Ermenegildo Zegna on Tuesday revealed medium-term financial ambitions and unveiled updated environmental, social, and governance (ESG) strategy and targets.
The Zegna Group, which designs and luxury goods under the Zegna and Thom Browne brands, said it’s aiming for revenues to exceed 2 billion euros ($2.2 billion) and for adjusted earnings before interest and taxes (EBIT) as a percentage of revenues to reach at least 15 percent.
The company expects an increase in store productivity and continuing positive development of the price-mix ratio to be key drivers of the top line, reflecting positively on profitability together with favorable operational leverage. These improvements should more than offset the strengthening of its marketing investments which, together with capital expenditure today at about 5 percent of revenues, are planned to support the Zegna rebranding and the overall growth strategy.
Keeping with its historical focus on sustainability and care for the world, Zegna said it has set a new ESG strategy, with further commitments on materials traceability, climate change and equal employment opportunities. Zegna Group’s ESG commitments will be overseen by the board of directors, and, starting this year, long-term equity incentive plans granted to eligible executives will be linked to achieving these targets.
“The ESG targets announced today reaffirm our commitment to a path of responsible growth and take us boldly to the future,” Ermenegildo “Gildo” Zegna, chairman and CEO of the Zegna Group, said. “We have rooted our financial goals in our values, which makes me confident in our ability to deliver against the ambitions set out in our business strategy.”
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Some of the ESG-focused commitments include by early 2023, the company will appoint a DE&I officer and governance to manage the deployment of its diversity, equity and inclusion strategy. This year, Zegna will complete the submission of GHG emissions reduction targets in line with the Science-Based Targets initiative (SBTi).
By 2024, the company will be using an innovative and open digital platform to allow suppliers to share their energy sources, water, chemical and emissions data, as well as product certifications, covering at least 30 percent of its supply volume, and it aims to have all of its electricity in Europe and the U.S. derived from renewable sources, extending to all operations by 2027.
By 2026, more than 50 percent of top priority raw materials used in Zegna Group products will be traceable to their point of origin, exceeding 95 percent by 2030. The company will also plant 10,000 trees, or mini Zegna forests, in every city where Zegna Group opens or relocates Zegna boutiques, starting in 2023.
Through its Luxury Textile Laboratory Platform that works to preserve artisanal mills producing the finest Italian fabrics, Zegna Group manufactures and distributes high-quality fabrics and textiles. Products are sold through over 500 stores in 80 countries around the world, of which 295 are directly operated by the company as of March 31.