Ermenegildo Zegna

Family is the thread that runs through everything at the Ermenegildo Zegna Group.

The luxury men’s brand was founded in 1910 in Trivero, Italy, as a textile mill, and is now in its fourth generation of family ownership and operation.

Current chief executive officer Ermenegildo Zegna, the third generation, proudly pointed to the involvement of his son Edoardo, who is now firmly entrenched in the brand as its head of omnichannel initiatives and is responsible for content for the 108-year-old company. “My mind is on succession planning,” he said, “which is one of the most important things for family enterprises.”

But while the company may be over a century old, its mission has not changed much. Zegna said his grandfather, the founder, “was a visionary. He wanted to create the best fabrics in the world. It was the second generation that took us into the clothing business. With the same qualities of style, attention to detail, excellence in product, we introduced ready-to-wear and made-to-measure and the Zegna suit in particular became synonymous with power dressing.”

But while the core of the business has remained constant, the family realized a few years ago that it also needed to make some “disruptive changes” in order to meet the needs of today’s customer. Those changes hit nearly every part of the business.

“We realized that the consumer was changing and we had to develop less formal and more comfortable weekendwear,” Zegna said. At the same time, the company also embarked on an omnichannel strategy to enhance its distribution options, brought in new creative leadership and embarked on a new brand strategy.

“When I turned 60, I brought in a good number of executives and made sure the second level is Millennial because unless you understand that mindset, you cannot transform the brand strategy,” he said.

As far as design strategy was concerned, the company brought back Alessandro Sartori to serve as artistic director. Sartori had worked for Zegna for years before leaving to join Berluti for a short time.

Upon his return, Zegna said, “He created an integrated new way to infuse what Sartori calls ‘The Millennial Mind-set’ [into the product].”

The 63-year-old ceo said this younger-skewed aesthetic can appeal to both young and old alike. “I’m not Millennial at all, [but] I might have the Millennial mind-set.”

Sartori then worked to get this message out by creating a new advertising campaign called Defining Moments, which has starred Robert De Niro, among others. The American actor, whose heritage is Italian, represented a more casual, more accessorized and more personalized image, he said.

In terms of product, the Zegna offering now includes the flagship Ermenegildo Zegna collection that ranges from tailored clothing to leisurewear; Z Zegna for sportswear, and the new Ermenegildo Zegna XXX Couture collection of luxury streetwear, which is targeted primarily to markets such as South Korea, he said.

The company was also an early adopter of the trend for personalization, which is centered around its made-to-measure initiatives that it offers in everything from suits and sportswear to shoes and leather goods.

“The man who wants to change his wardrobe — Palo Alto or Singapore style — can be attracted by showing this personalization,” Zegna said.

And the ultimate in personalization comes from its ability to do custom clothing.

“We felt that as Italians, we couldn’t not have a bespoke atelier, so we created this thing with two Italian tailors who produce garments that take 70 hours per suit. There is a customer that goes for that and this is a personalized service [we offer] to our top clients worldwide.”

The company has also made some other dramatic shifts in its business, he said.

“Millennials and climate change are the two things that affect us the most. So we have to get away from this idea of creating collections by season — we have to create collections by project,” Zegna said.

And offering specific product targeted to specific markets is also essential, he believes, and ultimately has global reach.

“More local distribution makes you understand what to create across the world,” he said.

China, where Zegna has had a presence since 1991, now represents 50 percent of the brand’s business and is an increasingly important market when it comes to trends. The U.S. is its second largest.

“We used to test new things in this market [the U.S.], but now we test them in China, and if it works, then we bring them around the world,” he said. Zegna added that the Chinese customer “is so alive and he wants continuous innovation — probably because he’s younger and he has more time to shop. This going less west to east rather than from east to west is surely affecting our way of doing business.”

Expanding its omnichannel presence is also important to the future, he said. Before his son joined the family business from Everlane, the thinking was that online was “more as a service tool than a sales tool.” But today, Zegna is sold on such large online players as Farfetch and Mr Porter and is also experimenting with two pop-up stores on JD.com and Alibaba in China, “where the customer is more mobile oriented than in Europe,” he said.

