Ermenegildo Zegna Group starts new fiscal year with decline in revenue

Italian fashion group Ermenegildo Zegna NV experienced a slight decline in revenue in the first quarter of fiscal year 2025. This was primarily due to continued weak demand in China and losses at the Thom Browne brand.

According to preliminary figures released by the company on Thursday, consolidated revenue for the period from January to March amounted to 458.8 million euros. This represents a 0.9 percent decrease compared to the opening quarter of the previous year. On an organic basis – i.e., adjusted for currency effects as well as changes in the Group's portfolio and licensing business – revenue declined by 1.2 percent.

Growth in direct retail cannot fully offset wholesale decline

Direct retail sales increased by 5.2 percent (organically +4.6 percent) to 345.1 million euros. However, this was not enough to offset a decline of 19.8 percent (organically -19.4 percent) to 79.5 million euros in the wholesale business. The company attributed the significant decline in this distribution channel, among other things, to the strategic streamlining of its wholesale business and the acquisition of some boutiques for direct operation.

The Zegna segment achieved a revenue increase of 2.6 percent (organically +2.2 percent) to 333.3 million euros, while the Tom Ford Fashion segment grew by 3.8 percent (currency-adjusted +3.5 percent) to 67.5 million euros. However, revenue for the Thom Browne brand declined by 18.6 percent (organically -18.8 percent) to 64.4 million euros. According to the Group, the significant decline was due in no small part to the targeted reduction of wholesale distribution.

Revenue declines in China and Europe

Revenue development continued to be hampered by weak demand in Greater China. There, revenue shrank by 11.6 percent (organically -12.4 percent) to 123.3 million euros. In the EMEA region, which encompasses Europe, the Middle East, and Africa, quarterly revenue stood at 154.1 million euros, 1.6 percent (organically -1.8 percent) below the corresponding prior-year level.

In contrast, the Americas saw upward movement. There, revenue increased by 9.5 percent (organically +8.9 percent) to 125.0 million euros. In the Asia-Pacific region outside of China, revenue rose by 6.5 percent (organically +8.4 percent) to 55.8 million euros, thanks in part to strong business in Japan.