The New York Stock Exchange will soon have a new luxury product. It is doing it in a trendy way.
The first Italian fashion brand to list on the exchange will be the Italian company known for its master of the universe suits. It is going public by merging with a shell corporation that is a Wall Street fad. The former chief executive of UBS is the leader of the SPAC.
The offering may be the zenith of the luxury industry's rebound in 2021, due to the closing of stores due to the Pandemic in 2020, which caused revenues to plummet, according to the chief executive of the company.
The arrival of vaccines set off consumer optimism that helped drive growth in the luxury market to nearly 30 percent over the next five years, according to Bain consulting Group. He said that their move may start a new trend in the industry for 2022, as well as signaling Italy's comeback to the world.
The year has been about Italy, Mr. Zegna said in an interview on Friday. It will be the year of our story. I think for the rest of the industry as well. Italy has a lot of energy that we want to use to create a position in the world.
He said, "We are the first one in fashion to go so maybe these will open up for more to come."
The deal will give the company $760 million in new funding and allow the founding family to retain a 66 percent stake. There are nearly 300 stores run by Zegna. It expects to bring in about 1.2 billion euros in sales this year.
Last month, Zegna announced that it was folding its three lines into a single collection with a premium price point under the global creative leadership of the designer. The first name of the company's chief executive and its grandfather will be dropped in favor of the new brand name "Zegna". He said that he had been affected.
The double-striped logo was designed to evoke the mountains of Northern Italy where the company was built. As the Pandemic made changes already underway in how people dressed and interacted online, it is increasing its focus on casual wear and digital content. It is changing its name to a pure luxury brand.
The company had begun a strategic transformation before Covid-19 and the decision to go public, but the Pandemic gave the plans new clarity and helped prioritize focus.
The perception of the brand needs to be moved from a clothing brand to a luxury brand, according to Mr. Zegna. The collection is more focused. I think it is more enjoyable.
This is due to the growing proportion of sportswear it is offering, as it expands beyond the formal suit for which it is best known. Mr. Zegna pointed to the thin beige turtleneck he was wearing under the plush beige Cashmere overshirt. He said that he could not stand the idea of traditional button-downs anymore. According to an investor presentation, leisure wear generated half of the company's sales this year, up from 38 percent in 2016
The customer has changed over the last few years, according to Patrick. The sportswear has become a little more luxurious, and Mr. Duffy said he had seen shoppers go from focusing on a formal tailored fit to a younger hipper guy who is getting more into the sportswear.
In this new realm, Zegna competes directly with other Italian prestige brands like Brunello Cucinelli, which went public in Milan in 2012 and has been one of the defining successes of the fashion sector.
Luca Solca, a retail analyst with Bernstein in London, said that Zegna is trying to build themselves a space in the formal and elegant market. They have done a lot of homework to be more credible and appealing outside of formal wear, and I think they have gone a long way with that work. Mr. Solca said that shift may be one of the biggest challenges of the organization.
The image is.
The New York Times reported that the store in Manhattan is one of the 300 stores of the brand.
The textile manufacturer believes that it will be able to make the shift. Gucci, Prada, Chanel and Dior are just a few of the world's premier brands that the brand's mills provide luxury materials for. Mr. Zegna is a shareholder of Tom Ford and is on the board.
The I.P.O. could be used by the company to further invest in Italian textile manufacturing.
The younger generation of customers are more focused on the benefits of ensuring traceability and sustainable production. Oasi Zegna, the Italian park in Trivero, Piedmont, is one of the brand's most celebrated assets and is 30 times the size of New York's Central Park. The brand now has a program to reconfigure the scraps of fabric left on the cutting room floor so they no longer go to waste and Mr. Zegna proudly pointed to his sneakers, made from recycled components.
Even with quality and supply chain on its side, the public company will be competing with the French giants of luxury that have spent decades plucking up the world's best known brands. A stable of over 75 brands, including Tiffany & Company, Dior and Pucci, has grown to a market cap of $400 billion. Kering is the owner of brands like Gucci and Saint Laurent.
The decision to go public was made because of the scale. Don't ask me how big scale would be, but surely bigger than what it is right now.
He could not talk about future acquisitions, but he did mention that the New York fashion label of the same name was one of the first steps toward that goal. The brand has gone into children's wear with a strong presence in Korea and China, and Mr. Zegna said there are plans for further expansion. The brand's creative head, Mr. Browne, and its chief executive, Mr. Bazan, will ring the opening bell at the New York exchange on Monday.
The collaboration with Fear of God in 2020 helped heighten the coolness of the brand, and Mr. Zegna said there were more such limited edition collections in the works.
China is crucial to the group's growth, Mr. Zegna said. The market has shifted to a local model despite the growth of Chinese tourism. Bain says that China has doubled the sales of luxury goods in the last year. In the greater region, Zegna does about half of its business.
The Chinese customer in China should be taken care of. This approach will be the approach of 2022. For Africa, Europe, Japan, the Middle East, and America.
In the past, Italian luxury brands have listed on the New York exchange, but in the past, Italian fashion brands have opted for Hong.
Mr. Zegna wants to change that pattern. He said that the New York Stock Exchange was the most powerful stock exchange in the world. His own ambitions are reflected in it.
He hopes to have given the example of a new trend of being proud of the Made in Italy origin of the family business. I think we have raised the bar by meeting the challenge of New York. We are ready to leave.
