Luxury fashion powerhouse Zegna traverses Alpine fibers to New York hardwoods, shaping the fabric of future elegance
Zegna Group: Navigating the Future of Luxury Fashion
After 115 years, the Zegna family's unwavering commitment to the artistry of tailoring continues to guide their decisions. This dedication has steered the group through various challenges and opportunities, as they strive to maintain their position as a leader in the luxury fashion industry.
In the past fiscal year, the group's net profit dipped to 90.9 million euros, attributed to a higher tax burden, investments in talent, and store openings. However, strategic moves such as the acquisitions of Thom Browne and Tom Ford have strengthened the group's presence in the United States.
Currently, Alessandro Sartori serves as the creative director of Zegna, overseeing the brand's evolution. The first collections under Peter Hawkings have not only met, but surpassed expectations for leather goods sales, positioning the brand to reach 600 million euros in turnover in the medium term.
The acquisition of Thom Browne in 2018 for $500 million marked a significant milestone for the group. Thom Browne's avant-garde aesthetic, with its shortened suits and gray skirts, has added a unique flair to the Zegna group's offerings. Despite a 17% drop in sales due to the rationalization of the wholesale channel, the brand continues to contribute to the group's growth.
The Zegna group is increasingly being seen as a natural buyer for mid-sized brands seeking a long-term partner, thanks to its blend of aesthetic codes and industrial discipline. The group's focus on sustainability is also a key factor, with plans to modernize yarns and develop techniques to reduce water consumption by an additional 15% by 2028.
In April 2023, the US cosmetics company EstΓ©e Lauder granted Zegna the worldwide license for fashion and accessories for Tom Ford for twenty years, further solidifying the group's position in the luxury market.
However, challenges remain. China continues to be under pressure, and the firm acknowledges the need for new narratives to cater to the evolving Asian customer. Competition comes from Italian firms like Loro Piana and Brunello Cucinelli, French powerhouse Kering, and native digital firms in New York.
Despite these challenges, the Zegna group is investing heavily in its future. A planned capital investment of 125 million euros will strengthen the supply chain and build a new shoe factory in Parma, Italy. The agreement with EstΓ©e Lauder allows the Piedmontese house to operate Tom Ford Fashion with full creative and commercial autonomy, ensuring that every stitch that leaves the mill continues to set the pace for Italian luxury.
