Shares of Ermenegildo Zegna N.V. ended their first week of trading Thursday at $11.94, 16 percent above the opening trade of $10.30 when the company began trading as a public firm on Monday.
The Italian luxury men’s brand is now the newly branded Zegna Group, including the Thom Brown suiting company it acquired in 2018. The IPO has Zegna joining the public offering ranks in a year that saw a parade of fashion brands ranging from Poshmark, Mytheresa.com, Dr. Martens, and ThredUp all successfully complete IPOs. Other firms that hit the public markets this year include Rent the Runway, the Roger Federer-backed running brand On Running, eco-friendly sneaker brand Allbirds, California-based fashion firm A.k.a Brands, and Solo Brands, the parent company of men’s weekend shorts and shirts brand Chubbies.
But what makes Zegna different is the path it took to become a public firm.
Zegna used what some see as a back-door approach. It inked an agreement with Investindustrial Acquisition Corp., a special purpose acquisition corporation (SPAC) that had the backing of Investindustrial VII LP subsidiaries.
SPACs aren’t new but saw a return to favor these past 12 months. In 2021, American mall operator Simon Property Group formed Simon Property Group Acquisitions, hoping to raise $300 million in the process. Now the blank check company is on the hunt for an acquisition that would help it become publicly listed. Former Gap CEO Art Peck is looking to raise $200 million for his SPAC Good Commerce Acquisition Corp. Peck’s SPAC has a stated objective to “create a next-generation consumer holding company” in the fashion and consumer space.
SPACs offer a way to pool funds to finance a merger or acquisition through an initial public offering, usually within a timeframe of between 18 to 24 months. And it seems to be the preferred option, mostly because it’s faster and easier than the traditional IPO route.
Earlier this year, Origin Materials Inc., a carbon negative materials company, said it has completed its previously announced business combination with Artius Acquisition Inc., a SPAC. And just a week ago, Walmart-backed robotics firm Symbotic LLC hopped onto the SPAC bandwagon via a merger with SoftBank’s SVF Investment Corp. The entity, which gives Symbotic a pro forma equity value of $5.5 billion, is expected to go public on the Nasdaq Exchange next year.
For its first week of trading, Zegna shares rose as high as $12.65 in intraday trading on Wednesday. The company has a market capitalization of $2.67 billion, according to Yahoo Finance.
The Italian luxury fashion house was founded in 1910 by Ermenegildo Zegna.