Ermenegildo Zegna expects challenging future ahead
“We have to be ready for a bumpy ride,” Gildo Zegna, chief executive of Italian fashion house Ermenegildo Zegna, tells the Financial Times. High quality global journalism requires investment. Zegna expects revenue growth of slightly above 10 per cent this year, even as he warns that the Chinese market will grow more slowly than it has over the past decade. “The growth of 20 to 30 per cent we have seen in China can’t continue,” he says. “That doesn’t mean the market will stop growing, but it means we have to adjust to 10 to 15 per cent growth there. I wish every country we are in grew like that.”
Mr Gildo Zegna says: “Crisis is a word we have to keep in mind at all times and learn to live with it. My job is to do the best we can in the crisis, make the most of 2012 and then be ready for 2013. Don’t ask me about next year, it will be tougher than this one.” Revenues at Zegna rose 17 per cent at constant currency rates last year to €1.13bn, with China growing 28 per cent. Asian tourists shopping in Europe helped ensure a modest advance in revenue on the continent. Group sales advanced 21 per cent in 2010. To underline the importance of China for Zegna, which exports 90 per cent of what it produces, its CEO notes that Macau generates more revenue than Las Vegas. About a third of the 50 stores it is opening in 2012 will be in China. The slowdown in China has pushed the company to seek growth in new, and sometimes surprising, markets such as Mongolia, Nigeria and Morocco, where there are stores, and Mozambique, Kenya and Angola, where the company expects to open stores within two years.
In an interview to Italian media, Paolo Zegna told the company has no plans for an IPO and the company is relying comfortably on its own resources.