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Zegna Group Reports H1 Sales Gains, Seeking Womenswear, Accessories Designer for Tom Ford Fashion
Luisa Zargani
8 min read
MILAN — “My family has been running the company for more than a century, and we are here for at least the same,” said Gildo Zegna, chairman and chief executive officer of the Ermenegildo Zegna Group. “We have always run it with a long-term vision and this will not change. Our goal is to create a much stronger, more global and more diversified luxury business.”
Indeed, the executive on Thursday mapped out his ambitions for the group as he commented on its unaudited first half revenues during a conference call with analysts. In the six months ended June 30, sales rose 6.3 percent to 960.1 million euros compared with 903.1 million euros in the same period last year, boosted by strong business in the U.S. and in the Europe, Middle East and Africa region, and brisk direct-to-consumer sales. In organic terms, sales were down 2.7 percent. In the second quarter, group revenues rose 4.7 percent to 497 million euros.
As was to be expected, analysts asked Zegna about the future of Tom Ford Fashion following the sudden departure of creative director Peter Hawkings on Monday. While demurring from providing reasons for the exit, Zegna said the aim is “to make the brand more global, doubling down on women’s and day wear, and to build up its leather goods proposition fully.”
For this reason, the successor will need to be a designer with a strong expertise and know-how in those categories, he added, without revealing the name of any potential candidates. He said that his belief in the potential strengthening of those businesses was a key reason for taking on Ford’s fashion as part of the Estée Lauder Cos. deal in 2022, which valued the beauty and fashion brand at $2.8 billion.
One analyst asked if there was a risk of alienating loyal customers of the brand since Hawkings, who had been chosen by Ford himself, had been working with the namesake designer for 25 years, but Zegna waved those concerns away. He thanked Hawkings for the work done in the initial phase of the launch of Tom Ford Fashion and expressed confidence in the brand’s CEO, Lelio Gavazza, and his “solid lead. I am very confident we will deliver in the long term.”
He said the brand opened a new store in Taormina, Italy, “that is performing ahead of expectations,” and a new unit also just opened in Rome, one at the Hangzhou Tower, and a flagship in Beijing China World.
Backstage at Tom Ford fall 2024 at Milan Fashion Week.
Looking ahead, he said he remains “fully confident in the strategy we have put in place and the trajectory we are on. Our group is a custodian of three authentic brands, each with unexplored long-term growth potential. We all recognize that 2024 will remain challenging, which is why we have been working on cost control initiatives across the group.” That said, he added it was key to continue to invest in the brands, aiming to “understand where there is positive volatility and be there, and defend ourselves when there is negative volatility.”
In the first half, sales of the Zegna brand, designed by artistic director Alessandro Sartori, rose 4.6 percent to 566.1 million euros driven by ongoing robust growth in the U.S. and EMEA. Organic performance in the Greater China region remained in line with the first quarter of 2024: single-digit negative.
However, Zegna said he was “more positive than negative about China for 2025,” and touted the “extremely positive experience with Villa Zegna” in May in Shanghai, named after the home of the namesake founder of the group in the Piedmont Alps, which was recreated in China “to explain the authentic legacy of Zegna, interacting with customers and fostering emotional connections to the brand.”
He said that this activation “confirmed, once more, that the brand is strong in China, and perceived as a leading timeless luxury menswear brand.”
Mads Mikkelsen in Zegna men’s spring 2025
He revealed that the group will move Villa Zegna to New York to tell the story of his grandfather, who in 1938 traveled to the city on an ocean linear “to meet with the best American tailors making Zegna fabrics known across the U.S.”
Chief financial officer Gianluca Tagliabue said the majority of demand in China comes from local customers and that only 10 percent of the Chinese cluster shops Zegna group products outside of China.
In the first half, revenues of the Thom Browne brand decreased 19.4 percent to 166.7 million euros, reflecting the ongoing streamlining of its wholesale business, and only partially counterbalanced by improving DTC performance. The brand continued to record strong results in Japan, which were offset by a decline in Greater China CR, EMEA and the Americas.
