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

[Interpreted] I would like to hand you over to Luca Lisandroni. please go ahead, sir.

[Interpreted] Good evening, everyone. I'm Luca, and tonight, I have the honor to report on the results of the first quarter 2023. Brunello and Riccardo are in Dallas at the moment to attend the celebration to thank for the award, the Neiman Marcus Award. I got Pietro; Dario; and Moreno here with me at Solomeo, and Moreno will be involved in the succession that I will be covering at the end of the presentation. But I would like to do with the first part of the presentation to report on the few facts and figures for the first quarter and then on the market performance, then we'll be introducing the new fragrance project, and I'll be making reference to the new items that we just launched, how they are positioned in the market, and I'll be introducing you our partner in the fragrances business. And I will be describing the approach that we have followed so far, and that we would like to maintain also going forward. And then we will be updating you about the evolution of our eyewear product with Luxottica. And then we'll be concluding with some remarks by Riccardo who will be connected from Dallas and who will be demonstrating our production plans. Starting with our sales. Net revenues, EUR 275.3 million (sic) [ EUR 265.3 million], up by 34.7% substantial growth. And at constant exchange rates, a growth of 32.8% versus Q1 2022. We have grown in all geographies. Americas, 42.9%; Europe, 15.8%; Asia, 56%. The revenues have grown both in the retail channel, 73.3% (sic) [ 63.7% ] for the retail and wholesale 4.7%. And this is how Brunello commented on these results. The first quarter this year ended with excellent results. There is no doubt that we are reaping the fruits of the positive figure that our brand is experiences for the style it represents and perhaps also for the way we share our ideas with all our counterparts. And regards to our market segment of absolute luxury, we continue to have a very positive vision for the entire coming year. Every day, we are working on new projects for a high-quality, exclusive handcrafted garments, and it pleases us to imagine that they express a refined and contemporary taste. The strongly positive response to our men's and women's autumn/winter 2023 collections and the flattering judgment expressed by our esteemed multi-brand outlets and by international media, coupled with the beautiful [ mystere ] of our boutiques and our plans for major investments in advertising and events in stores and [indiscernible] Cucinelli lead us to envisage a significant growth in revenues of about 15% for the current year. So considering the results I have just commented on, we believe that behind this growth, there are structural elements and temporary elements. And I would like to mention 3 of them in particular, starting from the first, which is we got the impression that the first quarter of 2023 has been characterized by [indiscernible], I would say, of goods on the market. By comparing Cucinelli with other peers, we got the impression that the 2023 spring/summer collections have not been delivered on time, as was the case before the pandemic. This is why our short supply chain, which is very active when it includes early [indiscernible] craftsman together with raw material procurement policy, which has always focused on the -- our needs also during the difficult times of the pandemic have accounted for a competitive edge in this first part of the year. The second element, which I would like to mention is the Neiman Marcus Award. I know that it's not common to think of direct correlation between awards and the impact on sales, but it is true that starting -- well, you know, first of all, that the award was announced to Brunello in November last. And in November, we witnessed an increase of our sales first in the U.S. and then in Europe and in the rest of the world, which was concerned again in March when the event of the award took place. And what happened in the first part of this year was witnessed already in September 2021 when Brunello was awarded the prestigious GQ award. And on that occasion, again, we realized that this increased visibility due to these prestigious international awards turned out into growth of our sales. And the third element, which I said is substantial impact is the comparison of our sales between '23 and '22. During the latest conference call, I remember Brunello defined the very good performance -- I mean, the good -- the performance on the first quarter '22; very good, The second quarter of '22; and excellent in the last part of 2022. So we faced already strong performance in 2022. So considering these temporary as well as the structural elements, we believe there is another very important dynamic. That is to say the change in pace towards more sobriety. We had already -- had the impression that this trend was materializing mid-last year. And I remember, we already mentioned this during one of our conference calls. But today, we have been impressed by 2 factors. First of all, the rapid pace of the change we are witnessing, and then its relevance in the various geographies where we operate. So much so that this trend has grown particularly strongly in the States. But also in the rest of the world, we are witnessing an increasing trend towards sobriety. Coming to structural elements, I think I can summarize this dynamic that we are witnessing, that is exclusivity. You know that exclusivity is a key element and a key value in our definition of luxury. And currently, we see a clear difference between absolute luxury and the rest of the market. We have witnessed that all brands, even the top ones, are enjoying