MILAN — The Ermenegildo Zegna Group closed 2022 on an upbeat note, seeing “an encouraging and really exciting start of 2023,” to a level that was even “well above our expectations,” said chairman and chief executive officer Gildo Zegna on Thursday, commenting the performance of the group last 12 months.

The group is seeing “a solid double-digit growth at retail for each Zegna and Thom Browne,” continued the chief during a call with analysts, expressing his optimism for the reopening of Greater China, after pandemic restrictions, and the strong response of European and American customers which can be driving growth. Zegna’s made to measure is showing a double digit growth compared with 2019, which already “was a top 12 months,” he noted.

The outlook led Zegna to set a date to achieve 2 billion euros in sales — the tip of fiscal 2025 — a goal first expressed through the group’s Capital Markets Day last May. The 12 months 2023 will “comfortably” support the expansion trajectory of the corporate, he said, also expecting an operating profit margin of 15 percent by the tip of 2025.

These projections exclude the Tom Ford fashion business and bar an additional escalation of the war in Ukraine, significant macroeconomic or financial markets deterioration, and further disruption linked to the COVID-19 pandemic.

Analysts were left wondering in regards to the way forward for the Tom Ford fashion business with the Estée Lauder Cos., as Zegna said he would find a way to share more details about plans “for this exceptional brand,” after the closing “a couple of weeks away,” almost certainly within the second quarter of this 12 months.

As reported in November, The Estée Lauder Cos. is acquiring the Tom Ford brand in a transaction valuing the brand at $2.8 billion. As a part of the deal, the Zegna Group is entering a long-term license agreement to develop the Tom Ford fashion categories. Zegna has had the license for Tom Ford menswear since around 2006.

Within the 12 months ended Dec. 31, group profits amounted to 65.3 million euros compared with a lack of 127.7 million euros in 2021, but this was mainly attributed to the prices incurred that 12 months in reference to the business combination with Investindustrial Acquisition Corp., accomplished in December 2021, and the IPO on the Recent York Stock Exchange that month. Profit for 2022 was also impacted by higher net financial charges and better taxes.

Last 12 months, adjusted operating profit rose 6 percent to 157.7 million euros compared with 149.1 million euros in 2021, consistent with the “moderate improvement” guidance the group communicated on Jan. 25.

Confirming preliminary figures released that day, group revenues amounted to 1.49 billion euros, up 15.5 percent compared with 1.29 billion euros in 2021.

Excluding the Greater China region, which was affected by the COVID-19-related restrictions last 12 months, particularly from mid-March to the tip of May and nonetheless within the fourth quarter, sales were up 42 percent 12 months on 2021.

Revenues of the Zegna segment were up 14 percent to 1.17 billion euros compared with 1.03 billion euros. Sales of the Thom Browne segment were up 25 percent to 330.9 million euros compared with 264 million euros.

Adjusted operating profit for the Zegna segment rose 7 percent to 141.5 million euros, and was up 26 percent to 48.1 million euros at Thom Browne.

Zegna acknowledged “that current financial uncertainties and an ever-changing global environment have the potential to affect consumer attitudes and buying patterns,” remaining focused on the execution of the group’s strategies. The goal is to further strengthen its “market-leading position” and the group’s Made in Italy manufacturing platform, expanding into footwear and clothing. He revealed the corporate is planning 300 recent hires within the medium term and has launched the training school Accademia dei Mestieri.

“We’ve pushed to turn out to be sophisticated retailers and we’re seeing excellent results, we’re extremely pleased. We would like to maintain this up, ensure we’re on top and we don’t see a reason why this could decelerate within the 12 months,” Zegna said.

The manager touted the success of the rebranding of the Zegna collections, the acceleration of the clienteling strategies, renaming the buyer app Zegna X, to be presented in a couple of days under this recent moniker, and which already generated 35 percent of retail revenues in 2022. He cited recent collaborations reminiscent of the one with the Los Angeles-based brand The Elder Statesman, which help to amplify the brand message.

Thom Browne CEO Rodrigo Bazan spoke of the retail expansion of the brand, with the addition of 11 directly operated stores, which now total 63. He said Thom Browne will further capitalize its direct-to-consumer network with the total integration of the South Korean market through the second half of 2023 and “is well positioned to completely capitalize on the Greater China region” reopening this 12 months.

The Japanese market specifically performed thoroughly last 12 months and represents a solid base to speed up growth in 2023 for the brand, observed Bazan.

Thom Browne will have fun 20 years in business “with celebrations around the globe” starting in December.

Asked by one analyst if the group was seeing a slowdown within the U.S., as a few of its peers, chief financial officer Gianluca Tagliabue responded within the negative, reporting “a solid performance in all places in the primary quarter, also within the U.S.,” and within the region “in retail mostly for Zegna.”

Higher investments are expected in 2023 to expand the Thom Browne retail footprint, and Tagliabue said “there are actually opportunities to expand the Zegna retail perimeter after the rationalization that took place last 12 months. We now see an expansion in North America, Europe and China and a tactical growth.”

Investments can even be directed into the availability chain, to proceed to expand the group’s internal capability in some product lines and to further drive IT in digitalization, he said. “Knitwear is an important entry door to the Zegna brand, as are overshirts, that are a sexy hook for brand spanking new clients,” he offered.

The recipient of the WWD Menswear Designer of the 12 months award, artistic director Alessandro Sartori was acknowledged for leading a serious stylistic shift and business success of the Zegna brand.

The corporate can be expanding in markets including Saudi Arabia, Central Asia, South East Asia and India.

As of Dec. 31, the group’s money surplus amounted to 122.2 million euros, down 16 percent from 144.8 million euros at the tip of December 2021. The decrease was attributed mainly to a dividend pay-out of 26 million euros; 73.3 million euros of capital expenditure, totally on the shop network; 41.3 million euros increase in trade working capital, and roughly 33 million euros in non-recurring real estate settlements.

The corporate plans to pay a dividend of roughly 25 million euros this 12 months.

Zegna also underscored the group’s sustainability initiatives, submitting its net-zero targets to the Science-Based Goal initiative (SBTi), launching the Oasi Cashmere collection, with a commitment that every one cashmere utilized in the gathering will likely be fully traceable by 2024, and embracing the Re.Crea Consortium to administer products at end-of-life, in partnership with Camera Nazionale della Moda Italiana and other Italian luxury brands.