations and stuff. So it is very good. It reminds us of 1920, the roaring '20s. When in the U.K., you see the Prince Edward said we need to go back to dressing well. And then there was this famous decade. What we are seeing very strongly is that what we mostly sell is exclusive garments, expensive garments, but garments that are not very easy to throw away. There are long-lasting durable goods, although you see ladies will definitely keep shopping. But as opposed to 3 years ago, they keep saying this is a kind of a garment that I can keep in my wardrobe, I can use for the years to come. So there is a lot -- there's a different awareness nowadays. You see yesterday, Riccardo, you went to speak to Prince Charles in the U.K. about sustainability. So elegance and then garments, they do not throw away, high quality, that can be reused. So a lot of attention there. So what I say, Flavio, is that this is something we were not envisaging in the physical channel. You see that people crave entering into stores, crave touching and being advised.

[Interpreted] Two more questions on China. As my colleague said before, so you have a no logo products, and a kind of luxury that is not loud. It is understated. Do you have any concerns or worries about the populism we are seeing nowadays in China? Or do you think that you are pretty confident?

[Interpreted] Well, this is something that we mentioned also during the Board -- the meeting of the Board today, I see a huge future, giant, for us in China, but for everybody. But one thing is for sure, we need to get to know their culture better. And we need to maybe approach them in a slightly better way. This is what we want to do in our company. We hold courses and classes on Chinese culture, on how to approach them. And maybe, Luca, you can dwell on this on what the council yesterday said this great meeting in Milan. It's very interesting. Listen to Luca.

[Interpreted] Yes, I liked it very much, Luca. I like to -- Flavio. I'd like to hear the Chinese counsel that just took up term in Milan, who met different people from different companies active in China and Italy, and he said, "We do not want to dominate at all. We just want to offer citizens a good life, and we will keep doing that by paying a lot of attention to the balance between economic growth and social stability." And in these words, we do not see a threat at all, Flavio. No way. On the contrary, we believe that it is the natural development model of a country that has a lot to offer from the cultural point of view. We belong to this association, Italy, China. what I say. And please be care -- be mindful of this, we want to approach China the way we did with the U.S. and Germany years ago, a lot of respect for their culture. Because you see there is a golden century ahead for them, for us, for mankind. But at least in my case, I want to display respect for them because if you don't have respect, everything changes for the worst. But I can see it from the interviews. We had a lot of interviews with them this year. They are really seeking sustainability, beautiful things, exclusive things, the great values, especially the younger. You see there is a change underway, a strong, powerful one. And we want to have an amiable approach to this Celestial Empire, that's the way we dubbed it. And this -- my contribution on the 31st of October, I can't tell you where I will hold this speech, but there will be some important representatives of Chinese culture, too.

[Interpreted] My -- the last topic I want to touch upon. We have all the time in the world. The Solomeo project and this event, and you'll give us the details. But about the industrial projects, the timing. Do you think that you will start with that in 2022?

[Interpreted] Well, no, no. Thank you for your questions. So as we said until 2023, we are catered for. The space that we have is enough. This is -- we have made the purchase of the land. Now we will start reclaiming in 2022, and we will start the first redevelopment works at the end of 2020 -- in 2023. So that already in 2024, there will be something, but we will not build you see many, many cubic meters. We will expand 10,000 meters a time following on -- tolling along the growth of the company. The idea is that in 2028, we will have doubled the revenues vis-a-vis 2018. So it is a constant gradual growth, and it is not too challenging in terms of investments because it is sometimes made stepwise.

[Interpreted] Now Milan is playing very well. AC Milan is playing very well, so you will be happy.

[Interpreted] It's true. That's Italy, too, isn't it, Flavio? Italy won many different medals and trophies. We are Italians, and we won the first prize there, too, very well. You see it's part of the really good moods that surrounds Italy nowadays, the government and less arrogance. And today, too, the Ministry (sic) [ Minister ] of Finance, who does not speak a lot, but he also said we can enjoy good growth. We like this momentum for Italy.

