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A slump at Thom Browne dragged on parent company Ermenegildo Zegna Group’s performance in the first quarter of 2024.
Group sales declined 5.3 per cent year-on-year on an organic basis (excluding Tom Ford Fashion and currency exchange rates) to €463.2 million, the company said on Tuesday. Thom Browne’s revenues fell 34.4 per cent to €79.2 million, attributed to lower-than-expected direct-to-consumer sales in Greater China and the “streamlining” of its wholesale channel.
The Zegna brand’s revenues grew 6.8 per cent to €282.9 million, driven by footwear and leisurewear, the Americas and Japan.
Tom Ford Fashion, which the group acquired last April, brought in €65 million in revenue during the quarter, “reflecting good performance, mainly in the US”, the company said. The brand was consolidated into Zegna Group’s financial statements on 29 April 2023, so the group could not provide a year-on-year comparison for Q1.
The first collection of Tom Ford Fashion’s new creative director Peter Hawkings hit stores in March. “Initial signs are positive,” Gildo Zegna, chairman and CEO of Ermenegildo Zegna Group told analysts on Tuesday. In December, Zegna revealed its intention to make Tom Ford a top 10 global luxury brand.
By geography, the group’s revenues were boosted by 10.3 per cent growth in the Americas to €114.2 million. Sales in EMEA grew 6.5 per cent to €156.6 million; the Greater China region recorded revenues of €139.4 million, down 13.1 per cent; while revenues in the rest of APAC rose by 4.9 per cent, mainly driven by a strong performance in the Japanese market.
Zegna called the performance “reassuring given the challenges that the sector is facing”. LVMH reported 3 per cent growth in the first quarter (including a 6 per cent decline in Asia), however Kering has warned that group sales are expected to be down 10 per cent when it reports its Q1 earnings later this week.
“Looking at the rest of the year, we have a clear and defined path in front of us. I am confident that we are taking the right actions to make our brands even stronger and to deliver on our medium-term ambitions,” Zegna said in a statement.
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