The Company Also Revealed New Growth Plans for its Tom Ford Brand
Ermenegildo Zegna Group has announced a growth in sales for the first half of 2024. Over the six months ending June 30, sales increased by 6.3 percent to 960.1 million euros, up from 903.1 million euros in the same period last year. This growth was driven by robust performance in the U.S., Europe, Middle East, and Africa, along with strong direct-to-consumer sales. However, organic sales were down by 2.7 percent. In the second quarter, group revenues rose 4.7 percent to 497 million euros.
The announcement was made on during a conference call with analysts, in which Gildo Zegna, chairman and CEO of the Ermenegildo Zegna Group, discussed his ambitions for the group while revealing its unaudited first half revenues. Emphasizing the company’s long-term vision, he stated, “My family has been running the company for more than a century, and we are here for at least the same. We have always run it with a long-term vision and this will not change. Our goal is to create a much stronger, more global and more diversified luxury business.”
During the call, analysts inquired about the future of Tom Ford following the sudden departure of creative director Peter Hawkings. Zegna, while not providing reasons for the exit, stated the goal is “to make the brand more global, doubling down on women’s and day wear, and to build up its leather goods proposition fully.” He emphasized the need for a successor with strong expertise in these areas but did not name any potential candidates.
Zegna dismissed concerns about alienating loyal customers due to Hawkings’ departure, who had worked with Tom Ford for 25 years. He expressed confidence in the brand’s CEO, Lelio Gavazza, saying, “I am very confident we will deliver in the long term.” He highlighted the opening of new stores in Taormina, Rome, Hangzhou Tower, and a flagship in Beijing China World.
Looking forward, Zegna remains “fully confident in the strategy we have put in place and the trajectory we are on.” He acknowledged the challenges of 2024 but stressed the importance of cost control initiatives and continued investment in the brands to navigate market volatility.
Sales of the Zegna brand, led by artistic director Alessandro Sartori, rose 4.6 percent to 566.1 million euros, driven by strong growth in the U.S. and EMEA. Despite a single-digit decline in Greater China, Zegna is optimistic about 2025, citing a successful “Villa Zegna” event in Shanghai that strengthened customer connections.
In the first half, Thom Browne brand revenues fell by 19.4 percent to 166.7 million euros due to wholesale streamlining, partly offset by improved direct-to-consumer performance. Zegna, along with the brand’s CEO Rodrigo Bazan, is taking “strong action” to address organizational imbalances and enhance sales and merchandising, especially in China. Business in Korea remains strong, with improvements needed in Japan.
Since consolidating Tom Ford International LLC in April 2023, the group reported 148.5 million euros in first-half revenues for Tom Ford Fashion, reflecting a 4.7 percent organic growth. The group’s overall sales in the Europe, Middle East, and Africa region rose 4.3 percent to 336.6 million euros, accounting for 35 percent of total sales. The Americas saw a 29.4 percent increase to 246 million euros, driven by Zegna and Tom Ford Fashion.
Greater China recorded a 13.2 percent decline in revenues to 266.3 million euros, impacted by low consumer confidence, though Zegna outperformed in the region. Revenues in the rest of Asia Pacific rose by 33.8 percent to 110 million euros, boosted by strong performance in Japan.
Chief financial officer Gianluca Tagliabue noted that retail sales in June and July were stable, with some softness in Hong Kong and Macao. Direct-to-consumer revenues increased 14.8 percent to 669.6 million euros in the first half, driven by Zegna’s performance, which saw a 4.5 percent rise to 486.5 million euros.
At the end of June, the Zegna brand operated 279 stores, with plans for new openings in Monte Carlo, New York’s Meatpacking District, Harry Rosen, Wuhan, Ala Moana, Riyadh, and Lane Crawford. Thom Browne’s direct-to-consumer revenues increased by 8.5 percent to 90 million euros, despite a 12.8 percent organic decline, with 102 stores including new locations at Nordstrom and Beijing WF Central. Tom Ford Fashion’s direct-to-consumer revenues surged to 93.1 million euros from 34.7 million euros, with new stores planned for Singapore, Harrods, Madrid, and Saint Moritz.
Group wholesale revenues declined 7.5 percent to 211.7 million euros, with Zegna’s wholesale revenues rising by 5.2 percent to 79.5 million euros. Thom Browne’s wholesale revenues fell by 38.1 percent to 76.7 million euros due to streamlining efforts, while Tom Ford Fashion’s wholesale revenues increased to 55.4 million euros from 29.2 million euros.
