Retail in Asia


Ermenegildo Zegna Group’s APAC sales slowed by China

Italian luxury fashion house and owner of the Zegna and Thom Browne brands, Ermenegildo Zegna N.V. (Zegna Group), announced unaudited revenues of EUR 377.6 million (USD 399 million) for the first quarter of 2022, an increase of 25.4 percent year-over-year.

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“Over the course of 2021, the Zegna Group achieved a number of milestones. 2022 was off to a good start and is now looking more challenging due to the combination of geopolitical, economic and health related uncertainties. Both our brands are coping well in the face of these increased challenges, and we will continue to execute against our strategic objectives,” said Ermenegildo “Gildo” Zegna, Chairman and CEO of the Zegna Group.

“Ours is a multi-year journey, and as we continue to monitor ongoing global developments – especially the recent COVID-19 spike in China – we remain ahead of our Plan and confident in the strength of our brands,” Zegna added.

Zegna’s One Brand strategy and continued focus on luxury leisurewear have allowed Zegna to continue to strengthen its position as a global leader in luxury menswear. For its first quarter of 2022, Zegna Group posted a 25.4 percent year-over-year increase in revenues, to EUR 377.6 million (USD 399 million). This strong performance was driven by a continued rebound of the Zegna segment, whose revenues increased 27.1 percent year-over-year to EUR 283.5 million (USD 299 million) with robust performance in all product lines, as well as the performance of the Thom Browne segment, up 22.3 percent year-over-year, with revenues totaling EUR 98.1 million (USD 103.7 million), with consistent performance in both DTC and Wholesale channels.

Zegna-branded products, which include apparel, bags, shoes and leather goods, as well as licensed goods and royalties, posted revenues that were up 22.1 percent year-over-year to EUR 224 million (USD 236.8 million), driven in large part by the continued robust growth in two primary categories, Luxury Leisurewear and Shoes, and by the strong rebound of Made-to-Measure. Revenues of the Group’s Textile business line saw a strong increase to EUR 30.2 million (USD 31.9 million), up 64.6 percent year-over-year, due to the increase in healthy demand. The 56.8 percent expansion in revenues for the third-party brands business line to EUR 24.4 million (USD 25.8 million) reflected strong supplies to our key third-party customers. Thom Browne continues to exert significant appeal among younger consumers around the world, leading to growth across all channels, with the women’s growth rate outperforming men’s.

Growth was strong across most geographies. However, APAC revenues showed mixed performance, with the Greater China Region slowing down since March due to new COVID-related restrictions, which reversed the positive performance recorded until February. The rest of APAC (excluding the Greater China Region) rebounded by 27.8 percent year-over-year, as many countries lifted COVID-19 restrictions.

DTC channel sales grew 23.1 percent year-over-year to EUR 218.1 million (USD 230.5 million), with similar performance by the Zegna-branded products business line and Thom Browne segment. The Zegna brand DTC channel revenue increase – up 23.2 percent to EUR 183.9 million (USD 194.4 million) – was driven by a strong recovery across geographies, especially North America and Europe, mitigated by the Greater China Region since early March. Thom Browne’s strong growth in EMEA, North America and Japan was also offset by the Covid-19 related restrictions in the Greater China Region.

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“The start of 2022 has been marked by considerable geopolitical uncertainty, adding to the volatility already present due to the ongoing global health crisis. Assuming no further deterioration or geographic extension of the war in Ukraine, a normalization of the COVID-19 pandemic in Greater China before the summer, and no other unforeseen events, the Group is forecasting revenue growth in the low-teens, and an improvement in its Adjusted EBIT, building on the accelerated expansion achieved in 2021, when the Group delivered an Adjusted EBIT of 11.5% as a percentage of revenues, exceeding its own guidance of “around 10%.” said the company in a statement.