Zegna CEO confirms demand for luxury returning in China
Ermenegildo Zegna SpA said Chinese demand for its luxury products rebounded in the fourth quarter, boosting 2012 sales growth and easing concern that the Asian nation’s leadership transition may continue to weigh on revenue.
“We saw a change of trend,” the eponymous chief executive officer of the Trivero, Italy-based company said in a Jan. 12 interview before Zegna’s fall-winter 2013 fashion show in Milan. “The slowdown in China lasted for about a quarter.”
While revenue growth is not yet back to where it was a few years ago, “people came back to buy” in the last three months of 2012, Zegna said, adding that smaller cities in China continued to outperform Beijing and Shanghai. “Overall, I hear good news from other brands too in China.”
Preliminary figures for 2012 suggest that Zegna’s sales advanced 11 percent to 1.25 billion euros ($1.67 billion) from 1.13 billion euros a year earlier, the CEO said, adding that full-year profitability was “pretty good.” A decision to limit discounts in Europe and the U.S. restrained revenue growth in those regions, which nonetheless benefited from purchases by wealthy visitors from Asia, Brazil, Mexico and Russia, the CEO said. Demand from those regions has continued this month, he said, citing strong sales of Zegna’s most expensive sportswear as well as leather accessories.
adapted from Bloomberg