On July 25, Italian luxury group Ermenegildo Zegna NV (hereinafter referred to as “Zegna Group”) (NYSE: ZGN) released its financial data for the first half of 2024, ending June 30: revenue for the first half was €960.1 million, a 6.3% increase from €903.1 million in the first half of 2023 (a 2.7% decline on an organic basis), with second-quarter revenue at €497 million, up 4.7% (a 0.4% decline on an organic basis).
Due to persistently low consumer confidence, revenue in Greater China was €266.3 million (a 13.2% year-on-year decline, an 11.7% decline on an organic basis), accounting for 28% of the group’s total revenue. However, the ZEGNA brand continued to perform well in this region.
Ermenegildo “Gildo” Zegna, Chairman and CEO of Zegna Group, stated, “In the first half of the year our Group reached €960 million of revenues with 6% growth and an improved organic performance in the second quarter.
ZEGNA continued to deliver robust performance with a +5.9% organic growth, driven by the DTC channel, up double-digit in EMEA and in the U.S. These results confirm that we are successfully delivering on ZEGNA’s evolution.”
Regarding the Thom Browne, he mentioned, “We are focusing on the strategic projects crucial to unlocking the brand’s long-term potential. The couture show in Paris confirmed Thom’s extraordinary talent.
At TOM FORD FASHION, we have just announced that Peter Hawkings is stepping down as Creative Director of the brand and his successor will be announced in the near future. As we look to the next phase of the brand’s development, I am today even more optimistic about the bright future of this business.”
Looking to the future, Ermenegildo Zegna further stated, “Looking ahead, I remain fully confident in the strategy we have put in place and the trajectory we are on. Our Group is a custodian of three authentic brands, each with unexplored long-term growth potential. We all recognize that 2024 will remain challenging, which is why we have been working on cost control initiatives across the Group. Nevertheless, we will continue to act with perseverance and firmness, combined with foresight and vision, to pursue our long-term ambitions.”
As of the close on July 25, Zegna Group’s stock price rose 8.29% from the previous trading day to $11.1 per share, with a latest market value of $2.778 billion. Over the past 12 months, Zegna Group’s stock price has fallen by 22.7%.
—By Division—
Zegna Division
In H1 2024, revenues for the Zegna segment, which includes the ZEGNA brand, textile and other, amounted to €660.5 million compared to €644.3 million in H1 2023, +2.5% YoY (+3.5% organic). Revenues in Q2 were €335.6 million, +3.3% YoY (+2.7% organic) driven by the solid performance from the ZEGNA brand.
In H1 2024, revenues for the ZEGNA brand were €566.1 million compared to €541.3 million in H1 2023, +4.6% YoY (+5.9% organic3). The performance was driven by ongoing robust growth in the U.S. and EMEA. Organic performance in the Greater China Region (GCR) remained in line with Q1 2024 (single-digit negative) in an increasingly challenging environment for the sector.
In H1 2024, revenues for Textile were €71.8 million compared to €73.1 million in H1 2023 (-1.7% YoY and -0.6% organic), with Q2 coming in substantially in line with Q1.
Other revenues, which mainly includes revenues for third-party brands, were €7.0 million compared to €17.7 million in H1 2023 (-60.4% YoY and -32.9% organic), due to the termination of the Tom Ford International distribution license for Tom Ford products4, following the acquisition of Tom Ford International LLC on April 28, 2023.
Thom Browne Division
In H1 2024, revenues for the Thom Browne segment amounted to €166.9 million, compared to €208.0 million in H1 2023 (-19.7% YoY and -27.0% organic5). The performance of the second quarter (-7.2% YoY and -17.8% organic), which improved sequentially, reflected the ongoing streamlining of the wholesale business, which was only partially counterbalanced by improved DTC performance and by a less demanding base of comparison. The brand continued to record strong results in Japan, which were offset by a decline in the GCR, EMEA and the Americas, also impacted by the decision to streamline the wholesale business.
Thom Browne brand results are substantially aligned to the segment, with H1 2024 revenues at €166.7 million compared to €207.0 million in H1 2023 (-19.4% YoY and -26.7% organic).6
Note: The distinction between the Thom Browne division and the Thom Browne brand lies in the revenue from Thom Browne stores in the Middle East and Africa managed by Zegna Gulf Trading LLC, which is classified under “Other” rather than directly under the Thom Browne brand revenue.
Tom Ford Fashion Division
Since the consolidation of Tom Ford International LLC and its subsidiaries occurred on April 29, 2023, this section comments only the organic performance, which compares the revenues of the two months in which Tom Ford International LLC was consolidated in 2023 and 2024.
In H1 2024, revenues for the Tom Ford Fashion segment amounted to €148.5 million, +4.7% organic (compared to the last two months of Q2 2023), driven by a good performance in DTC and the U.S. The company is continuing to strengthen the team and set the foundation for its next evolution.
