Solid growth across geographies and channels for both the Zegna and Thom Browne labels, in particular in Europe, the U.S. and the Middle East, boosted the Ermenegildo Zegna Group’s top line in the third quarter. And Gildo Zegna, chairman and CEO, believes the Middle East “can be the new China.” During a conference call with analysts on Thursday to comment on the quarterly results, he said he was in the Middle East two weeks ago, visiting five countries in a few days, which led him to a confident take on the region. “We are well-placed there and will be open stores with an aggressive five-year strategy. They are interested in what we do there,” he observed.
In the three months ended Sept. 30, the group reported unaudited revenues of 357 million euros, up 27.5% year-over-year. Sales in the first nine months of 2022 reached 1.09 billion euros, up 22.9% compared with the same period in 2021.
The Zegna segment, which includes Zegna branded products as well as the textile and third-party brands product lines, reported a 27.2% increase in sales in the quarter, reaching 289 million euros and showing an acceleration in the third quarter.
The Thom Browne label grew 29.5% in the quarter, reaching revenues of 69 million euros.
“This quarter was one of our strongest yet thanks to exceptional performance by both Zegna and Thom Browne in Europe, the Middle East, and the U.S., as well as a rebound in the Greater China region,” said Gildo Zegna. “We achieved a number of milestones this quarter as we continue to execute on our strategy and commitments while remaining true to the values that have guided us for 112 years.”
He highlighted the launch of Oasi Cashmere, “a significant step on our road to traceability,” with the goal of 100% of the cashmere used in this collection being fully traceable by 2024. He also underscored that Oasi Zegna received this year’s Biodiversity Conservation Award at the CNMI (Camera Nazionale della Moda Italiana) Sustainable Fashion Awards in September at the tail end of Milan Fashion Week.
Zegna also congratulated Thom Browne on his appointment as the next chairman of the Council of Fashion Designers of America, “a testament to his creativity, his incredible success, and his leadership in the fashion industry in the U.S. and around the world.”
Also, Zegna’s artistic director Alessandro Sartori was named WWD’s 2022 Menswear Designer of the Year “in recognition of his innovative vision that has taken the brand in new directions.”
In the quarter, Zegna products revenues grew 18.6%, reaching 224 million euros. The company attributed the strong performance to the success of the rebranding strategy presented at the end of last year and fully launched in stores in early July, with a focus on luxury leisurewear. Zegna said knitwear is growing steadily and the footwear business “remains robust.” Tailoring and made-to-measure have also seen a strong rebound in the quarter, particularly in the U.S. Zegna said that “the suit business is solid, although not yet to 2019 levels, but personalization is up.”
During the call, the executive also highlighted the partnership with Real Madrid announced in August through which Zegna will become the official luxury travel wear partner for the successful football club. “This will introduce the brand to a whole new generation of customers,” he said.
Thom Browne revenues grew 29.8% in the quarter compared with the same period last year, reaching 69 million euros. Womenswear continues to grow faster than menswear, now accounting for almost 30% of the brand’s revenues. The namesake designer returned to Paris to show his spring 2023 collections.
Growth across the brand is supported by strong wholesale demand, e-commerce growth through T-Mall in the Greater China Region, and four new store openings during the quarter, bringing the total of directly operated stores to 57 as of Sept. 30, four more units compared to the end of June.
Thom Browne CEO Rodrigo Bazan confirmed that the brand will have 62 directly operated stores by the end of the year 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 during the call.
The group’s textile revenues for the quarter reached 30 million euros, up 33.3%, with growth across Lanificio Ermenegildo Zegna, Bonotto, and Dondi. Tessitura Ubertino, which was consolidated as part of the group in June 2021, in the first nine months of 2022 contributed an additional 3.9 million euros in revenues.
Third-party brands revenues grew 64.2%, reaching 32 million euros for the quarter thanks to strong contributions from Tom Ford and Gucci, the latter having more than doubled in comparison to the third quarter of 2021.