MILAN – Signaling to the market their support and confidence in the Ermenegildo Zegna Group, a holding controlled by members of the Zegna family called Monterubello on Tuesday acquired 913,000 ZGN shares, or about a 0.4 percent stake.
As of Oct. 31, Monterubello had a 60 percent stake in the Zegna Group. The intention is to acquire an additional 2 million ZGN shares in the market in the coming weeks. In total this will mean an additional 1.2 percent shareholding.
“Our family firmly believes that the purchase of additional shares in the Ermenegildo Zegna Group represents a very strong investment,” said Gildo Zegna, chairman of Monterubello and chairman and chief executive officer of the Ermenegildo Zegna Group. “Given market volatilities and uncertainty, the Zegna family believes that the group’s current stock valuation does not reflect its real potential.”
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On Dec. 20, 2021, on the first day of trading on the New York Stock Exchange, shares started trading under the ZGN ticker at $10.30 and closed up 4.2 percent at $10.74 after a jump of 9.9 percent earlier in the day, reaching $11.32. At the end of trading on Nov. 11, they closed at $7.29. Like many of its luxury peers, the uncertainties and volatility of the markets have weighed on the performance of Zegna shares, which in three months decreased 27 percent.
Zegna listed in New York after entering into a business agreement with Investindustrial Acquisition Corp., a special purpose acquisition corporation, sponsored by investment subsidiaries of Investindustrial VII LP.
IIAC has raised total gross proceeds of $402.5 million in its IPO. Investindustrial has a stake of a little more than 10 percent and about 25 percent is free-floating.
Based on the transaction value, the merged entity will have an initial enterprise value of $3.1 billion with a market capitalization of $2.4 billion. The transaction delivered about $761 million in gross proceeds.
As reported, in the nine months ended Sept. 30, the Zegna Group reported unaudited revenues of 1.35 billion euros, up 1.7 percent compared with 1.33 billion euros in the same period last year. Organically, sales fell 4 percent.
In the third quarter, revenues were down 7.8 percent to 397.3 million euros, impacted by an increasingly challenging Greater China region and a soft wholesale channel at Thom Browne.
However, Zegna is thinking long-term.
“The year 2024 was different from what we had planned but we must work for the long-term,” said Zegna at the time, underscoring the investments made in all brands, and attracting the right talent to leverage the labels’ full potential in 2025. In addition to the Zegna and Thom Browne brands, the group produces collections for Tom Ford Fashion. “Although uncertainties remain, particularly in Greater China, we will be in much better shape, planning carefully, strengthening the group to deliver on our promises. Next year is unpredictable, but we are prepared with a clear vision to stay the course,” he said.