—By Channel—
DTC Channel Revenue
In H1 2024, DTC revenues were €669.6 million compared to €583.4 million in H1 2023 (+14.8% YoY and +2.4% organic). ZEGNA DTC revenues drove the Group’s performance, increasing by 4.5% YoY and +5.1% organic growth, thanks to the solid performance in the Americas and EMEA. In Q2 ZEGNA DTC organic growth reached a good +4.0% notwithstanding the challenging base of comparison. At the end of June, ZEGNA counted 279 Directly Operated Stores (DOS), with 2 net openings in Q2, including Taormina, Italy.
Thom Browne DTC revenues were +8.5% YoY in H1 2024. Excluding the effect of the acquisition of the Thom Browne business in South Korea (previously accounted in the wholesale channel), DTC revenues declined by 12.8% organic, reflecting the challenging environment, especially in the GCR. Revenues improved slightly in Q2, mainly driven by a stronger Japan, but still with negative growth. At the end of June, Thom Browne counted 102 DOS, including 13 new small concession stores at Nordstrom and one store in Beijing WF Central.
TOM FORD FASHION DTC revenues reached €93.1 million, with 56 DOS at the end of June, including two net openings in the second quarter.
Wholesale Brand Revenue
In H1 2024, wholesale branded revenues were €211.7 million compared to €228.9 million in H1 2023 (-7.5% YoY and -14.9% organic).
ZEGNA wholesale revenues were €79.5 million compared to €75.6 million in H1 2023 (+5.2% YoY and +10.4% organic), mainly driven by different timing in deliveries.
Thom Browne wholesale revenues declined to €76.7 million compared to €124.0 million in H1 2023 (-38.1% YoY and -36.0% organic), still reflecting the decision to streamline the brand’s wholesale business. In Q2 2024 Thom Browne wholesale performance slightly improved thanks to a less demanding base of comparison.
TOM FORD FASHION wholesale revenues were €55.4 million.
—By Market—
In H1 2024, EMEA recorded revenues of €336.6 million (+4.3% YoY and -1.5% organic), accounting for 35% of Group’s revenues. Performance for the region was influenced by strong ZEGNA results, offset by the negative results of Thom Browne, especially in the wholesale channel.
Revenues in the Americas amounted to €246.0 million (+29.4% YoY and +6.7% organic), accounting for 26% of the Group revenues, with double-digit growth from ZEGNA and a solid performance from TOM FORD FASHION.
The GCR recorded revenues of €266.3 million (-13.2% YoY and -11.7% organic), accounting for 28% of the Group’s revenues, impacted by a still-subdued consumer confidence, with ZEGNA continuing to outperform in the region. Revenues in the rest of APAC grew to €110.0 million (+33.8% YoY and +5.4% organic), driven by the strong double-digit organic performance in the Japanese market offset by the performance of the other markets in the region.
SIGNIFICANT EVENTS OCCURRED IN THE SECOND QUARTER OF 2024
VILLA ZEGNA – Oasi Linen in Shanghai
On May 23, 2024, ZEGNA brought the new “VILLA ZEGNA” experience to Shanghai. “VILLA ZEGNA” reflects ZEGNA’s new approach to interacting with its customers, offering them immersive experiences that foster emotional connections to the brand. The one-week event was hosted in a building of three floors, seamlessly blending the vision of the founder, the brand’s history and the fabrics that made ZEGNA the leading menswear brand in the world – which, together, gave guests the opportunity to immerse themselves in the realm of top luxury.
ZEGNA Summer 2025 Fashion Show
On June 17, 2024, ZEGNA presented its Summer 2025 Fashion Show in an industrial Milanese space that was transformed into a field of linen to evoke the golden fields of Normandy ready for harvest. Envisioned by Artistic Director, Alessandro Sartori, the menswear collection celebrated the unique characteristics of the brand’s fabric of choice for summer: Oasi Lino. The collection represents a development central to the brand’s Our Road to Traceability, as the Oasi Lino fibers are fully traceable.
Thom Browne Couture Show
On June 24, 2024, with references to the upcoming Olympic Games, Thom Browne held its second women’s and men’s 2024 couture collection in Paris. The show was an immersive experience that centered on muslin and with references to the upcoming Olympic Games, all of which revealed an incredible exhibit of traditional couture techniques.
On July 22, 2024, it was announced that Peter Hawkings is stepping down as Creative Director of the brand. Peter Hawkings has been at TOM FORD since its inception and at the helm of creative since April 2023.
The Spring-Summer 2025 collection will be presented in the Milan showroom in September 2024. A successor will be announced in the near future.
| Source: Zegna Group official website and financial report
| Image Credit: Zegna Group official website
| Editor: Wang Jiaqi