[Interpreted] Next question from Paola Carboni, Equita.

[Interpreted] I had two questions. You already answered the first one. The investments vis-a-vis the new industrial plan. So this has been answered. What I was intrigued to understand, if you can give us a few colors on the positive surprise for you in this strong performance of sales.

[Interpreted] We had a plus 20% for 2021. That was the guidance that is plus 25%, yes. Well, Paola, we can say that the first good surprise was Europe first and foremost because we have many local customers there. You see they would say Europe without tourists, and that was the first to suffer. But -- then secondly, Americas is also performing very well. But if you were to ask me, are any countries lacking behind? I would say none. So maybe you see there are companies that really make billions in those countries, and then that's where everything becomes more sensitive, but it is not our case. As you will have seen, we only spoke about sales in -- for 1 minute. And even at the Board meeting this morning, we said, let us talk about sustainability, 10, 20 years plans and not sales -- specific sales at this moment in time because they're going -- sales are going even too well, I might say.

[Interpreted] And in terms of distribution channel, was retail stronger than expected?

[Interpreted] No, I have to say the wholesale, too, is going very, very well. They have a whole range of events, beautiful windows -- shop windows. I know that we keep talking about wholesale, but I'm fully convinced that you see -- you can actually feel how contemporary your brand is from them. So things are really faring very, very well. Well, Paola then, of course, the price that we received has definitely bolstered the visibility of our taste. That's for sure.

[Interpreted] Next call, [indiscernible], bank of America.

I have three ones. So the first one, could you please elaborate a little bit about demand by nationality, especially on a 2-year basis? So Chinese, American, European, what have you been seeing there in particular? So not just by geography, but by nationality. My second question would be -- could you please talk about how significantly Italian revenues were impacted by wholesale timing and deceleration versus any weakness in the retail channel that you might be seeing because of lack of tourism? Or how -- like can that drop be best described quarter-on-quarter? And also a small housekeeping question. What was the constant currency growth in the third quarter on a 2-year stack? Because the algorithmic calculation...

[Interpreted] Can you repeat the last question, please?

Yes. So like it's a housekeeping question. So what was the constant currency growth in the third quarter on a 2-year stack because the numbers that you report constant currency are slightly different from the algorithmic calculation. So I just wanted to confirm.

[Interpreted] Well, the last question was not really clear on the calculation. So as far as the weight of China in the world, so we have 15% in that world in China. Then 4%, 5% might come from Chinese customers that travel the world. This is not very easy to have a breakdown because we have the wholesale, too. But today, if I -- we can say that 20% of our revenues comes from that magnificent place. Then as far as Italy is concerned, we have more or less 12 -- 13%, but Italy plays a very important role for us because nearly everybody comes to Italy and to France and to London to see how the goods are displayed, how the brand is faring. And you can see it very clearly from how this happens in some stores. And then for the last question, I did not understand it properly.

[Interpreted] So if I understood properly, I think that the difference vis-a-vis the recalculation of the basis of 2019 can only be linked to the different geographical areas. In 2019, we still had an area that was rest of the world. This area does not exist anymore because it is part of the 3 continents. The only exception to continent is Italy because this is a domestic market. So we are keeping it apart. Then as far as the whole figure is confirmed, I can confirm the growth to 2019 in the quarter is 12.5%. And vis-a-vis 2020, it is 9%. Was it clear for you or if you want, you can ask some more questions.

No, no. So versus 2019 in the third quarter is 12.5%?

[Interpreted] Yes, 12.5%. That's right. Yes, we can say that in -- we now break down the world in 3 geographies: Americas; Europe, including Italy; and Asia. This is the new breakdown. As I was saying, Asia 24, 25 points at the end of the year. We estimate that 14 of this is China.

[Interpreted] [Operator Instructions] There are no other questions in the list.

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[Interpreted] Chorus call operator speaking. The conference call has ended. You can now disconnect your phones. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]