Marking the luxury industry’s revival from pandemic lows, the company is going public through a SPAC on Monday.
Ermenegildo Zegna is bringing a new luxury product to the New York Stock Exchange: itself. And it is doing it in the most financially trendy way. On Monday, the Italian company known for its master of the universe suits will become, it says, the first Italian fashion brand to list on the exchange. It is going public by merging with a shell corporation known as a special purpose acquisition company, the Wall Street fad product better known as a SPAC. Zegna’s SPAC was created by Investindustrial, an investment fund run by Sergio Ermotti, the former chief executive of UBS. The offering may be the zenith of the luxury industry’s rebound in 2021 after the pandemic closed stores across the globe in 2020, causing revenues to plummet — so much so that Ermenegildo Zegna, Zegna’s chief executive who goes by “Gildo,” compared it to his “World War III.” But the arrival of vaccines set off consumer optimism that helped drive growth in the luxury market to nearly 30 percent over 2020, according to Bain Consulting Group, and Mr. Zegna said he and Investindustrial felt it was time to take advantage of the moment. And their move may, he said, start a new trend in the industry for 2022 as well as signaling Italy’s comeback to the world. This year “has been the year of Italy,” Mr. Zegna said in an interview on Friday at the Zegna boutique on West 57th Street in Manhattan. “It will be the year of our story. And I think for the rest of the industry as well. It’s a moment where Italy has an amount of energy that we want to create a position in the world.” He added, “We are the first one in fashion to go so maybe these will open up for more to come.” The deal, which values Zegna at about $3 billion, will give the company about $760 million in new funding while allowing its founding family to retain a roughly 66 percent stake. Zegna (pronounced ZEN-ya) now runs nearly 300 stores across the globe. It expects to bring in about 1.2 billion euros (or about $1.35 billion) 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 Alessandro Sartori. It also said the brand name would be “Zegna,” dropping the first name of its chief executive and Mr. Zegna’s grandfather, who founded the company. (“Personally, I’ve been affected,” he said, with a laugh.) It also unveiled a new double-striped logo, meant to harken back to Road 232 in the mountains of Northern Italy where Zegna was built. And it is increasing its focus on casual wear and digital content and outreach as the pandemic hastened changes already underway in how people dressed and interacted online. At the same time, it is repositioning itself as a pure luxury brand. Mr. Zegna said that even before Covid-19 and the decision to go public, the company had begun a strategic transformation, though the pandemic gave the plans new clarity, helping “prioritize focus” to the extent that they cut about 100 million euros of costs last year.
