Decline in Zegna Group earnings attributed to Thom Browne label's troubles
The Ermenegildo Zegna Group, a prominent luxury fashion conglomerate, has revealed its first-half financial results for 2024, showcasing increased investments in talent, store network development, and the consolidation of Tom Ford Fashion segment results. Despite these investments, the Group's revenue witnessed a 6% growth, reaching €960.1 million, with the Zegna brand experiencing a 2.5% revenue growth. However, Thom Browne faced a 19.7% revenue decline in the same period. The financial performance of the Tom Ford Fashion segment, consolidated in April 2023, demonstrated a more significant shift. The H1 adjusted EBIT for the segment plunged more than 375% to a negative €11.9 million from a positive €4.3 million in H1 2023. Ermenegildo Zegna, group chairman and CEO, acknowledged the first half of 2024 as a period marked by substantial investments in all three of their brands. He did not, however, provide specific details about these key projects. In a move to bolster the Tom Ford Fashion segment, Haider Ackermann, a Colombian-born French fashion designer, was recently appointed as the new Creative Director. Ackermann leads the brand's global fashion strategy under the Zegna group and will debut his first collections in 2025. The CEO expressed confidence that the projects and actions taken by the company are the right ones to unlock the untapped long-term potential of all three of their brands. He also stated that the luxury industry is going through an important normalization phase and faces macroeconomic and geopolitical uncertainties worldwide. To manage costs, the company has implemented cost controls while continuing to operate with appropriate caution. Selling, general and administrative expenses and event-related marketing costs impacted the Group's revenue more in the first half of fiscal 2024 than in the previous year. As a result of these factors, the Ermenegildo Zegna Group's adjusted EBIT fell 33% to €80.9 million in the first half of fiscal 2024, and Ermenegildo Zegna's profit decreased by about 40% to €31.3 million ($34.8 million). By segment, H1 adjusted EBIT for the Zegna brand dropped 15%, while adjusted EBIT for Thom Browne fell 36% in the same period. It is important to note that this article does not provide any new financial data for the Ermenegildo Zegna Group's revenue or adjusted EBIT for the full fiscal year 2024. Additionally, it does not mention any recent appointments or changes in leadership within the Ermenegildo Zegna Group. The CEO did not provide any specific details about the key projects the company is investing in, and the article does not contain any new information about the consolidation of Tom Ford Fashion, which occurred in April 2023. Despite these challenges, the Ermenegildo Zegna Group remains committed to its strategic investments in talent and brand development, with a focus on unlocking the long-term potential of its luxury fashion brands.
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