Ermenegildo Zegna reveals growth ambitions for Tom Ford

Ermenegildo Zegna has revealed big growth ambitions for its newest acquisition Tom Ford, including a 10% growth in revenues in the medium term as well as a push into new categories and more retail stores.

At its second Capital Markets Day at the New York Stock Exchange yesterday the Italian menswear group said it would be "capitalising on the potential of the [Tom Ford] brand, whose strength today is much larger than its business".

Zegna's plans for the brand, include the opening of new global flagships with Beijing, Singapore, Rome and St. Moritz confirmed as locations. Total store count will lift to 100 (from around 50 today) while existing stores will also be revamped. APAC and Europe are the particular target markets for retail expansion.

Menswear makes up for around 70% of Tom Ford's ready-to-wear sales but Zegna intends to push growth in womenswear, as well as explore new verticals, such as home and fine jewellery.

Tom Ford already has a hugely successful beauty and fragrance business, which is now part of the Estée Lauder Companies group, who acquired the brand from its founders Tom Ford and Domenico de Sole a year ago in a £2.2 billion deal. Lauder then entered into a long term licensing agreement with Zegna to produce the brand's ready-to-wear and Marcolin to produce sunglasses. Zegna had already been producing fashion under licence for Tom Ford since the brand was established by its founders in 2005 with womenswear introduced in 2010.

In the five months since Tom Ford ready-to-wear has been officially under Zegna's wing under the new agreement with Lauder, it has generated €139 million in revenue. As well as its own label, Zegna also owns American designer Thom Brown's line and the company said its experience in growing that brand set it in good stead to deliver on its ambitions for Tom Ford.

Ermenegildo “Gildo” Zegna, Chairman and CEO of the Zegna Group, said: “Earlier this year we have added another incredible name to our portfolio: TOM FORD FASHION, which has become the third pillar of the Group. Our results so far demonstrate our ability to execute on the ZEGNA and Thom Browne strategies. This is why, as we start to execute on TOM FORD FASHION, I am confident in our ability to deliver on the objectives we are sharing today for the Group as part of our business strategy, building on the strong portfolio of our three complementary luxury brands and on the different stages in their growth cycles.”

Elsewhere the Zegna group, which launched on the New York Stock Exchange in 2021, said it aimed to deliver over 10% compounded annual revenues growth (CAGR) in the medium term, with adjusted EBIT CAGR of around 20%. This would generate significant cash surplus even while taking into consideration higher, targeted investments in marketing and capital expenditure to enhance brand desirability and drive growth, the company said.

At Thom Browne, which is celebrating its 20-year anniversary, the group expects "a high teens compounded average growth in DTC revenues in the next years, with a streamlined wholesale distribution".