Zegna Charts Course Through 'New Normal' with DTC Focus and Retail Expansion

MILAN — For Ermenegildo Zegna Group, navigating an era defined by geopolitical tensions and economic volatility requires more than luxury craftsmanship—it demands strategic foresight and operational flexibility. That’s the message from Gildo Zegna, who assumed the role of Executive Chairman on January 1, as the Italian fashion house releases its preliminary 2025 figures.

In a conversation with WWD, Zegna emphasized that a clear vision and proactive planning are indispensable in facing what he terms "the new normal." Despite acknowledging "nonlinear paths" ahead due to global instability, he struck an optimistic tone, buoyed by the group's robust direct-to-consumer (DTC) performance which helped offset a deliberate pullback in wholesale.

The group posted preliminary organic revenue growth of 1.1% to €1.91 billion for 2025, fueled largely by the Zegna brand's DTC channel. At current exchange rates, sales saw a slight dip of 1.5%. The fourth quarter showed resilience with revenues of €591 million, a 0.3% increase, or 4.6% organically.

"Forex remains a concern, and we hope U.S. tariffs have settled. The wars are ongoing, but we are serene. We must be agile, and my role is to anticipate change," Zegna stated, outlining a leadership philosophy centered on adaptability.

The transition at the top appears seamless. Gianluca Tagliabue, former CFO, now serves as Group CEO, while Zegna's sons, Angelo and Edoardo, have been appointed co-CEOs of the Zegna brand. "The changes were planned over time, so they did not bring confusion. There's clarity, energy, and good integration," Zegna noted, adding that his new role allows him more time for client engagement and strategic networking, such as upcoming plans to attend Art Basel Hong Kong.

A key highlight was the 4.2% rise in group DTC revenue to €1.45 billion, with Zegna and Thom Browne accelerating in the final quarter. Conversely, wholesale revenue fell 20.9% to €318.1 million, reflecting a strategic de-emphasis. Zegna pointed to the sequential improvement across all three brands—Zegna, Thom Browne, and Tom Ford Fashion—with the flagship Zegna brand seeing double-digit organic DTC growth in Q4.

The executive also highlighted the success of experiential retail concepts like Villa Zegna, describing it as a blend of "beauty, fun, and commerce." The model is set to expand with the first New York 'Salotto Zegna'—an exclusive personalization club—opening in early 2027 on Fifth Avenue. Zegna expressed particular confidence in the U.S. market, where group sales rose 7.9% to €566.1 million, accounting for 30% of the total.

Addressing Saks Global's Chapter 11 filing, to which Zegna Group is owed $26.3 million, both Zegna and Tagliabue downplayed the immediate impact. "Saks is an important partner... we have the business strength to absorb this," Zegna said. Tagliabue added that the bankruptcy has "limited impact on our sales," with the financial effect being a low-single-digit incidence on revenues.

Looking ahead, Tagliabue noted that foreign exchange headwinds of 2.6% in 2025 are expected to be similar in 2026 but can be mitigated through hedging. Pricing is set for a mid-single-digit increase due to currency fluctuations.

Brand Performance & Expansion:

• Zegna: Revenues reached €1.18 billion, up 1.5%. New stores are planned for Shenzhen Bay, Paris, Riyadh, and several U.S. locations.
• Thom Browne: Sales fell 14.7% to €268.5 million, impacted by challenges in China. However, Q4 organic sales grew 1.4%, with new CEO Sam Lobban steering a retail-first transformation.
• Tom Ford Fashion: Revenues rose 0.8% to €317.1 million. Zegna praised the "Haider effect," referring to creative director Haider Ackermann's work, with a Paris flagship slated for late 2026.

Regionally, Greater China saw a 14.6% decline to €435.2 million, attributed to softer performance at Thom Browne and Tom Ford. Tagliabue expects the market "to remain volatile" in 2026.

Despite the mixed landscape, Zegna's strategy is clear: deepen direct consumer relationships, invest in high-impact retail, and leverage the group's integrated supply chain to elevate all three brands. "If you have clear ideas and think in advance, you are prone to make fewer mistakes and you can see more opportunities," he concluded.

Reader Reactions:

Marcus Thorne, Retail Analyst, London: "Zegna's decisive pivot to DTC is a textbook response to modern luxury retail. The numbers show it's working, especially in the U.S. The focus on experiential retail like Villa Zegna isn't just a trend; it's a necessity for client retention in the high-end segment."

Chiara Fontana, Fashion Editor, Milan: "The generational transition here feels organic and well-planned. Gildo Zegna's ongoing involvement, coupled with the fresh energy of his sons and Tagliabue, provides stability while allowing for innovation. The 'Haider effect' at Tom Ford is one to watch closely."

David K. Miller, Independent Commentator: "Serene while wars rage and a key retailer files for bankruptcy? This is peak corporate optimism. The 20% wholesale plunge is glossed over as 'strategic,' and China's double-digit decline is handwaved as 'volatile.' The real test is whether this DTC bubble can sustain all three brands when consumer spending tightens."

Eleanor Shaw, Luxury Consultant, Hong Kong: "The attention to the APAC market's nuances, like noting the Lunar New Year timing shift, is telling. Their diagnosis for Thom Browne and Tom Ford in China—strengthening retail experience—is correct. Success hinges on execution, not just strategy."