Zegna Group posts strong revenue growth in FY22

Image: Courtesy of Zegna In the fourth quarter, Zegna Group generated revenues of 407 million euros, a 0.5 percent decrease, bringing total revenues for FY 2022 to 1,493 million euros, up 15.5 percent. At cFX, revenues grew 11 percent and declined 2.9 percent in FY 2022 and in the fourth quarter, respectively. The group expects a moderate improvement in adjusted EBIT and a substantial improvement in profit for FY 2022 compared to 2021 despite significant headwinds in the GCR. Zegna targets 2 billion euros in revenues and 15 percent adjusted EBIT margin in the medium term, excluding the Tom Ford fashion business. Commenting on the results, Ermenegildo “Gildo” Zegna, chairman and CEO of the Zegna Group, said: “I am very pleased with how we performed during 2022, in spite of the continued global economic and geopolitical challenges of the year, as well as how we continued to stand by our commitments to the environment, our employees, and our communities.” “Despite China continuing to be affected by Covid-related restrictions throughout 2022, our growth for the year shows the soundness and success of our strategy, global reach, and flawless execution, with ongoing success in the Middle East, U.S., and Europe,” Zegna added. Zegna’s performance across segments The company said in a statement, excluding the GCR, which was affected by Covid-related restrictions throughout 2022, particularly from mid-March to the end of May and then again in the fourth quarter, revenues were up 42 percent for FY 2022, and up 24.7 percent for the fourth quarter. Revenues were up 38.6 percent and up 21.1 percent at cFX in FY 2022 and fourth quarter, respectively. The company added that growth in the fourth quarter was also affected by the end of the Tom Ford International distribution licence agreement with the fall/winter 2022 season deliveries, which had a negative impact on consolidated revenues for the fourth quarter of 2 percent year-over-year. Revenues for the Zegna segment, which includes Zegna-branded products as well as the textile and third-party brands product lines, reached 334 million euros in the fourth quarter, a decrease of 2.2 percent, with the drop in GCR direct-to-consumer (DTC) revenues and the end of the Tom Ford International distribution licence agreement more than offsetting strong performance in other markets. Zegna segment revenues for FY 2022 were 1,177 million euros, a 13.7 percent increase. The Thom Browne segment revenues in the fourth quarter of 76 million euros, up 11.5 percent. In FY 2022, the Thom Browne segment posted revenues of 331 million euros, up 25.3 percent year-over-year. Thom Browne saw women’s products growing slightly faster than men’s, while children’s almost doubled. Despite Covid-related restrictions and closures affecting the DTC channel, the company further said, positive performance was sustained by strong wholesale demand, e-commerce through T-Mall in China, and the contribution of 11 net store openings in 2022, bringing the total number of directly operated stores to 63 at the end of 2022. Zegna revenues by product line Zegna-branded product revenues were 274 million euros for the fourth quarter, down 2.7 percent, but up double-digit year-over-year excluding GCR, benefitting from the rollout of the One Brand collection in July 2022. Revenues for FY 2022 were 924 million euros, up 9 percent. Shoes showed strong performance throughout the year, while growth in the luxury leisurewear segment remained steady. Tailoring and made-to-measure both saw a strong rebound in 2022, especially in the U.S. and EMEA. Thom Browne revenues of 76 million euros in the fourth quarter, up 11.4 percent, bringing FY 2022 revenues to 330 million euros, up 25.3 percent driven by wholesale demand. Textile revenues were up 7.1 percent for the fourth quarter, reaching 38 million euros. Revenues for the year were up 33.8 percent to 137 million euros, with all the key subsidiaries experiencing healthy double-digit growth. Third-party brands revenues reached 18 million euros in the fourth quarter, down 18.8 percent, impacted by the termination of the Tom Ford International distribution licence which ended with deliveries of the FW 2022 collection, replaced by a supply agreement. Excluding this impact, third-party brand revenues were up by strong double-digits in the fourth quarter. Zegna expects the negative impact to be more than offset by