Dive Brief:
- Ermenegildo Zegna Group said it expects to grow Tom Ford Fashion revenues by “over 10% compounded annual growth rate in the medium term” when it hosted its second Capital Markets Day at the New York Stock Exchange on Tuesday, according to a release sent to Fashion Dive.
- Zegna Group said in the release that it planned for an overall medium term financial outlook, with a company-wide compounded average annual revenue growth of more than 10%, plus a strong cash surplus beginning in FY23.
- For its Thom Browne brand, the company said it anticipates a “high teens compounded average growth in DTC revenues” over the next few years alongside “a streamlined wholesale distribution.”
Dive Insight:
Zegna Group has had a strong year, bucking the downward luxury market trend with Q3 revenues up more than 20%. That and strong DTC sales, which represented 64.8% of Zegna Group revenues for the first nine months of 2023, have helped buoy the company toward its stated goal of exceeding 2 billion euros in revenue, or approximately $2.2 billion, by the end of fiscal year 2025, excluding its Tom Ford Fashion segment.
Adding in the Tom Ford Fashion numbers will likely increase that amount. The company said in its Capital Markets Day release that its anticipated revenue growth at the brand will stem from “capitalizing on the potential of the brand, whose strength today is much larger than its business.” It added that it plans to leverage “Group synergies to fuel its growth.”
“Almost two years ago, we stood in this same historic place to ring the Opening Bell and begin our life as a public company as the very first Italian luxury fashion company to be listed on the New York Stock Exchange,” Ermenegildo “Gildo” Zegna, chairman and CEO, said in the release.
He said that the company’s current financial outlook exceeded his initial projections following the company’s NYSE listing.
“Our financial performance today paints a very clear picture: we are a stronger, more thriving company than ever before — we achieved these results while strengthening our brands, and this despite the challenging geopolitical and macroeconomic conditions over the past two years,” Zegna said.
Late last year, the Zegna Group signed an agreement with Estée Lauder to become the long-term licensee for the Tom Ford fashion brand. From the end of April, which marked the beginning of the consolidation of Tom Ford International LLC into the Group’s financial statements, to September 30, the segment reported revenues of 139 million euros, with 75 million euros in Q3 alone.
Newly appointed creative director Peter Hawkings showed his first collection for Tom Ford during the spring-summer shows during Milan Fashion Week in September, and consumer response to that collection is expected to show up in Zegna’s 2024 earnings.
