Zegna and Ferragamo optimistic about future, yet prepared for challenges
Italian luxury mens fashion and accessories house of Ermenegildo Zegna anticipates high single-digit percentage revenue growth, led by customers from outside Europe, after record sales and profit in 2011, said the company’s eponymous chief executive officer. Asia will be the real growth propeller, followed by the U.S.,” Zegna said in a Jan. 14 interview before the Trivero- based company’s fall-winter 2012/2013 menswear show in Milan.
Standard & Poor’s decision last week to downgrade the sovereign credit ratings of nine of the euro area’s 17 members, including Italy, will hurt local demand for luxury goods on the continent, regardless of customers’ net worth, said Zegna. “It’s very much psychological,” Zegna said. “We have to be ready for bumps” until European leaders find a solution”.
Zegna plans to boost sales by introducing more leather accessories and extending its personalization service with more devoted space in stores, CEO Zegna said. The suitmaker will also open as many as 30 boutiques this year, including 10 in China and outlets in Africa, he said.
Zegna’s sales climbed 14 percent to 1.1 billion euros in 2011, the CEO said, citing preliminary figures. He declined to provide a number for profit, saying only that it reached a record. Demand was strongest in China, Korea and Southeast Asia, followed by the U.S., where sales rose by at least 10 percent excluding currency moves, the CEO said.
While GDP growth is slowing in China, demand for luxury goods is increasing in so-called second-, third- and fourth-tier cities, Zegna said. “I think this will continue but we do not expect a major slowdown in China,” he said. “We cannot expect to keep growing at 30 percent.”
The euro’s decline is boosting the value of sales in countries that use other currencies, said Salvatore Ferragamo SpA CEO Michele Norsa. The Florence-based company is “confident” for the year ahead after an “excellent” 2011, which included better-than-expected holiday sales, Norsa said yesterday before Ferragamo’s show.
adapted from Bloomberg