Ermenegildo Zegna grows by over 13% in the first quarter of 2023

By

Dominique Muret

Translated by
Cassidy STEPHENS

Published
Apr 22, 2023

Carrying on its momentum from last year, Ermenegildo Zegna Group has had a good start to the year. The Italian luxury group specialising in high-end men's clothing, listed on the New York Stock Exchange, posted 13.4% growth in the first quarter of 2023, with sales of 428.3 million euros. Both its flagship brand Zegna and its label Thom Browne recorded double-digit increases, with growth in all regions.

The group is doing well, despite the impact of the November 2022 takeover by Estée Lauder of Tom Ford, whose fashion business had been managed under licence by Ermenegildo Zegna since 2006. The cosmetics giant and the Italian company should come to a new agreement regarding this business in the coming weeks. If the Tom Ford activity had been accounted for in the group's first quarter results, its growth would have been 19.1%, the company said.

In a statement, CEO Gildo Zegna underlined "the encouraging recovery at the beginning of the year, driven by the reopening in China" and "the robust growth of our activities in the US and Europe, driven by our retail network". In the first three months of 2022, the group's sales recovered ground in Asia-Pacific, which accounts for almost half of Ermenegildo Zegna's total revenues, to 205.3 million euros (+17.4%). Notably, the Chinese market recovered strongly (+15.9%) to 164.5 million, while sales jumped by 31.9% in Japan.

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Europe showed solid growth, while the Middle East and Africa performed very well, bringing the EMEA region as a whole to 150.1 million euros (+11.6%). However, due to the Tom Ford transaction, sales in North America slowed down, increasing by only 6.2% to 65.6 million euros.

The CEO was particularly pleased with the success of his two brands and "the value of our vertically integrated Made in Italy Textile Luxury platform, which has enabled us to increase our manufacturing and production capacities." "The success of Zegna's rebranding has consolidated the brand as a leader in the luxury market, and in particular in what is now called quiet luxury," he added.

The Zegna brand, headed by Alessandro Sartori, recorded sales of 271.9 million euros (+21.4%) between January and March 2023, driven by the appeal of its high-end leisurewear and footwear, but also its made-to-measure business. Direct sales rose by 24.8% to 229.6 million.

The American label Thom Browne achieved 112.6 million euros (+21.4%) in the first quarter, 42.8 million of which are from its direct sales network (+25.4%). Just like last year, women's clothing and children's products recorded strong revenue growth, exceeding that of the men's products during the quarter. In addition, the Piedmontese group's textile business performed well, recording an increase of 11.8% to 33.8 million euros.