incredibly good performance. I'm not just referring to apparel, but I'm also referring to luxury watches or hoteliery. So this trend is actually cross-sectionally involving all these market segments. And then very briefly about geographies and channels. Because first of all as far as geographies are concerned, we are particularly happy with the contribution of the various geographies. And if I have to pass a short judgment on the performance of the various geographies, I would say that the Americas did great, so very excellent performance, a very strong performance in Europe, and a very interesting trend in Asia. Starting with the Western part of the world first, we have been pressured that in the U.S., the demand for absolute luxury has become structural. As far as we are concerned, this demand is well balanced in the United States. And in the Americas in general, and it's growing also size of the large metropolitan areas where we are present through our wholesalers. The award I just mentioned provided momentum to our growth in the Americas, and this is borne out by our results starting in November and week after week in our Neiman Marcus stores. Coming to Europe, the first comment I would like to share with you because I believe that none of us could imagine such a high and strongly growing demand in Europe before the pandemic, we are particularly happy with the results that we have achieved in Europe in the first part of the year, which was characterized by 2 major relocations, 1 in Rome and 1 in Forte dei Marmi. These 2 stores where franchising stores have now become directly owned stores. Such projects were very -- I mean, involving these 2 relocations were very interesting projects. Because again, we focused on the intrinsic characteristics of the areas where we were relocating. For instance, in Rome for the new store, we have used materials like marble and precious wood to pay homage to the city. And then Forte dei Marmi were we used the typical materials of the area. These 2 relocations though different do share the same idea, namely that of being welcoming that we hope is a characteristic that our clients will appreciate. About Asia, Asia is reporting very positive trend also in terms of overall sales. And this growth is driven by the countries like China, Middle East and Japan that have driven our retail sales, in particular. I am back from a 10-day trip in China, and I got the impression that the country is very likely, I mean, full of projects. And there is a prevailing idea that the future will be better than the past. We are achieving incredibly good results in China, record results in China. And by dialoguing with our team in Shanghai, in Beijing or with our multi-brand clients, I had the impression that the outlook for 2023 is considered to be very very rosy. In China, our brand accounted for 23% of sales in 2022. We have 19 directly owned stores that will grow in importers going forward. And we believe that 2023 will be an incredible year especially for the top luxury brands. And by reading the speech by President Xi over the next 5 years, I found a statement which I share fully. The Chinese president referred to stability as a prerequisite for prosperity. And I believe this sentence summarizes what happened in our company and in our industry in particular over the past few months. Luxury is now part of the lives of millions of Chinese clients. And we believe that their desire and their search for refinement can only grow over time. And now a few words about Hong Kong. Over the last few years, we didn't talk much about Hong Kong. However, having spent some days in Hong Kong, I noticed that the energy there is even higher than I normally found in 2019. And most importantly, I realize they have a very busy calendar of cultural activities that pay well and partially new and further reason for attracting tourists from throughout the Asian continent. Let me now talk about the Middle East, and Dubai, in particular. Now this region is obviously going through a very lively time. And we believe this is due to 2 main factors. The first is the relocation. There are lots of people coming from Russia with their business, with their economic activities. And the second factor is the image of Dubai as a charming place where tourists from all over the world are likely to find a level of service and hospitality and entertainment, which is quite unparalleled worldwide. So we believe that this year will be a so-called extraordinary year for Dubai. But at the same time, we feel that this positioning and this international image may still be there over the medium to long term and be very beneficial for the region, which is actually one of the youngest regions in the world. In Dubai, we just opened our second store in just a few days ago at the Mall of the Emirates to go with the existing store we have at the Dubai Mall, which actually offers a good representation of the brand in Dubai, which I'm sure will become the most important luxury capitals of the world. It actually already is a leading city. Then Japan. Japan is another country we haven't discussed much recently. Maybe because the market is almost exclusively a domestic market, and also because normally this market has very long cycles. However, Japan is a very charming country. It's maybe one of countries where quality is most highly appreciated. As far as business culture is concerned, you realize that the market is actually working around in hand with department stores that are yet very contemporary. They're very up-to-date and have a very loyal customer base. In Japan, we posted a very nice growth in the first quarter, so we are happy to say that based on stores and corners in department stores, our growth is absolutely comparable with the