Total group revenue rose 6.3 percent year-on-year (YoY), reaching €960.1 million (~$1,068.87 million), largely driven by the ZEGNA brand, which achieved €566.1 million in sales, reflecting organic growth of 5.9 percent. However, Thom Browne’s performance was a concern, with revenue down 19.4 percent year-on-year, amid a challenging retail environment. In contrast, Tom Ford Fashion showed significant growth, recording €148.5 million in revenue, a notable 132 percent increase compared to H1 2023, albeit with operating losses due to substantial investments, the company said in a press release.
Ermenegildo Zegna Group reported a 40 percent decline in profit for the first half of 2024, to €31.3 million (~$34.84 million) from €52.1 million in the first half of 2023. Despite a 6.3 percent increase in revenue, driven by the Zegna and Tom Ford brands, profit margins narrowed due to strategic investments in marketing, talent and store expansion, as well as ongoing macroeconomic challenges.
Zegna's gross profit rose to €637.4 million, thanks to improved inventory management and the growth of the direct-to-consumer sales channel. Despite these advances, the group's operating profit fell to €73.1 million and its profit margin fell from 5.8% to 3.3%.
The luxury industry continues to face uncertainties, but Zegna expressed confidence in the group’s strategy, stating that continued investments in marketing, talent acquisition and store expansions are essential to unlock the full potential of its brands.
Looking ahead, Zegna stressed the importance of balancing cost controls with cautious operations as the Group navigates an increasingly complex global landscape.
Ermenegildo “Gildo” Zegna, President and CEO of the GroupHe said: “The first half of 2024 was marked by significant investments across our three brands to further strengthen and foster ongoing value creation for each of them. We continued to double down on the successful Zegna One Brand strategy, most recently exemplified by the Villa Zegna event in New York. We have taken decisive steps to reinforce the Thom Browne organisation both at headquarters and in key regions. And, at Tom Ford Fashion, we recently announced Haider Ackermann as the new Creative Director of Tom Ford, a combination we are confident will take the brand to new heights.”
“I believe that these steps are what our Group needs at a time when the luxury industry is going through an important phase of normalisation and continues to face macroeconomic and geopolitical uncertainties around the world. Our operating results for the first half, with an adjusted EBIT margin of 8.4% compared to 13.3% in the first half of 2023, were also impacted by our decision to continue investing in key projects, some of which were concentrated in the first six months of the year. Alongside these investments, we have also implemented cost controls while continuing to operate with due caution. Although the overall environment is expected to remain even more challenging, I am confident that our projects and actions are the right ones to unleash the long-term untapped potential of our three brands.”
Fibre2Fashion (KD) Press Desk
