Salem Radio Network News Wednesday, February 28, 2024

Business

Zegna targets over 10% yearly sales growth after Tom Ford deal

MILAN (Reuters) – Ermenegildo Zegna aims to grow its sales by more than 10% a year on average over the medium term, with profits rising twice as fast, after it bought U.S. brand Tom Ford Fashion earlier this year, the Italian luxury group said on Tuesday.

The family-owned group, which debuted on Wall Street in late 2021, targets growth of around 20% in adjusted operating profit and a strong cash surplus in the next few years, it said at a presentation of its strategy to investors.

Zegna listed in New York by merging with a special purpose acquisition company backed by Italian private equity firm Investindustrial, It has no plans for a dual listing in Milan, Chairman and Chief Executive Gildo Zegna said on a call with journalists.

Based in the northwestern Italian region of Piedmont and famous for its tailored suits, it took control of Tom Ford Fashion operations as part of Tom Ford’s acquisition by Estée Lauder in early 2023.

Zegna ruled out further acquisitions for now. “For the time being we are focused on developing our three beautiful brands,” he said at a press briefing at the company’s Capital Markets Day.

The group controls Italy’s luxury menswear brand Zegna and the U.S. labels Thom Browne and Tom Ford Fashion.

Gildo Zegna said that the group was ahead of plans presented at the previous Capital Market Day in 2022, when he set a medium-term target of more than 2 billion euros ($2.2 billion) in sales and an adjusted EBIT margin of at least 15%, excluding the Tom Ford Fashion segment. “We are very confident in (the) group’s momentum in the medium term,” he added.

($1 = 0.9248 euros)

(Reporting by Claudia Cristoferi; Editing by Valentina Za and Emelia Sithole-Matarise)

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