the consolidation of the Tom Ford fashion business subject to and upon closing of the transaction with The Estée Lauder Companies, expected later this year. For FY 2022, third-party brands revenues were up 30.5 percent to reach 98 million euros, driven by higher Gucci orders and Tom Ford deliveries for SS22/FW22. Zegna revenue performance by core geographies Excluding the GCR, the group saw a 42 percent increase in revenues in FY 2022 driven by performance in Europe, the Middle East, and the U.S. Revenue growth was 24.7 percent in the fourth quarter, excluding the GCR. Activities in Europe, the Middle East, and the U.S. demonstrated the strongest growth in the fourth quarter. EMEA revenues in the quarter were 140 million euros, a 22.8 percent increase, of which the Middle East and Africa (MEA) region represented 24 million euros, a 34.9 percent growth, building on the region’s robust performance in the earlier quarters of the year. For FY 2022, EMEA revenues reached 520 million euros, up 36.8 percent year-over-year. Revenues from the Middle East and Africa (MEA) region constituted 69 million euros for the year, a 56.1 percent year-over-year growth. North America quarterly revenues increased 26.7 percent and amounted to 82 million euros, of which the U.S. made up 77 million euros, up 26.1 percent. Revenues in North America reached 295 million euros in FY 2022, up 54.1 percent, with the U.S. up 53.5 percent to 270 million euros. Group revenues in the GCR were down 30.3 percent, reaching 131 million euros. The decrease was 16.1 percent for FY 2022, with revenues of 494 million euros for the year. In FY 2022, DTC revenues for Zegna-branded products saw an 8.4 percent increase, reaching 773 million euros. DTC revenues for Thom Browne increased 5.1 percent to 146 million euros in FY 2022, pushed by high-double-digit performance in the U.S., EMEA, and Japan. The FY 2022 increases in DTC revenues come despite decreases of 6.2 percent and 10 percent for Zegna-branded products and Thom Browne, respectively, in 4Q 2022, as a result of the COVID-19 disruption in the GCR. For FY 2022, wholesale revenues reached 570 million euros, up 30.7 percent, with Thom Browne wholesale revenues growing 47.7 percent for the year to 184 euros and Zegna-branded product wholesale revenues growing 12.6 percent for the year to 151 million euros. In the fourth quarter, the group saw growth across the wholesale channel, with revenues totaling 132 million euros, a 16.1 percent increase. This is attributed to wholesale growth for Thom Browne of 62.4 percent during the quarter and consistent growth of 20.7 percent for Zegna-branded products during the quarter. At the end of FY 2022, DTC revenues represented 62 percent of total sales, down from 66 percent in FY 2021, as a result of the disruptions affecting the GCR, which is mainly a retail market.
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VIA Outlets reports record 2022 brands sales of 1.2 billion euros

Image: Landquart Fashion Outlet | Credit: Via Outlets European shopping mall operator VIA Outlets enjoyed a “record-breaking” year in 2022 with brand sales across its portfolio increasing 2 percent year-on-year to reach 1.2 billion euros. That figure was also 3 percent above pre-pandemic levels from 2019. The company, which operates 11 outlet shopping centres in nine countries across Europe, said visitor expenditure last year was 27 percent higher than 2019 levels. VIA Outlets CEO Otto Ambagtsheer hailed a “robust” recovery for the company in the wake of the pandemic. “As European tourism continues to slowly grow back to previous highs, we are hopeful that this will further bolster our centres’ already strong performance,” he said. VIA Outlets inked more than 300 remerchandising deals in 2022, welcoming a variety of new international brands. American Vintage, Sandro, and Maje at Batavia Stad Fashion Outlet, and Longchamp at Freeport Lisboa Fashion Outlet were particular highlights, the company said. A number of brands also upsized their footprints across Via Outlets’ store estate, including Lacoste (29 percent), Jack & Jones (12.7 percent), Guess (9.7 percent), Gant (8.5 percent), and Tommy Hilfiger (7.3 percent). The company said: “Remerchandising and attracting new and enticing brands are central to VIA Outlets’ ‘3Rs’ strategy of growth: a successful formula that has enabled it to continue to strengthen its premium fashion outlet offering across Europe.”
