NEW YORK – Already a retail pioneer in emerging markets such as China and Russia, Ermenegildo Zegna is setting its sights on South America.
The Italian clothing brand opened its first store in the Argentine capital of Buenos Aires last week.
Zegna CEO, Gildo Zegna, who flew in for the opening, told DNR he was overwhelmed by the press interest and turnout for the opening, both of which bode well for the brand’s business there.
“I must say that the way things are going in South America right now makes me feel very positive about future growth there,” Zegna said by telephone from the store last week.
The 2,800-square-foot flagship, the first Zegna store in Argentina, is located on the tony Avenida Alvear, where Valentino, Louis Vuitton and Hermes also count shops.
Zegna said South America currently generates 3 percent of the group’s revenues, or approximately $29.5 million, but that number could grow to 5 percent by 2010. (For complete yearend results, see page 14.)
“Right now I am surely more optimistic about South America than I am about India,” the Italian executive added.
Most luxury brands are investing heavily in China and India; however, Zegna said he sees equal opportunity for growth in South America. Zegna has seasoned executive Juan Aguilar overseeing its entire Latin American operation and has established two bases of operations: one in Sao Paolo for South America and the other in Mexico City for Central America.
As was the case in China, Zegna is one the first brands to start investing seriously in South America. The company has rolled out directly owned shops in Sao Paolo, Brazil; Lima, Peru; and Guayaquil, Ecuador, in the past year. More openings are slated this year in Columbia and Panama, and next year, Zegna said, the company would renovate and upgrade its Mexico City flagship.
“It’s not just a matter of opening stores,” Zegna said. “You have to really invest in the structure and tend to the stores as though they were your babies.”
The Buenos Aires opening is a significant benchmark not only for Zegna but also for the Argentine economy, which has steadily recovered following its devastating collapse in 2002.
Argentina’s GDP grew 9 percent last year, according to the CIA’s World Factbook, putting it just behind China, which recorded a 10 percent growth in its GDP. India, by comparison, marked a growth rate of 8.5 percent.
The three-floor shop, designed by longtime Zegna collaborators Gianmaria and Roberto Beretta, carries all of Zegna’s categories, including its fashion-driven brand, Z Zegna, and its nascent eyewear collection. The top floor is entirely dedicated to Zegna’s made-to-measure program, which has marked double-digit growth in the past two years.
“The consumer here is very dapper and very attentive to how he looks and what he wears,” Zegna said. “However we’re introducing Z Zegna and Zegna Sport. It’s a gradual process.”
The executive also put out a call to other brands to open in Buenos Aires. “I wish others luxury brands would come,” Zegna said. “We need a critical mass of retailers here. The effect would be very positive.”