Zegna Group reports negative financials for full year 2016
The year 2016 was one of consolidation for Ermenegildo Zegna, after the return as Creative Director of Alessandro Sartori, the designer who launched the Z Zegna label for the Italian luxury menswear group before moving to Berluti. The first two collections of the new Sartori era were presented in January and were well received, prompting Zegna to forecast a return to growth in 2017, thanks to, among other factors, “a new brand strategy, the group’s reorganisation and the ongoing economic recovery in China and Europe.”
“In the first few months of 2017 we have experienced a positive trend reversal,” stated in a press release the group’s CEO Gildo Zegna, who predicted for this year “a double digit growth on the Chinese, Russian and European market, as well as in travel retail.”
In a press release for the publication of the company’s annual results, the group reported a 7% sales slump at constant exchange rates, while the year before they had grown by 4%. In parallel, revenue fell from €1.261 billion in 2015 to €1.156 billion a year later.
Last year, Zegna generated a net income of €20 million, compared to €45 million a year earlier, posting a 55.5% decline (in 2015 the decrease was 36.6%). EBITDA reached €125 million, compared to €146 million in 2015 (-14.3%).
In the last few years, Ermenegildo Zegna has made significant investments in manufacturing facilities in Italy, and in 2016 it acquired high-end textile manufacturer Bonotto. The group has also strengthened its management team, especially in the marketing, merchandising and business development departments.
Alongside the deployment of a major omni-channel programme, to provide Zegna customers with a seamless experience between online and brick-and-mortar shopping, the group has also emphasised its ‘slow-fashion’ approach. It recently opened an atelier-apartment of over 100 m2 in the heart of Milan, where six Zegna tailors are on hand to offer a made-to-measure service, using unique fabrics to create “totally exclusive suits.”
As far as markets are concerned, exports still account for 90% of Ermenegildo Zegna’s total sales. Though China is still the menswear label’s main market ahead of the USA, Europe, Russia, Canada, Mexico and Dubai are catching up.
At the end of 2016, Zegna operated 513 stores, ten less than a year before, of which 287 were directly owned.