growth we posted last year. Let me now come to individual sales channels. My first comment will be about wholesale. Wholesale is increasing by 4.7%. However, if we look at that single number, please remember there's been a very important factor last year, namely, we were asked to provide very early deliveries of everything we have ready for the spring/summer '23 collection. And so we did ship a lot of the early deliveries to our wholesale channel last year to confirm the fact that we are actually selling much bigger volumes today. Should we try and neutralize that early delivery season? Let me remind you that in the fourth quarter of 2022, we posted a wholesale growth of over 50%, 53% actually. So I would like to urge you to assess the growth we posted in the last 2 or 3 quarters. And if we smoothed that out, the growth would be 23% per quarter. And we feel this is a very clear and very reliable representation of the quality of the orders we've collected for this season, and the very flattering judgments that clients expressed about our collections. Now speaking of retail, of course, 63% growth in retail is definitely much higher than our expectations at the beginning of the year. And this is the reason why 1 month ago, we decided to change the guidance and to upgrade it from 12% to 15%. On the other hand, we believe that all investments we've made in the last few years in terms of relocation, extensions, renovations, and we believe these are just as important as new openings. So all of those moves together provided us with a network of stores that are young and fresh and totally capable of capitalizing on a very positive momentum, like the time we're living through now. On the other hand, the second half of the year will start from a much higher comparables. And so quite reasonably, this will slow down our positive growth without, of course, altering the quality of our performance. Now physical versus digital. We're still going through a very beautiful moment in time because people do feel the need and the wish to go to physical stores. People feel the need to spend time together, and this is shown by the great participation to all sorts of events we've been organizing over the last few months. So physical network is in great shape today, which doesn't mean we're less than devoted to the digital side of our business, which is still fundamental, absolutely paramount to promote the company made through its products too. And our e-commerce performance is positive today and in line with our expectations. So to give you a final wrap-up of our performance, in view of the first quarter 2, we can confirm full year growth of revenues of 15% in 2023. We imagine retail is going to keep growing quicker than wholesale. So by the end of the year, there will be a slight shift in the channel mix as compared to 62% wholesale, 38% wholesale. We had the end of 2022. As geographies go, we suppose all regions are going to grow and be very healthy by the end of the year. And in particular, we expect [ most ] contribution to come from the U.S. and Asia. So our results, and I hope I wasn't too long, and I was clear enough, our results are what I just reported, and I'll stop here as far as our data are concerned. And I'd like to give some minutes to discuss in our fragrance projects, starting with the reason that has been pushing us for quite a few years now to fully analyze and investigate this market. So even before and more than the economic opportunity -- and by the way, let me straight away, we expect that economic results will become interesting in the next 3 years, at least, but the main driver behind our fragrance project was the charm of these products. When we presented the project in Milano, Brunello said something that really struck me. He said that fragrance is like a crescent, someone that together with trust would give people all the colors of affection. And so for us, the launch of fragrances is like starting a new branch. And for a brand, which is so involved in selling [indiscernible] sensory feelings like we are, that means a new dimension to whatever we do. We've always imagined that it's impossible to describe your touch and you're feeling by words, but at the same time, we think that our touch has great memory and our smell has even better sense of memory. So much so that it can actually capture indelible memories, of places and faces and circumstances. So you know that we consider our brand to be a lifestyle brand, which is rooted in ready-to-wear. So the introduction of fragrance will hopefully help us further characterize our universe and consolidate the matching between our brand and single top quality level in everything we do in whatever product we engage in. So this is the reason why we started investigating fragrances. So we started searching for the right partner to actually accompany our approach to this product category. And we have been actually driven to our partner because of the high reputation they enjoy in the market. And we actually found out that we have a lot of elements in common starting with the fact that Aero Italia is a company which is 100% Italian. And so we were really struck by an interview that the founder and Chairperson Mrs. Giovanni Garibaldi released, and he said he considers the Made In Italy to be a full responsibility. So it is an Italian company, but it's very international in its commercial footprint like we are. And with the medium-sized dimension like us. Although Euroitalia is a company that's a family company and their work ethics and values that are really, really similar to the values that inspire us. And so we started our collaboration just before pandemic. And it was unbelievable. It was incredible to see how Euroitalia eventually get to the same