PARIS — Encouraged by strong demand in China, early signs of recovery in the U.S. and brand activities linked to its centennial year, Ermenegildo Zegna anticipates growth in 2010 after a challenging 2009.
This story first appeared in the April 29, 2010 issue of WWD. Subscribe Today.
Store sales at the Milan-based company increased more than 20 percent in the first three months of 2010, Zegna said Thursday.
“Our results [achieved] in a dramatic economic crisis…give us new strength for recovery, of which we are starting to see some positive signs, especially in the American market,” chief executive officer Gildo Zegna said.
The family-run company reported details of its 2009 financial results, including a 72.2 percent decline in net profits to 17.3 million euros, or $24.1 million, on sales that fell 8.4 percent to 797 million euros, or $1.11 billion.
In 2009, earnings before interest, tax, amortization and depreciation (EBITDA) totaled 85.4 million euros or $119.1 million. The company did not provide EBITDA for 2008.
Dollar figures have been converted from the euro at average exchange rates for 2009.
“We managed to significantly improve our already positive financial position thanks to a strong effort to contain costs and reduce working capital,” Zegna said. “This required personal and practical sacrifice for both employees and our family, but we started the new decade more determined and aggressive than ever.”
The firm said it would continue to intensify its investments this year. Growing its retail network remains its most important strategic initiative. Ermenegildo Zegna, which has 550 stores worldwide, plans to add 20 stores in 2010, half of them in China, the brands biggest market.
China will also see four new Peter Marino-designed flagship openings throughout the year, including the largest store to date in Shanghai, which is to open this summer. A fifth Peter Marino flagship will launch in Las Vegas before the end of the year.
The company said it would also return to investing in Europe, with openings planned in Monaco, Vienna, Amsterdam and Athens. A store will also bow in Brasilia this year.