Zegna to reach 2 billion euros in 2024 with Tom Ford

«We are ahead of schedule», Gildo Zegna stated during Trivero-based group’s second Capital markets day 2023 in New York. «We were here two years ago to ring the bell, and during the first Capital markets day in May 2022, we had not yet acquired Tom Ford Fashion. Things are now changing». Until recently, the sales forecast predicted breaking through 2 billion in consolidated sales by 2025. However, the outlook has improved, and the targeted sales, including those of the US brand, will be achieved as early as next year. «Our financial performance today clearly indicates that we are a stronger and more prosperous company than ever before», the entrepreneur continued. «Despite challenging geopolitical and macroeconomic conditions over the past two years, we have achieved these results by bolstering our brands».

The Group aims for Cagr-compounded average growth rate in revenues of more than 10% and adjusted ebit of about 20%, as well as a solid cash surplus. «Our objectives, strategic and financial, have always been rooted in our values», Gildo Zegna emphasized. For the past nine months, the Group that owns the Zegna, Thom Browne, and Tom Ford fashion brands reported sales of 1.33 billion euros, indicating a 22.9% increase from last year’s corresponding period. In the third quarter of this year, they amassed revenues of 431 million, marking a 20.8% growth. «The results signify the potency of our three brands and the attainment of our objectives», Gildo Zegna, the group’s chairman and ceo, remarked during the announcement. «I am pleased with our success in various countries as our geographic diversity provides resilience in a highly dynamic environment», he stated. «Earlier this year, we added Tom Ford Fashion to our portfolio, which has become the Group’s third pillar. The results thus far demonstrate our ability to implement strategies for Zegna and Thom Browne».

What are your predictions for the three pillars of your company?

Zegna expects to increase store productivity and market share globally. For Thom Browne, we anticipate high average direct-to-consumer revenue growth in the coming years with simplified wholesale distribution, based on the brand’s 20th anniversary. Finally, for Tom Ford Fashion, we project a revenue growth rate of over 10% in the medium term.

Could you consider a dual listing on the Italian Stock Exchange?

New York provides sufficient challenges and cost-effectiveness. Staying in New York seems to be paying off well. The Group has no plans to list in Milan after landing on Wall Street.

Did your presence at the NYSE increase visibility?

Zegna’s commercial visibility was also boosted by its Wall Street landing, contributing to progress in the US market. While we represented the power suit upon our arrival in the US in the 1980s, we are now a lifestyle brand.

What is the performance forecast for 2024 and 2025?

Starting in fiscal year 2023, the Group aims to achieve a revenue CAGR of over 10% in the medium term, alongside an adjusted EBIT CAGR of roughly 20%. This objective will result in a substantial cash surplus, despite the anticipated higher and targeted marketing expenditures and capital investments aimed at enhancing brand appeal and driving growth.

Are you currently considering new acquisitions?

Although we are open to new challenges, I cannot provide further information. However, we have a significant project involving Tom Ford that we recently acquired and are currently developing. Our current focus is on this endeavor, and we must continue its development.

Are you planning to maintain independence, or are you considering becoming a part of one of the world’s leading luxury giants?

Coming from Piedmont, modesty is one of the characteristics that has always distinguished us, and we do not want to get ahead of ourselves... However, we have put together three luxury brands and talking about a conglomerate does not seem excessive.

Can you be considered a luxury hub?

Our unique balance of geography, products, and consumers gives us a voice in global luxury.

With ongoing geopolitical turmoil, what do you expect for the next two years?

We possess three brands with well-defined strategies, an adept team that effectively executes tasks, and enormous prospects in all markets to be captured. Therefore, I maintain my confidence in the medium-term future, and should any unexpected circumstances occur, we will be equipped to defend and counter-attack, as observed during Covid-19.

Gildo Zegna explained that Tom Ford aims to be one of the top 10 global luxury brands

For Tom Ford, “our goal is to create one of the top 10 global luxury brands,” Gildo Zegna explained. Since April 29, 2023, Tom Ford Fashion has been included in the Zegna Group’s balance sheet as a new operating and reporting segment led by Gildo Zegna. During April 29 to September 30, 2023, the segment generated 139 million euros of revenue. In the third quarter of 2023, the company earned 75 million euros. After the last fashion show in September and Peter Hawkings’ debut as creative director, will the brand continue to showcase in Milan? «I am certain. Milan’s rich fashion calendar as Paris makes it a great opportunity for the brand and the city», he added. Additionally, the entrepreneur «sees potential for expanding into new markets, particularly in Asia where the brand presence is lacking. We accelerate on women’s collections and I am confident in the arrival of good results», he concluded. (All rights reserved)