decisions we made to totally protect the company structure to avoid harming anybody like we did and they also just to do it very naturally. Last but not least, it's a company that immediately grasped our positioning and also the peculiarities behind our brand. And so we worked together to write down a long-term program and long-term project. Our company gave a very active contribution in all the phases in the development of this process. And this is what Brunello means when he says it's a contemporary license and idea. So the first few meetings started as early as 2019. Our first priority, of course, was that of working on the fragrance itself. The idea was that of conveying that same concept of refined elegance, of sedate elegance, of allure and of sobriety and everything we stand for. So we also like the idea that both the masculine and the feminine fragrances would be connected to each other with a clear memory of our local communities. And now our local towns. So since the first 2 fragrances we're providing, we tried to work to find an element of continuity over time that might actually serve a bit like the famous cashmere roundneck sweater. So both fragrances were born in collaboration with the [indiscernible] family, with our noses Daphné Bugey and Olivier Cresp. I would like to warmly thank for their availability for their patience for the major skills they have shown of converting words into olfactory notes. So as soon as you'll be able to smell those fragrances, and all I can tell you is I hope you'll like them. And I'm sure these are the outcome of the merger of heritage and modernity because they're based on natural raw materials, top quality raw materials that are extracted and processed with state-of-the-art technology, which is designed to emphasize the contribution of each individual olfactory note, and to make them all stable in the end. So you understand how important the multi-brand stores and their assessments are for us. And when we presented these fragrances in Milano, we seized the opportunity to invite some of the leading European perfumeries to the presentation. And I have to say that there were 2 objectives that came up over and over again when testing these fragrances and they were modern and precious. So hopefully, this comment is going to accompany our 2 first fragrances to the success they deserve. What about their positioning? Positioning of these 2 first fragrances will be on the top part of the non-niche market. It's the same position we have for all other product categories. In numbers, the 2 -- well, first of all, we are keeping the same price for both men and women, which is quite unusual in the market. And both fragrances are going to retain for EUR 108 for the 100-milliliter bottle, which is a premium of 20%, 25% as against the most important luxury peers. As far as distribution is concerned, these fragrances are currently being sold in a kind of a prelaunch campaign in the boutiques of Milano and Solomeo only. We followed 2 guidelines. One will be completing the coverage of our own single brand stores. And after that, we will start distributing to the most important perfume shops globally. The scheduling is we're going to start distribution in Europe on May 20. Then in October, we'll distribute it in North America and starting in January '24, we'll start distributing the fragrances in Asia, too. Let me now switch from fragrances to eyewear. We still have a very successful collaboration with Oliver Peoples, which is going to continue throughout this year until the end of the year. And right now, we are presenting the last models in this collection. And I have to say we're very grateful to Oliver Peoples because with this collaboration, which started from prelaunch and went on for about 3 years. So we have accumulated a very valuable experience because it allowed us as a company to get to know the competition channels and to position our first products of eyewear in the top layers of the market, in the upscale market. And we feel that the taste that characterizes this products has been fully acknowledged and appreciated by our clients worldwide. In parallel with this, we are working on the first prescription glasses and sunglasses collection branded Brunello Cucinelli, which will be available from 2024 onwards and will also have exclusive distribution. Last week, we spent a wonderful day in Agordo, and we dedicated the whole day to the product. And we were really amazed by the level of care that we were given. And we were really very struck by the collaboration between our teams and the Luxottica teams. We have already imagined a product, which will highlight the main collaboration possibilities coming from 3 factors: the capabilities of designers, the artists and skills of the masters of this craft, and most importantly, the major possibilities provided by technological innovation applied to individual production phases. Personally, I hadn't been in Agordo for 7 years, and I must say that I have the opportunity on that trip to appreciate that the great attention devoted to the top quality. As Mr. Del Vecchio has always done, has, on the one hand, increased the quality of products but has also contributed to extending creativity. By visiting the production plant, you immediately understand the culture prevailing there, the culture of quality, quality that can be found in every little tiny detail. Quality in the way the tools, for instance, working tools are kept. And also the attention devoted to people. And the cleanness of the premises as well was striking. We didn't find anything in hundreds of square meters of surface area of this plant. And now I would like to hand you over to Riccardo, who will be commenting on some new projects. Riccardo, can you hear us?

