Zegna Chair Says Middle East Business Rebounding After Iran Conflict Disruption
Recent Developments and Business Outlook for Ermenegildo Zegna
Middle East Market Recovery
MILAN, May 18 (Reuters) - Italian luxury menswear group Ermenegildo Zegna has registered an upturn in Middle East business in recent weeks after disruption caused by the Iran conflict and expects the recovery to be complete after the summer, its executive chairman said.
Interviewed at a Financial Times luxury summit, Gildo Zegna said the hit to sales in the Middle East had been "substantial", but "less brutal" than anticipated.
Impact of Iran Conflict on Sales
Zegna, which like other brands has its biggest shop globally located inside the Dubai Mall shopping centre in the United Arab Emirates, suffered a decline in sales in March and the first part of April, he said.
Reuters reported in April that footfall at the Dubai Mall in March was down 50% from a year earlier.
Signs of Recovery
"It's picking up. Surely traffic is not where it used to be, but ... we see a gradual improvement, and hopefully by post summer time we'll be okay, so less brutal than we thought," he said.
Leadership Transition at Zegna
Zegna in January left the role of CEO of the family business to become chairman, entrusting the Zegna brand to his two children as co-CEOs, while promoting chief operating and financial officer Gianluca Tagliabue to be group CEO.
He said the transition had gone well so far, adding he would only relinquish his role "when I'm buried."
Future Strategy and Expansion
He ruled out any acquisitions for the group, which listed in New York in December 2021, or the Zegna brand expanding into womenswear.
Global Business Performance
Business in the United States, where sales have been growing at a double-digit pace for the past two years, is in line with the previous year, Europe is "doing pretty well" and China "slowly coming back," Zegna said.
China’s Market Outlook
"China will not be as we used to remember. However, I think that it is at a good state for business. Let's be happy with what we have, and let's nurture what we have."
(Reporting by Valentina Za, editing by Giulia Segreti and Gus Trompiz)