MILAN — Lifted by gains in its most important markets globally, Ermenegildo Zegna Group closed its centennial year with a net profit that more than tripled and sales that hit the $1 billion mark.
This story first appeared in the May 6, 2011 issue of WWD. Subscribe Today.
Last year, net profit reached 60 million euros, or $79.2 million, compared with 17.3 million euros, or $24 million, in 2009. Revenues surged 21 percent to 963 million euros, or $1.27 billion.
Dollar figures were converted from the euro at average exchange rates for the periods to which they refer.
In addition, retail sales in the first quarter of 2011 showed 21 percent growth at constant exchange rates. “We are in a leading position in global luxury retailing, we are kicking off the year on a good note and our geographical markets are well balanced,” chief executive officer Ermenegildo Zegna told WWD. Exceptions were Japan, following the earthquake, tsunami and nuclear disaster in March, and Spain, he said.
Last year, sales to Asia accounted for 46 percent of total revenues, led by China, the group’s most important market in terms of retail sales, where the company has 70 stores, and which grew over 30 percent. In China, the company opened four new stores designed by Peter Marino, including a flagship in Shanghai, its largest store to date. By the end of 2011 or early next year, Zegna may enter China with an online store too, as well as products specifically for that market.
The men’s wear brand broke into e-commerce in December, launching an online store operated by Yoox.
In 2010, revenues gained 10 percent in the U.S., the company’s second largest market, and Zegna said he expected the American market to grow “much more in 2011.” Stores in Manhasset, Long Island, and Las Vegas opened in the U.S. last year. This year, openings include Atlanta; Short Hills, N.J., and Philadelphia. Sales also rose in Europe, in Germany, Italy and the U.K. in particular.
Zegna noted how Turkey was also strongly contributing to revenues. “Turkey is the European China,” he said. The company is planning special events in Beijing in September and in Istanbul in October, and limited edition products for both Turkey and China to mark the 20th anniversary of its arrival in each of those two countries: watches produced by Sowind Group, which owns the Girard-Perregaux and JeanRichard brands, which also made Zegna’s special Centennial watch; a mobile phone with Vertu, and suits in superfine wool with particular motifs, such as the bamboo suit, for China. These items will be in stores in about two months for the fall season.
Zegna, which has a network of 560 owned and franchised stores worldwide, plans to open about 20 units this year, half of which will be in China and the others in new markets such as Vietnam and South Africa, as well as India, the U.S. and Europe.