[Interpreted] I can hear you, and I do hope that you can hear me as clearly as I can hear you.

[Interpreted] Yes, we can hear you.

[Interpreted] As you know, I'm in Dallas where tonight we'll be honored to be awarded the Neiman Award that was already delivered in Paris. As Luca already pointed out, this award contributed, is contributing and will go on contributing to our results. I would like to thank wholeheartedly the Neiman Marcus team that honored us with this award. Neiman is one of the most traditional department stores in the States. They have been in the States for more than 100 years. And considering what they have managed to do with their stores, we believe the grounds have been laid to continue existing for the next 100 years. Coming to our project, about the development of a new production plant, we are going to open a new factory in Penne this year that will become operative Q4 '23. As you might know, Penne is a special place. First of all, it is part and parcel of the Italian history of craftmanship of men's suit manufacturing because of Brioni is there. It is an area which in top-level handcraft skills. And this is the reason why we have decided to develop the plant, a new factory there. And we expect a sound and progressive development going forward. In the mid and in the term -- in the mid and long term, further development of our menswear. You know that we have another production plant in Carrara which is another district characterized by top quality and craft. And acquired the Sartoria D'avenza in Carrara some years ago. And Brunello has reiterated our commitment to developing skills and competencies to develop and manufacture top level and top quality menswear. It is important for us to ensure the dignity and the economic dignity of craftsmen, as well as the quality of the workplace and I do hope you'll be able to see that this factory mirrors these values. So my best greetings from Dallas, and I hand you back to Luca.

[Interpreted] Thank you very much, Riccardo. Just a final point to mention our succession plan. 15 years ago, Brunello considered the issue of the longevity of the company, and he developed the so-called agreement between generations, whereby Head of Function, when turning 60, will have to hand over the responsibility of the action to a younger person. In the history of our company, we have already witnessed successions of this kind based on such values. And we are happy to say that the successions have granted business continuity at best. And from a, say, more human point of view, this succession has taken place in the most harmonious way. So in the next few days, our CFO, Moreno, who is here with me tonight, and who has been assisted by Dario for over the past 12 years, will hand over the CFO function to Dario. Moreno will stay in the company and he will go on providing a valuable contribution to our company. He is an example of integrity and of righteousness. And he will be acting as senior CFO. Just to give you an idea what is going to happen, it's like being on aircraft with 2 pilots. So far, Moreno was the main pilot and Dario was his assistant. From now on, they will be exchanging roles. So I would like to congratulate Dario on his new role, and would like to thank Moreno wholeheartedly on behalf of our team for his contribution so far for the valuable contribution, I'm sure he will be continuing to provide to our company.

