Zegna Goes Public Through $3.1B SPAC Deal with Investindustrial

Italian luxury fashion company Zegna is making its debut on the New York Stock Exchange Monday (Dec. 20) under the ticker symbol ZGN after a special purpose acquisition company deal with European private equity company Investindustrial that valued the company at $3.1 billion.

Former UBS chief executive Sergio Ermotti leads the Investindustrial team, which crafted the deal with Zegna in July, according to a press release Friday (Dec. 17).

“We are very proud to be the first Italian fashion company to be listed in New York,” said Gildo Zegna, the third generation of the family to run the company since its founding in 1910, in a Financial Times interview at Zegna’s Manhattan flagship store on the Friday before the listing.

The Zegna listing will deliver gross proceeds of $761 million to invest in Zegna and Thom Browne, another brand it controls. It also opens the door to additional acquisitions. The Zegna family will own about two-thirds of the combined company, the FT report says.

Zegna told FT in 2019 he had no interest in taking the company public, but the continuing spread of the COVID-19 pandemic has changed the thinking of many business leaders, especially independent brands that are struggling to keep up with larger fashion brands with global footprints.

In 2020, Zegna’s sales dropped 23% from the year before to 1 billion euros ($1.13 billion), triggering a net loss of 45 million euros ($50.8 million), down from a profit of 38 million euros (almost $42.9 million). The company told investors that its performance would recover to near pre-pandemic levels in 2021.

“The market of luxury is very challenging,” Zegna said. “We are competing with conglomerates. [We did it] to get stronger. Now I can rely on additional resources . . . to take our shot if we have another [acquisition] opportunity, and I think I can tell you we have other opportunities.”

Zegna will look to buy more of its suppliers and focus on organic growth in the menswear segment while also making more investments in its textile business, which supplies fabrics to Chanel, Tom Ford and other rival fashion brands.

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Meanwhile, digital wholesale management platform JOOR has added a focus on bridal salons and their relationships with all the industry’s brands in addition to its established work in the luxury fashion space.