Zegna Group Experiences H1 Income Positive factors, Chairman Seeks Womenswear, Equipment Designer for Tom Ford Style

MILAN — “My household has been working the corporate for greater than a century, and we’re right here for a minimum of the identical,” mentioned Gildo Zegna, chairman and chief govt officer of the Ermenegildo Zegna Group. “Now we have all the time run it with a long-term imaginative and prescient and this won’t change. Our objective is to create a a lot stronger, extra world and extra diversified luxurious enterprise.”

Certainly, the chief on Thursday mapped out his ambitions for the group as he commented on its unaudited first half revenues throughout a convention name with analysts. Within the six months ended June 30, gross sales rose 6.3 p.c to 960.1 million euros in contrast with 903.1 million euros in the identical interval final 12 months, boosted by sturdy enterprise within the U.S. and within the Europe, Center East and Africa area, and brisk direct-to-consumer gross sales. In natural phrases, gross sales have been down 2.7 p.c. Within the second quarter, group revenues rose 4.7 p.c to 497 million euros.

As was to be anticipated, analysts requested Zegna about the way forward for Tom Ford Style following the sudden departure of artistic director Peter Hawkings on Monday. Whereas demurring from offering causes for the exit, Zegna mentioned the intention is “to make the model extra world, doubling down on girls’s and day put on, and to construct up its leather-based items proposition absolutely.”

For that reason, the successor will must be a designer with a robust experience and know-how in these classes, he added, with out revealing the title of any potential candidates. He mentioned that his perception within the potential strengthening of these companies was a key cause for taking over Ford’s vogue as a part of the Estée Lauder Cos. deal in 2022, which valued the wonder and vogue model at $2.8 billion.

One analyst requested if there was a threat of alienating loyal prospects of the model since Hawkings, who had been chosen by Ford himself, had been working with the namesake designer for 25 years, however Zegna waved these considerations away. He thanked Hawkings for the work carried out within the preliminary part of the launch of Tom Ford Style and expressed confidence within the model’s CEO, Lelio Gavazza, and his “stable lead. I’m very assured we are going to ship in the long run.”

He mentioned the model opened a brand new retailer in Taormina, Italy, “that’s performing forward of expectations,” and a brand new unit additionally simply opened in Rome, one on the Hangzhou Tower, and a flagship in Beijing China World.

Trying forward, he mentioned he stays “absolutely assured within the technique we have now put in place and the trajectory we’re on. Our group is a custodian of three genuine manufacturers, every with unexplored long-term progress potential. All of us acknowledge that 2024 will stay difficult, which is why we have now been engaged on value management initiatives throughout the group.” That mentioned, he added it was key to proceed to spend money on the manufacturers, aiming to “perceive the place there’s optimistic volatility and be there, and defend ourselves when there’s damaging volatility.”

Within the first half, gross sales of the Zegna model, designed by creative director Alessandro Sartori, rose 4.6 p.c to 566.1 million euros pushed by ongoing sturdy progress within the U.S. and EMEA. Natural efficiency within the Better China area remained consistent with the primary quarter of 2024: single-digit damaging.

Nevertheless, Zegna mentioned he was “extra optimistic than damaging about China for 2025,” and touted the “extraordinarily optimistic expertise with Villa Zegna” in Might in Shanghai, named after the house of the namesake founding father of the group within the Piedmont Alps, which was recreated in China “to clarify the genuine legacy of Zegna, interacting with prospects and fostering emotional connections to the model.”

He mentioned that this activation “confirmed, as soon as extra, that the model is robust in China, and perceived as a number one timeless luxurious menswear model.”

He revealed that the group will transfer Villa Zegna to New York to inform the story of his grandfather, who in 1938 traveled to town on an ocean linear “to satisfy with the most effective American tailors making Zegna materials recognized throughout the U.S.”

Chief monetary officer Gianluca Tagliabue mentioned nearly all of demand in China comes from native prospects and that solely 10 p.c of the Chinese language cluster retailers Zegna group merchandise exterior of China.

Within the first half, revenues of the Thom Browne model decreased 19.4 p.c to 166.7 million euros, reflecting the continued streamlining of its wholesale enterprise, and solely partially counterbalanced by enhancing DTC efficiency. The model continued to report sturdy ends in Japan, which have been offset by a decline in Better China CR, EMEA and the Americas.

