Featured Posts

To top
27 Oct

Zegna, Thom Browne Grow in Third Quarter Across Geographies, Channels



Solid growth across geographies and channels for each the Zegna and Thom Browne labels, particularly in Europe, the U.S. and the Middle East, boosted the Ermenegildo Zegna Group’s top line within the third quarter. And Gildo Zegna, chairman and chief executive officer, believes the Middle East “might be the brand new China.” During a conference call with analysts on Thursday to comment on the quarterly results, he said he was within the Middle East two weeks ago, visiting five countries in a number of days, which led him to a confident tackle the region. “We’re well-placed there and will probably be open stores with an aggressive five-year strategy. They’re all for what we do there,” he observed.

Within the three months ended Sept. 30, the group reported unaudited revenues of 357 million euros, up 27.5 percent year-over-year. Sales in the primary nine months of 2022 reached 1.09 billion euros, up 22.9 percent compared with the identical period in 2021.

The Zegna segment, which incorporates Zegna branded products in addition to the textile and third-party brands product lines, reported a 27.2 percent increase in sales within the quarter, reaching 289 million euros and showing an acceleration within the third quarter.

The Thom Browne label grew 29.5 percent within the quarter, reaching revenues of 69 million euros.

“This quarter was considered one of our strongest yet due to exceptional performance by each Zegna and Thom Browne in Europe, the Middle East, and the U.S., in addition to a rebound within the Greater China region,” said Gildo Zegna. “We achieved numerous milestones this quarter as we proceed to execute on our strategy and commitments while remaining true to the values which have guided us for 112 years.”

He highlighted the launch of Oasi Cashmere, “a big step on our road to traceability,” with the goal of one hundred pc of the cashmere utilized in this collection being fully traceable by 2024. He also underscored that Oasi Zegna  received this yr’s Biodiversity Conservation Award on the CNMI (Camera Nazionale della Moda Italiana) Sustainable Fashion Awards in September on the tail end of Milan Fashion Week.

Zegna also congratulated Thom Browne on his appointment as the following chairman of the Council of Fashion Designers of America, “a testament to his creativity, his incredible success, and his leadership in the style industry within the U.S. and around the globe.”

Also, Zegna’s artistic director Alessandro Sartori was named WWD’s 2022 Menswear Designer of the Yr “in recognition of his progressive vision that has taken the brand in recent directions.”

Within the quarter, Zegna products revenues grew 18.6 percent, reaching 224 million euros. The corporate attributed the strong performance to the success of the rebranding strategy presented at the top of last yr and fully launched in stores in early July, with a deal with luxury leisurewear. Zegna said knitwear is growing steadily and the footwear business “stays robust.”  Tailoring and made-to-measure have also seen a robust rebound within the quarter, particularly within the U.S. Zegna said that “the suit business is solid, although not yet to 2019 levels, but personalization is up.”

Through the call, the manager also highlighted the partnership with Real Madrid announced in August through which Zegna will develop into the official luxury travel wear partner for the successful football club. “It will introduce the brand to an entire recent generation of shoppers,” he said.

Thom Browne revenues grew 29.8 percent within the quarter compared with the identical period last yr, reaching 69 million euros. Womenswear continues to grow faster than menswear, now accounting for nearly 30 percent of the brand’s revenues. The namesake designer returned to Paris to indicate his spring 2023 collections.

 Growth across the brand is supported by strong wholesale demand, e-commerce growth through T-Mall within the Greater China Region, and 4 recent store openings through the quarter, bringing the overall of directly operated stores to 57 as of Sept. 30, 4 more units in comparison with the top of June.

Thom Browne CEO Rodrigo Bazan confirmed that the brand can have 62 directly operated stores by the top of the yr and that it was committed to its 2023 retail strategy that sees an expansion of its network of stores from 51 to 150 in five years, including franchised units and shops-in-shop. “We remain confident despite the volatility and we keep the penetration of clienteling,” said Bazan through the call.

The group’s textile revenues for the quarter reached 30 million euros, up 33.3 percent, with growth across Lanificio Ermenegildo Zegna, Bonotto, and Dondi. Tessitura Ubertino, which was consolidated as a part of the group in June 2021, in the primary nine months of 2022 contributed a further 3.9 million euros in revenues.

Third-party brands revenues grew 64.2 percent, reaching 32 million euros for the quarter due to strong contributions from Tom Ford and Gucci, the latter having greater than doubled compared to the third quarter of 2021.

At a bunch level, the Greater China Region has returned to growth for the quarter, showing a solid rebound in July and August before recent lockdowns began having a negative impact in September. Revenues in that region amounted to 116 million euros for the quarter, up 3 percent on the identical period last yr, following the easing of COVID-19-related restrictions across several cities in China. Chief financial officer Gianluca Tagliabue said through the call that the corporate was now assuming a negative performance in China within the fourth quarter of the yr, in comparison with a previous flattish forecast, resulting from the volatility and continued restrictions to curb the pandemic within the region, after “a really positive July and August” in China but a “soft” September. This results in an overall guidance of a 15 to 16 percent increase in group sales for the yr. “No person has a crystal ball and each week is different” in China, he said, responding to analysts.

The Asia Pacific region reported 13.7 percent growth for the quarter, with revenues reaching 153 million euros, boosted by the positive direct-to-consumer performance of each the Zegna and Thom Browne segments before the lockdowns in September in major Chinese cities, including Chengdu, Shenzhen, and Tianjin.

The Europe, Middle East and Africa region showed the strongest growth for the quarter, up 42.8 percent to 119 million euros in revenues. Of that, 16 million euros got here from the Middle East and Africa region, an 86.4 percent increase within the quarter. The U.K. also continued to grow, with revenues for the quarter up 61.6 percent to fifteen million euros.

Sales in North America climbed 38.6 percent and 33.2 percent in Latin America, to respectively 77 million euros and seven million euros within the quarter. Revenues within the U.S., an area of focus for the group, rose 38.3 percent to 69 million euros within the quarter. Within the U.S., ” the affluent customer remains to be traveling and spending and we he don’t expect the wholesale or retail channels to be affected,” said Zegna.

Retail revenues, including e-commerce, rose 20.7 percent within the quarter to 217 million euros. Of that, 180 million euros was from Zegna branded products and 37 million euros from Thom Browne – a growth of about 21 percent for each segments over last yr.

Wholesale revenues grew 32.2 percent within the quarter to 139 million euros, with Thom Browne showing particularly robust growth of 41 percent within the quarter to 33 million euros. Third-party brands and textile also grew at nearly 50 percent to 63 million euros.

Assuming no further macroeconomic deterioration, the group confirmed its full-year revenue guidance of mid-teens growth, anticipating solid improvement in its adjusted earnings before interest, taxes, depreciation and amortization, despite the step-up in marketing and central costs, and the unfavorable country mix. Marketing costs, along with capital expenditures are expected at 5 percent of full-year 2022 revenues.

The corporate also continues to expect a money surplus increase within the second half of the yr.

In May, at its first Capital Markets Day, the group announced its medium-term financial goals, aiming for revenues to exceed 2 billion euros and for adjusted operating profit to achieve a minimum of 15 percent of revenues.

Starting in Europe, in response to the continued energy crisis, Zegna launched a group-wide energy efficiency plan that’s targeting a ten percent reduction in energy consumption from 2021 levels by 2023 in non-industrial sites.

Zegna said that the group has increased its pricing within the high single digit for this season and for spring and that he had seen “no resistance. We are going to proceed in the identical direction no matter Forex to cover costs and protect our margins.”

Recommended Products

Beauty Tips
No Comments

Sorry, the comment form is closed at this time.