To further secure its supply chain, Zegna has teamed up with Prada this year to each buy 40% of Italian cashmere producer Filati Biagioli Modesto, and Mr Zegna said Zegna could use the proceeds from the IPO. to invest more in Italian textile manufacturing.
The coronavirus pandemic: what you need to know
Production control has the added benefit of ensuring traceability and sustainability, a growing concern of the younger generation of customers Zegna courts. One of the brand’s most famous assets is Oasi Zegna, the vast Italian park in Trivero, Piedmont, the brand’s hometown, which was created by the founder of Zegna to preserve the local ecosystem that is 30 times the size of New York’s Central Park (as the company boasts in the investor deck it put together for PSPC). During the interview, Mr. Zegna proudly pointed out his sneakers, made from recycled components, and the fact that the brand now has a program to reconfigure the scraps of fabric left on the cutting room floor so that ‘they are no longer wasted.
But even with quality and the supply chain on its side, Zegna, as a state-owned company, will be in competition with the French luxury giants who have spent decades unearthing the world’s best-known brands. LVMH Moët Hennessy Louis Vuitton, which has built a stable of more than 75 brands including Tiffany & Company, Dior and Pucci, has achieved a market capitalization of nearly $ 400 billion. Kering, owner of labels like Gucci and Saint Laurent, is worth nearly $ 100 billion.
“Part of the reason we did what we did is because of the scale,” Zegna said of the decision to go public. “Ladder – this is our program – don’t ask me what the ladder would be, but surely bigger than it is now.” “
He couldn’t be invited to discuss future acquisitions, but Zegna made one of his first steps towards that to-do list with his 2018 acquisition of New York-based fashion label Thom Browne, whose shrunken costumes and a penchant for tongue-in-cheek interpretations of preppiness made him popular with a client group younger than Zegna’s main clientele. Since becoming part of Zegna, the brand has enters children’s clothing, with a strong presence in Korea and China, and Mr. Zegna said there were plans for further expansion. (Mr. Browne, who remains the brand’s creative director, and Rodrigo Bazan, its chief executive, will join Mr. Zegna in ringing the opening bell for the New York Stock Exchange on Monday.)
A collaboration with high-street American streetwear brand Fear of God in 2020 also helped boost Zegna’s cool factor, and Mr. Zegna said there were more limited-edition collections in the works.
China, which has contributed to the resurgence of luxury, remains crucial to the growth of the fledgling group, Zegna said. Although Chinese tourism was the engine of the industry’s growth before the pandemic, the market has shifted to a local model, Zegna said. Sales of luxury goods in China have doubled since 2019, according to Bain, and the region accounts for about 21% of the global market. Zegna, which established itself in China in the 1990s, now carries out around half of its activities in the greater region.