Zegna mentioned that with the model’s CEO Rodrigo Bazan, we’re “taking sturdy motion, ranging from the deep wholesale rationalization to a radical evaluate of the group. Whenever you develop quick, generally you won’t have a balanced group.” He mentioned that they’re working “on up-skilling the gross sales group, and enhance our merchandising supply particularly in China, and on reinforcing the administration in key roles.” He added that enterprise in Korea is “implausible” for Thom Browne, whereas there’s “work to do in Japan.”

Because the consolidation of Tom Ford Worldwide LLC and its subsidiaries occurred on April 29, 2023, the group highlighted solely the natural efficiency, which compares the revenues of the 2 months through which the model was consolidated in 2023 and 2024.

Within the first half, revenues for the Tom Ford Style phase amounted to 148.5 million euros, a 4.7 p.c natural progress pushed by a superb efficiency in DTC and the U.S.

As a bunch, gross sales within the Europe, Center East and Africa area registered revenues of 336.6 million euros, up 4.3 p.c, accounting for 35 p.c of the overall, boosted by a robust enterprise of the Zegna model, offsetting a wholesale slowdown at Thom Browne.

Revenues within the Americas amounted to 246 million euros, climbing 29.4 p.c and representing 26 p.c of group gross sales, with double-digit progress from Zegna and a stable efficiency from Tom Ford Style.

The Better China area recorded revenues of 266.3 million euros, a decline of 13.2 p.c and accounting for 28 p.c of group gross sales, impacted by a still-subdued shopper confidence, with Zegna persevering with to outperform within the area.

Revenues in the remainder of Asia Pacific spiked 33.8 p.c to 110 million euros, pushed by the sturdy double-digit natural efficiency within the Japanese market offset by the efficiency of the opposite markets within the area.

Requested about present buying and selling, Tagliabue mentioned retail gross sales in June and July have been “consistent with the respective common per quarter,” and that there was “no main shift,” besides maybe “extra softness in Hong Kong and Macao.”

Within the first half, DTC revenues elevated 14.8 p.c to 669.6 million euros. Zegna’s DTC revenues drove the group’s efficiency, rising by 4.5 p.c to 486.5 million euros because of the stable efficiency within the Americas and EMEA.

On the finish of June, Zegna counted 279 instantly operated shops. Underscoring an elevated shift from wholesale to retail for the group’s manufacturers, Gildo Zegna ticked off various openings earmarked for the second half of the 12 months for the Zegna model in Monte Carlo in September; in New York’s Meatpacking District; at Harry Rosen; in Wuhan; at Ala Moana in December; in Riyadh, and one concession at Lane Crawford.

Thom Browne DTC revenues rose 8.5 p.c to 90 million euros. Excluding the impact of the acquisition of the Thom Browne enterprise in South Korea (beforehand accounted within the wholesale channel), DTC revenues declined by 12.8 p.c natural, dented by a difficult Better China. On the finish of June, Thom Browne counted 102 instantly operated shops, together with 13 new small concession shops at Nordstrom and one retailer in Beijing WF Central. Within the second half, the model will open on Melrose Avenue in Los Angeles and in Palm Seaside, Fla., Holt Renfrew and Nordstrom, Zegna mentioned.

Tom Ford Style’s DTC revenues jumped to 93.1 million euros, from 34.7 million euros with 56 DOS on the finish of June, together with two web openings within the second quarter. Along with Taormina and Rome, new shops will open in in Singapore at Paragon, a concession at Harrods, on the 4 Seasons in Madrid and in Saint Moritz.

Within the first half, group wholesale revenues decreased 7.5 p.c to 211.7 million euros in comparison with 228.9 million euros final 12 months.

Zegna wholesale revenues rose 5.2 p.c to 79.5 million euros, primarily pushed by completely different timing in deliveries.

Thom Browne wholesale revenues fell 38.1 p.c to 76.7 million euros reflecting the choice to streamline the model’s wholesale enterprise.

Tom Ford Style wholesale revenues climbed to 55.4 million euros from 29.2 million euros.