Zegna closed 2023 well on Wall Street, while Dolce&Gabbana announced investments in the beauty segment. Luxury players are publishing their financials and there are signs of growth, but product categories pushing the results vary greatly. Ermenegildo Zegna Group (owner of brands Zegna and Thom Browne and operator of the exclusive licensing agreement of Tom Ford Fashion) shows incredible growth, especially in the menswear segment (revenue up 27.6% on yearly basis to 1.9 billion euro for 2023). Meanwhile, the company owned by Domenico Dolce and Stefano Gabbana, appears to be putting accessories in second place. The beauty segment will be repositioned “to fit other product categories of the brand”. It’s an ambitious plan, given that the brand aims to reach 4 billion in sales in the beauty segment by 2026/2027.
Zegna takes off in Wall Street
Zegna is celebrating solid results on all fronts. “The admiral brand and Thom Browne showed great dynamism on a global scale – commented CEO Gildo Zegna in an official press release -. Encouraging signs are also emerging for the EMEA region, USA and China”. The group closed 2023 with a 19.3% organic growth, while just in the 4th quarter revenue reached 570 million euro, up 40.1% on yearly basis. The group thus managed to consolidate its position on Wall Street, with a Nyse index just below the 2-billion target.
Retail growth
“The significant increase of revenue in 2023 – continues Zegna -, especially within our directly operated stores, is a clear sign that demand for our brands remains strong”. Solid results were also achieved by Tom Ford Fashion, which generated 236 million euro of sales, 97 of which in the last quarter.
Dolce&Gabbana’s different strategy
The goal for Dolce&Gabbana is tied to a different strategy not tied to fashion accessories. Yet, it seems the reference segment is ripe with opportunities. The brand aims to reach 4 billion in retail sales by 2026/2027 in the beauty segment, as said by the Operating CEO of Dolce & Gabbana Beauty, Gianluca Toniolo (source Milano Finanza). “We achieved 150% of our first-year target. We generated 1.5 billion in retail sales compared to the 1-billion forecasted”. The make-up line will be launched in Spring, with over 100 million euro invested for communication activities (in photo).
Lipstick effect for D&G
D&G is the first Italian brand to choose to internalize the segment, managing fragrances and make-up directly. The next step will be to enter the cosmetics’ segment. “A very important operation that will strengthen brand perception – said to MFF Toniolo -. While launching fragrances can be seen as a sprint race, make-up is a marathon”. So much for the “lipstick effect”, meaning the theory according to which in period of crisis, smaller and less expensive luxury items can become very in demand. “We believe it’s necessary to reposition Dolce&Gabbana’s beauty category to bring it to the same level as our other ones”.
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