[Interpreted] Thank you very much, Luca, and good evening. Well, after this announcement by Luca, I believe I have to say a couple of words. I joined this company 30 years ago, and I've been assisting Brunello in making this succession plan become a reality. Now we have rules that are well defined, and today, I can ensure that such rules were well devised considering for the first time I'm involved directly. So I will go on providing my contribution to the company as a senior CFO with a great passion and devotion. And Dario, who is taking over thanks to his merits will be able to count on my last passion and for this company and on my experience. We're believing that this succession will take place as naturally and as harmoniously as Luca has already mentioned. I would like to thank you all analysts, journalists, because thanks to your comments and your questions. I've learned a lot. And I've had the opportunity to provide my contribution to report on our facts and figures with all the transparency that has always characterized us, and also comment on the dynamics that have driven our results, financial and economical results. So thank you very much. And now we're ready to take your questions.

[Interpreted] [Operator Instructions] So the first question is by Flavio Cereda by Jeffries.

[Interpreted] First and foremost, I would like to congratulate Moreno on his job over the past years. I do hope I'll have the opportunity to meet you again shortly. I do hope to have the opportunity to meet you again. And then I've got a question to our friend in Dallas. Riccardo, if you're still there, about the Penne project, can you tell us about something more about Penne? Is the factory -- I mean, was the factory already there? Why did you select Penne?

[Interpreted] We selected Penne as the location because Penne is historically a district of craftmanship, together with Naples and the Tuscany districts. The Penne district has always been one of the areas where the best craftsmen in the field of menswear have always worked. So Penne has always grown and craftsman skills have been developed, thanks to the presence of Brioni as we already mentioned. So this is the reason why we have decided to select this location because we know that the skills, the competencies are there, the know-how is there. There are excellent craftsmen there who know how to manufacture tailor-made men's suits. And you know that the men's suits for us are the best way to tell a story, the story about the materials we use, the design. I mean, men's suits account for the outfit by Cucinelli and consider that we expect strong growing demand for men's suits and men's garments in general. We believe the decision of developing another factory in Penne is the right decision. Of course, we always think of the future of this company. And we believe this was a necessary step because we believe, as I've said, in the growing demand for men's suits. And to reply to your question, we're not going to acquire an existing company, we're not going to acquire an existing factory. We'll be developing a new one. And this will enable us to become operative Q4 this year, and then we will be progressively developing our production capacity to meet the demand for luxury menswear.

[Interpreted] Congratulate Brunello on this award.

[Interpreted] Next question by Melania Grippo at BNP Paribas.

[Interpreted] This is Melania. Could you please give me more information about your performance in China? I think it's very strong. Can we have more details about it. And can also -- can you also elaborate on e-commerce? You told us it's growing even more than originally expected. Can you give us some numbers about that and the major growth of retail, too?

[Interpreted] Thank you, Melania, let me take your last question first, digital commerce. We sell 6% to 7% of our revenues digitally. And Besides that, we can just have estimates of the digital activity from our e-tailers we serve and the digital component of the sales of our wholesale customers. We always estimated that the right balance between direct and indirect sales will be complied with for e-sales, too. So overall, we estimate our digital sales stand between 13% and 14%. China, as I told you, China is performing really well. It's going very well for Continental China. It's going very well in Mainland China and Hong Kong and Macau and Taiwan too. In this geography, we've always looked for growth totally consistent with the brand position in other geographies. As you may have noticed from numbers, and the impact of Asia in the first quarter compared to 24% that Asia represented in 2022, Asia now accounts for as much as 28% of our revenues. And quite frankly, this is a very, very positive number. Over the long term, we keep seeing in China, a major opportunity for ready-to-wear to begin with. And secondly, for top positioning brand. And even more so, for those brands that successfully interpret the Chinese people's culture with open-mindedness and a real desire of understanding. We're not forcibly trying to speed up our growth in that region by doing things that we don't really feel, but we are very happy to see that through our offer and our proposals, we manage to accommodate the choices of many Chinese customers and increasingly so.