Whether in stores or online, Zegna touts its unique strength of being a “fully integrated fashion brand” — one that goes “from sheep to shop and from shop to street,” he said.

Zegna owns its own sheep farms in Australia and uses the fiber produced from their wool for its fabrics and apparel.

While some have questioned the viability of such a strategy, Zegna said it definitely works.

“Is the Zegna model sustainable? From a farm in Australia down to the store,” he asked. “I think so, but it is a question worth asking. It allows us to keep our exclusivity, create innovation and makes us capable of [producing] capsule collections and new ideas to keep the stores going.”

This includes everything from what the design team calls “crafted modernity,” he said, to indicate pieces that embrace handwork in modern silhouettes, as well as sportswear made from fabrics dyed from flowers, wash-and-go suits in merino wool, and leather products manufactured on a special loom that allows the brand to create “structured effects.”

It also includes Zegna’s “sneaker project,” he said, where the brand created a special workshop in Parma, Italy, to offer its take on the sneaker craze.

“Our distribution today is 60 percent retail and 40 percent wholesale,” he said. And by offering sneakers, Zegna is doing its part to ensure that the customer looking for that popular item doesn’t “migrate to someone else. It’s like a competitor trying to steal a loyal customer away if you don’t move fast.”

Zegna also worked with Maserati, an another Italian brand founded in 1910, on a capsule. The head of the car company asked if Zegna could design an interior “to create a cocoon effect.” He pored over the idea and then agreed to create “a pure silk interior design made in our fabrics for Maserati.” At the same time, Zegna also created a luxury collection of apparel and accessories for Maserati drivers that would be sold in its stores.

Sustainability is also a long-standing mission of the Zegna brand.

“It’s a fundamental value of our family,” he said. “I go back to our founder in the Thirties who really thought that was the way to move ahead — to create not only value but to leave a legacy for the next generation.”

So the company created Zegna Village, a 100-square-kilometer oasis in the mountains of Biella on which it planted 1 million trees. But in addition to the nature preserve, this investment into the Piedmont region of Italy where the brand was founded, also provides homes for 400 people, most of whom are employees of the company.

“This makes us very proud,” he said.

Zegna is also proud of its dedication to education. He explained that he “fell in love with a Rhodes scholarship initiative that started many years ago in Britain and we created a Rhodes scholarship in Italy. We have a commitment to create endowment awards of 1 million euros a year for 25 years for young talent in Italy who don’t have the means to travel abroad. So we send them for post-graduate study. They have to work abroad but then bring the value back home.”

Although he characterized it as “a little drop in the puddle,” it illustrates the company’s commitment to the next generation.

That’s true within the ranks of the Ermenegildo Zegna Group as well.

“I think there is no future without a united family,” he said. The company’s founder believed that “a strong family made strong businesses and strong businesses made strong families, and the fact that we have a few generations in marketing, design and merchandising is good.”

This sense of unity is maintained by a “family constitution” that all members sign, as well as “a family counsel with one independent that helps us work together — and I think this is important to keep going.”

“The big question is can the Zegna model of a private family business survive the future? The answer is yes. Provided we stick together and keep sharing the values of the founder, follow the brand strategy and keep attracting talent for a well-managed organization until I pass the baton to the next generation.”

But before he passes that baton to the fourth generation, Zegna has made some dramatic moves that should position the company for future growth. That includes the acquisition at the end of August of the majority interest in Thom Browne for around $500 million.

Zegna said he’d been “looking for something that fit our strategy” and looked into Thom Browne. “I like what he does, I think he’s a great creator, founder, balanced designer. He’s extremely easy to relate to.”

Add to that the fact that Browne makes 70 percent of his collection in Italy.

Zegna believes there’s an opportunity to grow the brand’s women’s wear and licensed offerings and enhance its reach in Asia. Even so, he’s not expecting to be involved in the day-to-day operation of the business.

“I want to keep the business independent. It’s run very well by a good ceo and they can come to us if they need help,” he said. But he also expects his newest investment to generate growth since buying the stake was expensive.

“It’s a big responsibility. It was a big check and it means taking money from the family,” he said, “but the fourth generation was very much for it, more than my generation.”

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