Ermenegildo Zegna grows by 8% in the first quarter

Ermenegildo Zegna Group continues to grow at the beginning of the year, but at a slower pace. The Italian company, specialized in luxury men’s clothing, recorded a turnover of €463.2 million in the first quarter of 2023, an increase of 8.1% (+10.7% at constant exchange rates). These results were mainly driven by strong performance in the United States and in its direct sales channel, while the Piedmont-based group, which is listed on the New York Stock Exchange, like most of its competitors, was severely punished by the slowdown in the China. In particular, the Thom Browne brand.

“Ending the first quarter of 2024 with double-digit growth at constant exchange rates is a positive sign given the challenges facing the sector. Our growth in America – also in double digits – and the continued success of our Zegna One Brand strategy, confirm that we are moving in the right direction,” CEO Gildo Zegna said in a statement.

In the American market, which accounts for a quarter of turnover, the Italian group saw its turnover increase by 57.7% to 114.2 million euros between January and March 2024. In Europe, which accounts for 34% of total turnover, they increased by 57.7% to 114.2 million euros. only 4.3% compared to the same period in 2023, and are even down 6.5% in terms of organic growth, “reflecting a negative performance from Thom Browne.” The US label’s decline is particularly noticeable in Italy – which accounts for around 40% of the region’s sales – which is underperforming.

In the Asia Pacific region (excluding China), sales increased by 28.7%, “mainly due to the strong performance of the Japanese market and the conversion of the Korean monobrand stores of Thom Browne and Zegna from a wholesale to a retail format” , the company said. , which, on the other hand, recorded a significant decline in the Chinese market. In this country, which accounts for 30% of the group’s total turnover, turnover for the first three months of the year fell by 15.3% to 139.4 million euros (-13.1% based on organic growth).

In the first quarter, Zegna, the flagship brand of the group led by designer Alessandro Sartori, recorded a turnover of 282.9 million euros (+4%) between January and March 2024, compared to an increase of more than 20% a year earlier. It continues to grow, albeit at a much slower pace, “thanks to healthy growth in key categories, particularly footwear and casual wear,” the group notes, highlighting double-digit increases in Europe, America and Japan, while Zegna’s turnover in 2011 decreased. Greater China.

The American label Thom Browne is in serious decline

Thom Browne, for its part, saw its turnover fall to €79.2 million in the first quarter of 2024, a decline of 29.6% compared to the same period a year earlier. While the brand continues to perform well in Japan, it is particularly depressed in Greater China and Europe, where it has decided to downsize and rationalize its multi-brand distribution network to support direct sales. In the first quarter, Thom Browne’s wholesale turnover almost halved, from €69.7 million in the first quarter of 2023 to €34.5 million a year later, while it rose by 4.4% in its own stores.

The fashion arm of the American label Tom Ford, which has been part of the Ermenegildo Zegna group for just over a year, recorded a turnover of €65 million in the first three months of the year, “reflecting good performance, especially in the United States.” “I am confident in the decisions we are making to accelerate direct control of our businesses, especially Thom Browne and Tom Ford Fashion. We have also strengthened our team with new talent and leadership at all levels, because we know how our people are essential to achieve our objectives,” concluded Gildo Zegna.