[Interpreted] The next question will be asked by Andrea Randone of Intermonte.

[Interpreted] I also have a question on Penne. Could you please comment on the investment there? I guess it's included in the guidance you gave us for the CapEx of this year. But could you please elaborate on that? And how many people will be involved in this project? And the second part of the question about Penne, is it more strategic? And I would like to understand whether this decision is also at least partly based with your customers' desires to be somehow reassured on your direct involvement as a guarantee of top quality and top control. Is that a factor? Or is it just an industrial decision? I hope my question was clear.

[Interpreted] Yes, it was, thank you. Let me try and take your second question first. Actually, we can exclude the fact that one of the reasons why we decided to invest in Penne is that the market explicitly requires greater control. I want to highlight the fact that our production chain has never been challenged in terms of its ability to provide top quality and top artisan quality, even though we all understand it is production that relies on the entrepreneurship of about 400 smaller workshops. So for us, this entrepreneurial level, this artisan skills, the capability to rely on workshops that find the right production solutions with us and that actually contribute large amount of creativity has always been very important for us. Now we don't want to change that business model. And the reason why we decided to verticalize or to make a direct investment in this facility is that we want to be quick. Right now, we have a very high level of demand, but in particular, if we think of multiyear planning horizon, we want to be in a position to act quickly and to have an impact on a geography that basically leverages around experience of a single individual company. So for the future, we're not aiming to change our production model, and definitely making this kind of direct investment means invest in resources, which we are going to deploy very, very quickly. So to answer your question, yes, our numbers do already include a part of that investment, which, as we said, is a multiyear plan. It's a long-term investment we're thinking of here. And like we did in Carrara, we want to really dig down in this very fertile ground and become rooted in this artisan soil. So we are thinking of a long-term investment. So as I said at the beginning, this is a very important but progressive investment we are planning, so we will start immediately. But we're willing to grow and we're willing to include and insert more and more people together with the greater and greater demand we'll get from the market. We'll be able to respond to that demand and we'll proactively produce all the products we'll need. So we're thinking of what is certainly going to be an important investment. Because as you, our way of working out beautiful factories means that we may spend a bit more to take care of all details, to have all the proper windows to arrange suitable temperature, to take care of all those factors that make a factory a beautiful factory, to make something that could be just a workplace into a dignified, beautiful place of work where people spend a lot of their working day or day in general. So it's got to be as welcoming as possible. And as far as the headcount is concerned, since we'll increase progressively, we cannot really speak of the number of employees immediately. We're looking at the long term, again. Now of course, all production facilities for shoulder pieces require a minimum amount of people to be effective and to keep the right quality. So we will begin immediately with a minimum amount of people would need to hire. But the purpose for the next 10 years or 20 years is that of creating a very important production facility and a very relevant one that will keep quality, and will keep the same uncompromising quality even as it grows. So we'll accommodate growing demand without jeopardizing quality. We've always said to manufacture twice as many products, we'll need at least twice as many hands to manufacture them. So we'll still hold strong on that principle, and we can't imagine an investment, which is going to be scheduled for the next few years and is certainly going to be a pretty relevant one.

The next question from the conference call will be in English by Chris Huang of UBS, please.

