President and CEO of Ermenegildo Zegna Group on the evolution of the company and the expansion plans of Saudi Arabia
DUBAI: It has been a great year for the family business Ermenegildo Zegna Group. The Italian company announced last week that it had signed an agreement to enter into a long-term license for Tom Ford fashion with the Estee Lauder Companies.
The news came as Estee Lauder revealed its $2.8 billion acquisition of Tom Ford.
In December of last year, the company went public on the New York Stock Exchange with a market capitalization of $2.4 billion. The luxury menswear brand also rebranded significantly, adopting a singular name, Zegna, and a minimalist logo.
For the traditional brand, the future is just as important as maintaining its Italian roots.
And the group’s president and chief executive officer, Gildo Zegna, told Arab News about Zegna’s expansion plans for Saudi Arabia.
With the Middle East and Africa reporting recent quarterly growth of 86.4% year-over-year, the region is seen as a key market for the company.
Zegna said: “Our Dubai Mall store has become the benchmark for our business – 30 different nationalities shop there every day – it’s just amazing.”
With Dubai expecting 1 million visitors for the FIFA World Cup in Qatar, he anticipated it would be a profitable month.
And following a trip to Saudi Arabia, Zegna revealed that expansion plans for the Middle East were in full swing.
“It was a very exciting trip, I am surprised to see the resources that people are putting into the country, they want to invest in the future and modernity.
“The key is to be there with good partners that we have (Al-Malki Group), and I think we are going to have great locations and be very busy,” he added.
In 2023, Saudi Arabia will see the opening of two Zegna boutiques, with several more in the pipeline within the next three to five years in an even further expansion for the 112-year-old label.
It was in 1910 that Ermenegildo Zegna established Lanificio Zegna, a wool mill that made the finest textiles from natural fibers, in his hometown of Trivero, Italy.
The business grew into a luxury group that includes menswear, Thom Browne, acquired in 2018, and the one-of-a-kind Made in Italy luxury textile lab platform.
On December 20 of last year, Zegna rang the bell on the New York Stock Exchange, making history when the firm became the first Italian fashion brand to be listed there.
“Going public was probably the most important and difficult decision of my life: I was putting the company and the family at stake,” he said.
After much research and planning, the deal was made in agreement with Investindustrial Acquisition Corp., a special purpose acquisition corporation sponsored by investment subsidiaries of Investindustrial VII LP.
“I also think it was the best way to prepare the company for the next generation, with the right governance and resources,” Zegna added.
The founding family remains the main shareholder with a 62 percent stake. And this year’s financial records would seem to confirm that Zenga’s move was the right one.
For the third quarter of this year, the group posted revenue of 357 million euros ($366 million), 27.6% more than the previous year, bringing revenue for the first nine months of 2022 to 1.09 billion. of euros.
Prior to the initial public offering, the company rebranded itself by bringing all three clothing lines under one umbrella.
Zegna said: “We decided to consolidate and have a brand: Zegna.”
Brand equity has always been a major focus at Zegna, and the latest move has created a more streamlined identity for the label, much like its new logo featuring a double dash symbol.
Although known for its tailored suits made from premium fabrics, the brand has branched out into creating luxury leisurewear under the creative direction of Italian fashion designer Alessandro Sartori.
“Before the coronavirus pandemic hit, I called the executive committee to launch a new project that would shift Zegna’s perception from tailoring to luxury leisurewear; that was the beginning of a new era and probably one of the smartest decisions I ever made.” Zegna added.
By focusing on category management and creating iconic products like the triple knit sneaker and knitwear, Zegna has become more accessible to different age groups.
Referring to the overshirt and casual pants he wore for the interview with Arab News, the company boss said it was the new norm for Zegna and an approach that appealed to loyalists and the younger generation.
“It’s all about creating great products with a contemporary style in innovative fabrics,” he added.
With their bespoke service, everything from sneakers to knitwear, outerwear and suits can be customized in various materials and colours.
This year, Zegna also unveiled an exclusive partnership with Real Madrid as its Official Travelwear Partner, a move that capitalizes on soccer’s growing relationship with haute couture. Dior, Moncler and Off-White are some of the other big brands that have signed deals with major football clubs.
Footballers are ambassadors of influential brands. In the Zegna campaign, Real Madrid players are seen donning the brand’s signature overshirt and triple-stitched sneakers, highlighting their timeless yet contemporary approach to design.
Italian-made menswear aside, its textile division remains a global benchmark for luxury fabrics and one of the company’s most significant growth drivers.
Financial results for the third quarter showed that textile revenue reached $31 million, up 33.3% from the previous year. The firm continues to supply its textiles to some of the most premium high-end brands, including Gucci and Tom Ford.
With a vertically integrated supply chain, the brand has strong control over its suppliers. Last year, along with Prada, it acquired an Italian cashmere producer.
Zegna said: “Filati Biagioli Modesto is a company I bought with Mr. Bertelli from Prada to ensure we have a good supply of traceable cashmere which is becoming very scarce. From the sheep to the store, we are the only luxury company that is fully integrated.”
Elsewhere, from its Achill farm in New South Wales, Australia, the finest merino wool arrives, shipped to the firm’s Italian mills and then to stores.
He noted that through its supply chain, the company was stronger in terms of sustainability with traceable fiber.
Zegna noted that the company had always tried to give back to the environment, whether through its Oasi Zegna forest reserve in Italy or by recycling.
“Our #UseTheExisting project uses scraps of existing fibers and fabrics to minimize waste,” Zegna added.
Items from the eco collection can be purchased online and in store.