President, CEO of the Ermenegildo Zegna Group on company evolution, Saudi expansion plans
DUBAI: It was an important year for the Ermenegildo Zegna Group family business. Last week the Italian company announced that it had signed an agreement to enter into a long-term license for Tom Ford fashion with Estee Lauder Companies.
The news came as Estee Lauder revealed its acquisition of Tom Ford for $2.8 billion.
In December last year, the company was listed on the New York Stock Exchange with a market capitalization of $2.4 billion. The luxury menswear brand has also been significantly rebranded, adopting a singular name, Zegna, and a minimalist logo.
For the historic brand, the future is as important as maintaining its Italian roots.
And the president and CEO of the group, Gildo Zegna, told Arab News of Zegna’s expansion plans for Saudi Arabia.
With the Middle East and Africa recently reporting 86.4% year-over-year quarterly growth, the region is seen as a key market for the company.
Zegna said: “Our store in the Dubai Mall has become the hub for our business – 30 different nationalities shop there every day – it’s just incredible.”
With Dubai expecting 1 million visitors to the FIFA World Cup in Qatar, he predicted it would be a profitable month.
And after a trip to Saudi Arabia, Zegna revealed that expansion plans for the Middle East were in full swing.
“It has been a very emotional journey – I am amazed to see the resources people are putting into the country – they want to invest in the future and in modernity.
“The key is to be there with good partners that we have (Al-Malki Group), and I think we will have great locations and be super busy,” he added.
In 2023, Saudi Arabia will see two Zegna boutiques open, with many more in the pipeline within the next three to five years in a further expansion for the 112-year-old label.
It was 1910 when Ermenegildo Zegna founded Lanificio Zegna, a woolen mill that produced the finest fabrics with natural fibers, in his hometown of Trivero, Italy.
The company has grown into a luxury group including menswear, Thom Browne, acquired in 2018, and a one-of-a-kind Made in Italy luxury textile laboratory platform.
On December 20 last year, Zegna rang the bell on the New York Stock Exchange, making history as the company became the first Italian fashion brand to list there.
“Going public was probably the biggest and hardest decision of my life. I was putting business and family on the line,” she said.
After much research and planning, the deal went ahead in agreement with Investindustrial Acquisition Corp., a special purpose acquisition company sponsored by the investment subsidiaries of Investindustrial VII LP
“I also think it was the best way to prepare the company for the next generation, with the right governance and resources,” Zegna added.
The founding family remains the main shareholder with a 62% stake. And this year’s balance sheets would seem to confirm that Zenga’s move was the right one.
For the third quarter of this year, the group reported revenues of 357 million euros ($366 million), up 27.6% year-on-year, bringing revenues for the first nine months of 2022 to 1, 09 billion euros.
Prior to the initial public offering, the company rebranded itself by putting all three clothing lines under one umbrella.
Zegna said: “We decided to consolidate and have one brand: Zegna.”
Brand equity has always been in Zegna’s focus and the latest move has created a more streamlined identity for the label, as well as its new logo with a double stripe signifier.
While known for its tailored suits with high-quality fabrics, the brand branched out into creating luxury leisurewear under the creative direction of Italian fashion designer Alessandro Sartori.
“Before the coronavirus pandemic hit, I called the executive committee to launch a new project that changed the perception of Zegna from tailoring to luxury leisurewear: that was the beginning of a new era and probably One of the smartest decisions I’ve made.” Zegna added.
By focusing on category management and creating iconic products such as triple-stitch sneakers and knitwear, Zegna has become more accessible to different age groups.
Referring to the overshirt and casual trousers he wore for the Arab News interview, the company boss said it was the new Zegna norm and an approach that appealed to loyalists and the younger generation.
“It’s about creating excellent products with a contemporary style in innovative fabrics,” he added.
With its bespoke service, everything can be personalized, from sneakers to knitwear, from outerwear to dresses, in various materials and colours.
This year, Zegna also unveiled an exclusive partnership with Real Madrid as its official travel apparel partner, a move that capitalizes on football’s growing relationship with high fashion. Dior, Moncler and Off-White are some of the other big brands that have signed deals with major football clubs.
Footballers are influential brand ambassadors. In Zegna’s campaign, Real Madrid players are seen wearing the brand’s iconic jersey and triple-stitched sneakers, highlighting its timeless yet contemporary approach to design.
Aside from Made in Italy menswear, its textile division remains a global benchmark for luxury fabrics and one of the company’s most significant growth drivers.
Third-quarter financial results showed that textile revenues reached $31 million, an increase of 33.3% year on year. The company continues to supply its fabrics to some of the most exclusive high-end brands, including Gucci and Tom Ford.
With a vertically integrated supply chain, the brand has strong control over its suppliers. Last year, together with Prada, it acquired an Italian cashmere producer.
Zegna said: “Filati Biagioli Modesto is a company that I bought with Mr. Bertelli of Prada to make sure we have a good supply of traceable cashmere which is becoming very scarce. From sheep to store, we are the only fully integrated luxury company”.
Elsewhere, from its Achill farm in New South Wales, Australia comes the finest merino wool, shipped to the company’s Italian factories and then to the stores.
He pointed out that across its supply chain, the company has been stronger in terms of sustainability with traceable fiber.
Zegna noted that the company has always sought to give back to the environment, whether through its Oasi Zegna forest reserve in Italy or through upcycling.
“Our #UseTheExisting project utilizes leftover existing fibers and fabrics to minimize waste,” Zegna added.
Items from the eco-conscious collection can be purchased online and in-store.