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A Closer Look at Zegna, Thom Browne and Tom Ford's Revenue Streams Amidst Global Challenges
Sectors & Markets
19 May, 2024
Table of contents
The Ermenegildo Zegna Holditalia S.p.A. Group has released its financial performance for the first quarter of 2024, reflecting a mixed picture of growth, challenges, and strategic recalibrations. The luxury fashion house reported consolidated revenues of €463 million, marking an 8% year-on-year increase and an 11% rise on a constant currency basis. Despite these gains, the company faced a 5% contraction in organic growth, influenced by strategic adjustments and global market conditions.
Regionally, the Americas stood out with a significant revenue increase of €114 million, achieving a remarkable 10% organic growth. This was contrasted by the performance in the EMEA and Greater China Region (GCR), where challenges, particularly for the Thom Browne brand, dampened results. Japan, however, demonstrated strong growth across all brands, highlighting the diverse geographic performance within the group.
The Direct-to-Consumer (DTC) channel continued to be a strong revenue driver, particularly for the Ermenegildo Zegna brand, which saw a 6% organic growth, contributing significantly to the group’s overall performance. In contrast, the Thom Browne brand experienced a 35% decline in organic growth, primarily due to a strategic shift away from wholesale channels, which impacted overall figures.
The individual brand performances were equally telling. The Zegna brand remained robust with revenues of €283 million, up 7% organically, driven by sustained demand for its products. On the other hand, Thom Browne, undergoing a strategic transformation, saw revenues decline to €79 million. The newly consolidated Tom Ford Fashion added €65 million to the group’s top line, with a strong showing in its primary market, the United States.
Looking ahead, the Zegna Group remains committed to its strategic initiatives, including further expanding its DTC capabilities and enhancing brand equity. The focus will continue to be on adapting to market dynamics and enhancing operational efficiencies to sustain growth and profitability.
While the Zegna Group navigates through a period of strategic transformation and external challenges, the emphasis on strengthening its DTC network and refining its brand portfolio should yield positive outcomes. Monitoring the recovery in the Greater China Region and the integration of high-value brands like Tom Ford will be crucial in the coming quarters.
| Financial KPI | Q1 2023 | Q1 2024 | Change |
|---|---|---|---|
| Overall Revenue | €428 million | €463 million | +8% YoY |
| Zegna Brand Revenue | €272 million | €283 million | +6,8% organic growth |
| Thom Browne Revenue | €113 million | €79 million | -34,4% organic growth |
| Tom Ford Fashion Revenue | €65 million | €65 million | Stable, positive in US |
| DTC Channel Revenue | €272 million | €328 million | +20,4% YoY |
Regional growth showed varied trends with the Americas experiencing a substantial increase of 57,7% year-over-year, EMEA seeing a modest rise of 4,3%, and the Greater China Region facing a decline of 15,3% compared to the previous year.
In conclusion, the Ermenegildo Zegna Group's Q1 2024 report highlights both the resilience and the areas of strain within the luxury fashion sector. The strategic decisions made today will be pivotal in shaping the future trajectory of the group’s financial health and market position.
Read the full Ermenegildo Zegna Group report Here.
Cover Image Courtesy: Zegna Brand Facebook Page