Zegna CEO still betting on China despite uncertain growth

Ermenegildo Zegna, the Italian fashion house listed in New York, is sticking with its expansion plans for China over the medium term despite uncertain timing on a possible economic recovery.

“Our 2-3 year growth strategy is not changing” even with a lack of visibility on a rebound in China, Chairman and Chief Executive Officer Ermenegildo Zegna said in an interview. “We might delay a few shop openings scheduled this year, but we’ll keep investing in marketing and made-to-measure services in the country.” 

The maker of suits, blazers and mens’ accessories on Wednesday reported first-half sales of €960 million ($1.1 billion), 6% higher than last year. Adjusted earnings before interest and taxes fell to €81 million. 

The CEO cited a “difficult” month in August, largely due to persistently sluggish growth in the key China market.

Over the medium term, Zegna is targeting growing sales for the recently acquired Tom Ford fashion business in markets where the brand is currently not a leader, including China, Japan and South Korea, the CEO said.

The company also wants to strengthen the Zegna and Thom Browne brands in the US and the Middle East, he said.

In China, the focus will be on tailor-made and personalized in-store offerings, Zegna said.