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GIZ coordinator: “Low labour costs alone will not guarantee Bangladesh's economic development”

Interview Werner Lange, GIZ cluster coordinator, Bangladesh. Image: Sumit Suryawanshi for FashionUnited What are the advantages of Bangladesh as a sourcing location, how has the situation changed since the Rana Plaza disaster and what does the future hold for the world’s second largest sourcing country? FashionUnited discussed these and other questions with Werner Lange, cluster coordinator at the German association for international development (Deutsche Gesellschaft für Internationale Zusammenarbeit GIZ GMbH) in Dhaka, Bangladesh as part of Made in Bangladesh Week. Could you describe your career path? What brought you from the German retail landscape to development work in Dhaka? I started my career at department store chain Karstadt and stayed there for more than two decades. In my late twenties, I gained first-hand experience with global sourcing markets as a central textile buyer. In my mid-thirties, I became purchasing director and ten years later, I was active at board level. After the merger of Karstadt and Quelle, I switched to the Metro subsidiary Adler Modemärkte and Charles Vögele Holding, which I left in 2012. It was more of a coincidence that GIZ approached me about the Partnership for Sustainable Textiles, which was founded in October 2014 and was looking for an industry insider as consultant. The task, as head of the secretariat, with my team, was to bring about an action plan that could be agreed upon by all interest groups. It was completed after about six months. I stayed on and continued at GIZ as cluster coordinator for the portfolio of textile projects in Dhaka, Bangladesh. From Bonn to Bangladesh is quite a jump. How did that happen? My wife and I have four children who are all very fond of travelling and living abroad - at times, none of them lived in Germany. Two of them were in Asia and we often visited them. My wife and I then also decided on Asia to live for a while. In addition, when I was young and working at Karstadt, I was already a central buyer and directly experienced the global advance of textile manufacturing and thus all places in the world where clothing can be produced – so I knew what I was getting myself into. Dhaka was the opportunity to make a difference, because Germany is the strongest export market and has a very large portfolio in development cooperation. This is incomparable worldwide and all relevant stakeholder groups are on site. What is the approach in Bangladesh? As a global service provider of international cooperation for sustainable development and international educational work, GIZ and its partners develop effective solutions that offer people prospects and permanently improve their living conditions. As a non-profit federal company, it supports the federal government and many other public and private clients in a wide variety of subject areas - from economic and employment assistance to energy and environmental issues to the promotion of peace and security. For the further development of Bangladesh, vocational training will expand our portfolio in the future. In Germany, the dual system of education is supported by companies and their chambers. There is no comparable infrastructure here. That's why we're trying to apply and develop elements of dual training as best we can. The local industry needs to get even more involved here. For example, we want to introduce occupational safety officers as a job description, but we are still in the conceptional phase. What has been the country’s growth since the Rana Plaza disaster? In the end, the terrible accident has had many positive side effects. The export companies have massively improved occupational and building safety. The buyers’ simple logic of “comply or you're out” has changed many things. There is no such thing as “the textile industry” in Bangladesh; the situation is more diverse - there is much more light and unfortunately there are still shadows. Too many factories do not yet meet the standards and government audits and controls needs to be improved. Although the Bangladesh Accord had to leave the country, its successor organisation RSC [RMG Sustainability Council] gives reason to be hopeful, because the local industry associations and unions are now sitting at the same table with the buyers and want to continue the Accord’s success. As the world's second largest clothing manufacturer after China, Bangladesh inevitably has the role of becoming a technology and innovation leader. The example of Turkey shows that garment production can eventually also lead to the manufacturing of textile machines. I see future potential for Bangladesh here. What are the advantages in Bangladesh? Bangladesh has the great advantage that with 165 million people, it has a large workforce that is willing and able to work. For further growth and foreign investment, it must be ensured that these people can work together under safe and fair conditions and with equal opportunities for men and women. Low labour costs alone will not guarantee Bangladesh's economic development. In cooperation with the Technical University in Dresden, Germany, the BGMEA’s Innovation Center is looking at the correlations between working conditions and productivity from a psychological point of view. Research findings from Germany show, for example, that the productivity of mixed-gender teams is significantly higher. The garment industry in Bangladesh was and still is in the limelight and consumers have now realised that a t-shirt for 2 euros cannot guarantee fair wages. But this also applies to other industries that are not yet on the radar. In your opinion, how will things develp in Bangladesh? Currently, the supply is still greater than the demand and foreign direct investments (FDIs) are not yet as numerous as expected because the issue of compliance still raises question marks. The question now is, with how broad a perspective do we look at Bangladesh, or do we continue to follow the same narrow and undifferentiated textile narrative?
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Vince Holding to appoint new CFO

Image: Vince, Facebook Vince Holding Corp., a multi brand fashion conglomerate, has announced its chief financial officer David Stefko will be retiring from his role and stepping down from the company February 10, 2023. Amy Levy, Vince’s current senior vice president, financial planning and analysis and investor relations, will succeed Stefko, who is set to remain with the company in an advisor role through May 2023. In a release, chief executive officer Jack Schwefel thanked Stefko for his eight years at the company, noting that he had been “instrumental” in leading Vince as interim CEO prior to his joining. Schwefel continued: “He had helped to transform our business and grow the Vince brand while developing a strong team of experienced leaders. We appreciate his continued support and guidance, and wish him all the best in his retirement.” The head also commented on Levy’s appointment, calling her an “integral part” of the company’s leadership team and crediting her with building a strong financial department. In her current role, Levy oversees multiple functions including Vince’s treasury, investor relations and finances for all facets of retail, wholesale and corporate planning. Prior to Vince, Levy served as a senior member of the finance team at Michael Kors, and also held a role on the finance team of Esprit.
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