Zegna Group nine-month sales rise 7.2% to €1.42 billion as Thom Browne slips
Chairman Gildo Zegna says Thom Browne is the one brand hurt by a hard third quarter, and a new Asics collaboration is due in the fourth.
Ermenegildo Zegna Group reported sales of €1.42 billion for the nine months ended 30 September, up 7.2% from €1.32 billion a year earlier. The third quarter contributed €433.8 million, an increase of 8.9% year on year, so growth continued through the period.
The Zegna brand, the Italian menswear and textile house founded in 1910, drove the result with sales of €918.4 million, a 12% gain on €819.8 million. Its third-quarter revenue climbed 13.8% to €283.8 million on strong direct-to-consumer growth in every region.
Chairman Gildo Zegna credited the direct-to-consumer channel, which grew 12.4% across the group to €1.11 billion over nine months and 13% in the quarter. The Zegna brand delivered what he called a robust 16% organic increase in that channel.
The Americas remained strong, with nine-month revenue up 14.7% to €440.7 million, 31% of the group total, and a 14% third-quarter gain led by double-digit Zegna DTC growth. Tom Ford Fashion also delivered solid growth in the region.
Zegna said the Americas continued their double-digit trend "despite an increasingly demanding comparison base". He revealed that a new Salotto Zegna will open in New York above the brand's flagship.
Greater China after two years of tuning
Greater China delivered revenue of €320.2 million, up 6.6% and 22% of the group total. The third-quarter rise of 8.7% was driven by Zegna's DTC channel and partly offset by Thom Browne's negative performance.
Zegna was plain about the region: "we fixed the motor and it's performing well after two years of tuning the engine." He pointed to positive feedback on the Su Misura line, Vellus Aureum and Triple Stitch shoes, and praised the excellence of service and personalisation.
He credited the two exclusive Salotto areas in Shanghai and Beijing with elevating the brand. Hong Kong, he said, has been picking up since the beginning of the year, and Macao has also helped.
Thom Browne the lone laggard
Thom Browne's nine-month revenue fell 5% to €168.5 million, and third-quarter sales dropped 5.9% to €45.4 million. The group attributed the quarter to a more challenging Chinese consumer environment and the ongoing streamlining of the wholesale channel.
Zegna called Thom Browne "the only brand that was impacted by a difficult third quarter; we have to find the right formula for the brand in China." A collaboration with Asics will drop in the fourth quarter, which he expects to be well received.
Tom Ford Fashion posted nine-month revenue of €226.4 million, up 3.5%, and third-quarter sales of €69.6 million, up 5.4%, with both channels contributing positively. Textile revenues edged up 1% to €97.9 million over nine months, and rose 3.5% in the quarter.
Zegna said new stores will open in South Coast Plaza, Bal Harbour and San Diego in the next weeks. A new flagship will be unveiled in Paris in the first quarter of next year.
Wholesale branded revenues fell 11.8% to €195.2 million over nine months and 5.2% to €63.4 million in the third quarter. In Europe, the Middle East and Africa, revenue reached €491.4 million, up 2.4% and 35% of the total.
EMEA grew 6.9% in the third quarter on double-digit Zegna growth, and the Middle East improved strongly on the previous quarter. The Rest of Asia-Pacific brought in €166.9 million, up 4.9% and 12% of the total, with a 3.6% quarterly gain.
When we covered the group's first half, revenue had risen 9% to €987.3 million while net profit fell. We also reported Zegna and Victoria's Secret pointing to stronger store performance and margin discipline as evidence their repositioning is working.
Looking ahead, Zegna said the group enters the final months of the year with "cautious confidence". While the global environment remains uncertain, he said the group stays focused on close client relationships grounded in more than a century of craftsmanship.
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Images: Zegna