Zegna said that with the brand’s CEO Rodrigo Bazan, we are “taking strong action, starting from the deep wholesale rationalization to a thorough review of the organization. When you grow fast, sometimes you might not have a balanced organization.” He said that they are working “on up-skilling the sales team, and improve our merchandising offer in particular in China, and on reinforcing the management in key roles.” He added that business in Korea is “fantastic” for Thom Browne, while there is “work to do in Japan.”
Thom Browne fall couture 2024 at Paris Couture Week.
Since the consolidation of Tom Ford International LLC and its subsidiaries occurred on April 29, 2023, the group highlighted only the organic performance, which compares the revenues of the two months in which the brand was consolidated in 2023 and 2024.
In the first half, revenues for the Tom Ford Fashion segment amounted to 148.5 million euros, a 4.7 percent organic growth driven by a good performance in DTC and the U.S.
As a group, sales in the Europe, Middle East and Africa region registered revenues of 336.6 million euros, up 4.3 percent, accounting for 35 percent of the total, boosted by a strong business of the Zegna brand, offsetting a wholesale slowdown at Thom Browne.
Revenues in the Americas amounted to 246 million euros, climbing 29.4 percent and representing 26 percent of group sales, with double-digit growth from Zegna and a solid performance from Tom Ford Fashion.
The Greater China region recorded revenues of 266.3 million euros, a decline of 13.2 percent and accounting for 28 percent of group sales, impacted by a still-subdued consumer confidence, with Zegna continuing to outperform in the region.
Revenues in the rest of Asia Pacific spiked 33.8 percent to 110 million euros, driven by the strong double-digit organic performance in the Japanese market offset by the performance of the other markets in the region.
Asked about current trading, Tagliabue said retail sales in June and July were “in line with the respective average per quarter,” and that there was “no major shift,” except perhaps “more softness in Hong Kong and Macao.”
In the first half, DTC revenues increased 14.8 percent to 669.6 million euros. Zegna’s DTC revenues drove the group’s performance, increasing by 4.5 percent to 486.5 million euros thanks to the solid performance in the Americas and EMEA.
At the end of June, Zegna counted 279 directly operated stores. Underscoring an increased shift from wholesale to retail for the group’s brands, Gildo Zegna ticked off a number of openings earmarked for the second half of the year for the Zegna brand in Monte Carlo in September; in New York’s Meatpacking District; at Harry Rosen; in Wuhan; at Ala Moana in December; in Riyadh, and one concession at Lane Crawford.
Thom Browne DTC revenues rose 8.5 percent to 90 million euros. Excluding the effect of the acquisition of the Thom Browne business in South Korea (previously accounted in the wholesale channel), DTC revenues declined by 12.8 percent organic, dented by a challenging Greater China. At the end of June, Thom Browne counted 102 directly operated stores, including 13 new small concession stores at Nordstrom and one store in Beijing WF Central. In the second half, the brand will open on Melrose Avenue in Los Angeles and in Palm Beach, Fla., Holt Renfrew and Nordstrom, Zegna said.
Tom Ford Fashion’s DTC revenues jumped to 93.1 million euros, from 34.7 million euros with 56 DOS at the end of June, including two net openings in the second quarter. In addition to Taormina and Rome, new stores will open in in Singapore at Paragon, a concession at Harrods, at the Four Seasons in Madrid and in Saint Moritz.
In the first half, group wholesale revenues decreased 7.5 percent to 211.7 million euros compared to 228.9 million euros last year.
Zegna wholesale revenues rose 5.2 percent to 79.5 million euros, mainly driven by different timing in deliveries.
Thom Browne wholesale revenues fell 38.1 percent to 76.7 million euros reflecting the decision to streamline the brand’s wholesale business.
Tom Ford Fashion wholesale revenues climbed to 55.4 million euros from 29.2 million euros.