Congratulations on the results. This is Chris. I have 2 questions, please. Firstly, on retail. You printed a very strong Q1, which is triple digit above 2019 level. So just sticking for the rest of 2023, according to the trends that you are currently seeing across the road, do you think is it fair to assume that we should see a further sequential acceleration versus 2019? So that's my first question. And my second question is on trends by consumer nationality. So your Q1 had a very strong growth in the Americas and Asia. But can you maybe comment on growth by consumer nationalities such as Americans and Chinese? Any qualitative comments would be very helpful.

[Interpreted] Thank you very much. Now as to your first question, the first quarter, Q1 was definitely an excellent quarter. It was also helped by the comparison with 2022 actually. If we look at our estimates, which we consider to be absolutely robust, our 15% growth by the end of the year. Please remember 2 numbers. So the first is that from April to December, we will sell about 800 million, which is actually more than what we sold throughout the whole 2021. So the objective is very important, and we are aiming at very high goals. Secondly, if we look at the impact of individual quarters, in 2022 had a pretty exceptional performance because between April and December, we have been gathering nearly 80% of our yearly revenues, which is quite unprecedented in our track record. And if we look at the longer term, we keep believing that the general approach and the objectives we set ourselves is that by 2024 and 2025, we expect to grow by 10%. So that's been our growth pace. And this is what we are aiming at. And as we've shown last year, we are here to serve our clients at best, be them end consumers or clients, our wholesale clients. But our project is that of reaching a 15% growth this year and a 10% growth next year. Now as to the second question on the nationality of our clients. Now our business is mainly a domestic business. So when you see the evolution of individual geographies. That is really, really similar to the performance by nationality of shoppers. And this still holds true for the first quarter of 2023.

Just a little clarification, if I may. So the first question on retail, are you able to comment versus 2019 level? Just so we get a cleaner comparison base to our numbers.

[Interpreted] Yes. Compared to 2019, the first quarter -- in first quarter, growth should be 65%, 6-5. And if we look at [indiscernible] if we do achieve plus 15% as per guidance, in the last 9 months, we would actually grow a bit slower than at the beginning of the year. However, Chris, let me tell you, it's really hard to compare to 2019 because too many things have changed. Last but not least, our size and the structure and the size of the luxury market in general. But however, this is the formal data we can release.

[Interpreted] The next question from Louise Singlehurst of Goldman Sachs,

Many congratulations on the performance for Q1. What a great start to the year. I had 2 questions, if I may. Firstly, just on -- I wonder if you can help us understand the customer mix. Obviously, there's a very powerful kind of cohort mix that's coming through in the business, but trying to think about the number of new customers joining for the first time to the brand versus an existing loyal customer base. And secondly, I wondered if you could just talk to us about pricing. I think in the past, you've talked about an 8% pricing increase that goes through for 2023. Is that globally? So is it the same across all the regions? And is the 8% correct for this year?

[Interpreted] Thank you very much. As for the customer mix you asked about, I believe that one of the distinct features of Casa Di Moda brand that of being able to combine a growing number of the existing customers, that means that loyal customers, which means that we are able to meet their expectations and the growth of new customers. This is probably due to the fact that we're still a young company that can still attract new customers around the world, but we are particularly proud of being able of combining highly loyal customers and increasing number of new customers that contributed to the growth of our customer base year-on-year. Then the price increase of 8% that you mentioned is that the price list increase that we implemented in 2023. You know that we set our prices twice a year, the time when collections are released. But we do not change our prices during the season. Let's say that they are offered to the top end of the market has actually implemented an even higher price increase than 8% that you mentioned. As for our pricing structure by region, it is true. This price has been -- I mean, the same price increase has been implemented in all geographies. So we have, let's say, geo pricing that is 100 in Europe, 124 in the Americas and 128 in Asia. This is what we define as a geo pricing that mirrors the additional costs that accounted for by transport costs or duties, custom duties and so on and so forth.

[Interpreted] There are no further questions.

[Interpreted] All right then. Thank you very much. We do thank you for your time, and for attending our conference call. And we -- and have a nice evening. Thank you very much, and goodbye.