Italian luxury group Ermenegildo Zegna has officially announced a significant generational transition plan: effective January 1, 2026, current Chief Financial Officer and Chief Operating Officer Gianluca Tagliabue (third from the left in the image below) will assume the role of Group CEO, while fourth-generation Zegna family members Edoardo Zegna and Angelo Zegna will serve as Co-CEOs of the ZEGNA brand.
During the earnings call following the release of the company’s latest financial results, Gianluca Tagliabue provided in-depth insights into Zegna Group’s current situation in the Chinese market, evolving consumer behavior, and strategic adjustments for the future.
Pictured above: Angelo Zegna, Gildo Zegna, Gianluca Tagliabue, Edoardo Zegna
According to the group’s latest quarterly report, revenue rose 0.2% year-over-year to €398.2 million (organic growth: +3.6%), marking a notable recovery from the first half of the year (which saw a year-over-year decline of 16.2%, or -14.7% on an organic basis).
Regarding the Chinese market, the management expressed “cautious optimism,” stating that the company no longer expects a sharp rebound but is instead adapting to structural shifts in the market through revised expectations and strategies.
Gianluca Tagliabue noted that fluctuations in consumer demand remain a decisive factor, particularly in specific regions. “First and foremost, China. We expect the market to remain volatile over the next few months,” he said.
“China remains a cornerstone for both the luxury industry and our company, but we are witnessing its transition into a new normal, which we anticipate will bring about more balanced growth rates in the years ahead.”
Tagliabue further revealed a clear polarization in luxury consumption in China: on one hand, high-end spending remains resilient, but middle-class and entry-level consumption have yet to recover. On the other hand, performance in Guangzhou, Shenzhen, and Chengdu is slightly outpacing that of Beijing and Shanghai.
Responding to questions about performance and consumption stratification in the Chinese Mainland, Gianluca Tagliabue offered detailed observations:
“Firstly, we’re seeing strong performance among top-tier consumers in China, including demand for our Vellus Aureum and Aureus collections, as well as our most refined and high-priced suits. So we’re seeing good traction at the high end. However, we have yet to observe a consistent stabilization in foot traffic or more affordable segments of consumption.“
“From a geographical perspective, we’ve seen an improving trend in Hong Kong. Additionally, we’ve observed that Shenzhen, Chengdu, and Guangzhou are performing slightly better than Beijing and Shanghai.“
Tagliabue also elaborated on Chinese consumers’ overseas spending: “We’ve seen a sharper decline in Chinese consumer purchases abroad, though the impact on us is relatively limited. The drop in Chinese consumer spending outside Greater China has been steeper.“
In response to the “new normal,” Zegna Group is implementing a dual strategy of consolidation and focus. Rather than pursuing aggressive store expansion, the group is opting to close underperforming locations and concentrate resources on enhancing retail quality and experience.
On the topic of store networks and future investment, Gianluca Tagliabue made the group’s consolidation approach clear:
“This is why we’re taking a cautious stance. For us, being cautious means placing bets on next year’s buying plans, capital expenditures, and operational expenditures—and possibly, as we’ve mentioned before, pruning our retail network wherever it makes sense. We aim to consolidate operations into fewer but better stores. This process begins in 2025 and will continue over the coming years.”
Paola Durante, the group’s Head of Investor Relations, confirmed during the call that the ZEGNA brand closed four stores in the third quarter, primarily located in Greater China.
| Source: Earnings Call
| Image Credit: Zegna Official Website
| Editor: LeZhi
