American Sales Soar: Tom Ford Acquisition and Strong Growth at Zegna and Thom Browne Propel Revenue
Despite a slowdown in luxury sales in North America, Ermenegildo Zegna Group has shown impressive growth in the region. The company’s US revenue surged to €157 million ($173 million) in the first half of 2023, marking a substantial 26 percent increase from the previous year at constant exchange rates. This remarkable growth can be attributed to the acquisition of the Tom Ford fashion business and the strong double-digit performance of Zegna and Thom Browne.
I am particularly pleased that we are gaining market share, and I am confident about the strong opportunities ahead as the menswear segment grows globally with existing and new audiences
– Gildo Zegna, Chairman
Total group revenues for the first half of 2023 reached an impressive 903 million euros, compared to 729 million euros during the same period last year. This growth is a result of consolidating Tom Ford International, which commenced on April 29, as well as the inclusion of tannery Pelletteria Tizeta in the financials.
In contrast, other luxury leaders like LVMH and Prada reported weakened sales in the American market due to lower demand from aspirational customers. However, Ermenegildo Zegna Group’s strategic approach and focus on growth in the US proved to be successful.
The company’s robust performance in the region can also be attributed to a rebound in Chinese consumer spending and strong sales in Europe. The direct-to-consumer channels of both Zegna and Thom Browne were particularly instrumental in driving momentum, witnessing impressive growth rates of 32.7 percent and 25.3 percent, respectively, in the second quarter of 2023.
During the period from April 29 to June 30, Tom Ford Fashion reported revenues of 64 million euros. Ermenegildo Zegna expressed enthusiasm for working with Lelio Gavazza, the recently appointed CEO of Tom Ford Fashion, aiming to position the brand among the top 10 luxury fashion names worldwide.
Management also discussed the evolving spending power of the Zegna consumer, particularly in Greater China. The group is actively working on transitioning its Z Zegna stores to adapt to the changing market dynamics. Quality growth has been observed both in Greater China and abroad, particularly with the return of Chinese customers to international travel. Essential to their success is ensuring that stores offer elevated services, such as the made-to-measure arm, which guarantees delivery in just two weeks, catering to the evolving demands of discerning customers.