Dive Brief:
- Ermenegildo Zegna Group reported Q3 revenue on Tuesday of 431.1 million euros, or approximately $457.3 million at current exchange rates, up 20.8% year over year. Revenue for the first nine months of the year rose 22.9% to 1.33 billion euros.
- The company, which owns the Zegna and Thom Browne brands, and is the exclusive licensee for the Tom Ford fashion business, said Q3 growth was driven by Zegna-branded products, with an especially strong DTC channel. DTC represented 64.8% of Zegna Group revenues for the first nine months of 2023, up from 59.4% last year.
- In North America, revenues for the quarter hit 111 million euros, up 44.2% year over year, and the U.S. accounted for 102 million euros of that, a 47.8% year-over-year uptick. The company said growth in the U.S. came “on the back of contributions from the newly-included Tom Ford Fashion segment as well as outstanding DTC performance for both ZEGNA and Thom Browne.”
Dive Insight:
The Zegna Group showed other luxury companies that there is still plenty of room for high end fashion growth. Its Q3 earnings boasted an especially strong showing in North America, a region that’s otherwise soft for companies including LVMH.
“Our results this quarter continue to showcase the broad-based strength of our three brands and the successful execution of our strategy,” Ermenegildo “Gildo” Zegna, chairman and CEO, said in the company’s release. “I am particularly pleased that we are performing well across a diverse set of regions, as the balance of our geographic mix provides resilience in a highly dynamic environment.”
Revenues in the EMEA region rose 27.7% year over year to 152 million euros in Q3, and totaled 475 million euros for the first nine months of 2023, a 25% increase. In Latin America, Q3 revenues rose 19.6% to 8.4 million euros, while revenues for the first nine months of 2023 rose 23.5% to 24 million euros.
Meanwhile, revenues in APAC rose 3.5% to 158 million euro for Q3, with revenues of 547 million euros for the first nine months, up 16% from last year.
The company said growth in Asia benefited from the conversion of 17 stores in South Korea “after the acquisition of the Thom Browne business there.” Additionally, the company announced it will take over its Zegna business from its franchise partner in South Korea and will begin directly operating that business there starting in the first quarter of 2024. This includes converting 15 existing Zegna stores to DTC, per the release.
“I am confident that the continued progress of the ZEGNA rebranding, including the full implementation of the One Brand strategy in China, the expansion opportunities for Thom Browne, and the integration and evolution of TOM FORD FASHION all provide valuable tailwinds despite the current global operating environment,” Zegna said.
In 2021, Zegna Group became the first Italian luxury brand to be listed on the New York Stock Exchange. The following year the group, formerly called Ermenegildo Zegna, rebranded and merged its Ermenegildo Zegna, Z Zegna, and Ermenegildo Zegna XXX brands into a single consolidated entity, called Zegna One Brand. In late 2022, the Zegna Group signed an agreement with Estée Lauder to become the long-term licensee for the Tom Ford fashion brand.
Zegna Group said that by the end of fiscal year 2025, it’s “aiming for annual revenues to exceed 2 billion euro,” excluding the Tom Ford Fashion segment.
