Zegna takes off in 2011, turnover exceeds one billion euros for first time

The textiles group Ermenegildo Zegna, specialist in luxury menswear, published a “historic” annual report this Wednesday by continuing its strategy of heavily expanding its distribution network and exploring new markets. For the first time in its history, the brand, based in Biella, (Piedmont) saw its turnover exceed one billion euros (1.3 billion USD), an objective which it set for itself in its 2010 centenary year.

The group’s turnover for 2011 stands at 1.127 billion euros (1.49 billion USD) – up by 17% compared to 2010 – 90% of which was achieved by exports, and half of that to Asia. It achieved net profit of 115.1 million euros (152 million USD) (+91.5%) and earnings before interest, taxes, depreciation and amortization (Ebitda) of 233 million euros (307.9 million USD) (+66%), whilst strengthening its net financial position which increased to 245 million euros (324 million USD). In the light of its results, the group decided to give a bonus of 1,000 euros (1,322 USD) to each of its 7,000 employees.

Zegna’s real motor of growth is its network of retail points of sale, which is invested in heavily since 2005. At the end of 2011, its total number of stores stood at 557 of which 311 are fully-owned. “We have achieved these results because we’ve never stopped investing in stores”, explained recently the group’s director, Ermenegildo Zegna, who was very satisfied with the double-figure growth recorded over the whole of his retail network.

China confirmed its position as the label’s biggest market with an increase in sales of 28%, followed by the USA with sales up 16%. Europe also showed positive results, thanks to Germany, France and Italy bouncing back owing to tourists’ shopping, as well as Russia and Eastern Europe. Zegna plans to open around fifty stores in 2012, two thirds of which will be in China but also in Europe and America and “new and particular attention” being given to Africa, he said in a press statement, announcing store openings for the first time in Morocco and Nigeria.

The Piedmont-based brand also announced that Jing Ulrich – director and president of global markets for JP Morgan China – will be joining its board of advisors as an independent consultant. She is one of best reputed consultants for international private equity funds and large multinationals. “The addition of Jing Ulrich to our board of advisors will, I am sure, be of great assistance to us on the Asian market which is destined to become in the next few years the driver of the global economy,” said Ermenegildo Zegna. Owing to her in-depth knowledge of consumer habits in Asia, she will certainly contribute to the progression of the label in that area.

But the arrival of Ulrich, one of the world’s most powerful women according to the American magazines Forbes and Fortune, in Biella indicates above all a step in the direction of a listing on the stock market by Zegna…for the time being, though, the group has acquired a 3% stake in the Italian luxury cashmere label Brunello Cucinelli, which has just been listed on Milan’s stock market.

(1 Euro = 1.3229 U.S. dollars)



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