MILAN — The strength of the euro came back to take a bite out of Ermenegildo Zegna’s top-line numbers despite rising sales in Asia and Europe.
This story first appeared in the January 13, 2003 issue of WWD. Subscribe Today.
Zegna said its 2002 revenue slid 3.7 percent to $687.8 million from $713.8 million in 2001. The company said the decrease was attributable to the weakness of the dollar against the euro as sales in its 379 owned and franchised stores rose 8 percent during the year.
Dollar figures have been converted from the euro at current exchange rates. The euro, which traded for about 85 cents one year ago, has brought as much as $1.05 since Jan. 1.
The privately held firm didn’t report profit figures.
“We are hopeful about 2003,” chief executives Ermenegildo Zegna and Paolo Zegna said in a statement. “Withstanding the possibility of war, recession [and the dollar’s weakness], we still expect to see growth and we have planned investments of $52.1 million.”
The firm didn’t provide information either on sales or percentage of change for the North American market, Zegna’s largest, which generates roughly 35 percent of its revenue.
Zegna did shed light on better-performing markets. Sales in Asia rose 15 percent, while those in Europe grew 4 percent. On a country-specific basis, revenue in Japan increased by 3 percent, while China and Russia saw sales growth of 30 and 35 percent, respectively.
Clothing and accessories accounted for 85 percent of Zegna’s sales, while textiles accounted for the remainder.
Zegna said it spent $43.8 million in 2002 to modernize production, open directly operated stores, buy leather clothing manufacturer Guida and form a leather accessories joint venture with Salvatore Ferragamo.
“The year 2003 will be a decisive year to establish our brand in the leather-goods sector, from which we are expecting significant results not just in terms of product quality, but above all in terms of market share growth,” the Zegnas said in the statement.
“In our strategy, leather goods manufacturing will become one of the growth drivers of the Ermenegildo Zegna brand,” the statement said.