Ermenegildo Zegna N.V. (NYSE:ZGN) Q4 2022 Earnings Call Transcript

Ermenegildo Zegna: Yes. Okay. I’ll start with the China since they have been twice already and probably I’m going to be there at the third site probably before the summer. Listen, the biggest surprise is on Cog Macau, which it was not given, to be honest with you, during the first visit, but it was after a second where I got to understand the Chinese were finally free to move around also inside their boundaries and the Hong Kong and Macau would have been the first destination for sure. Then I remember on the list, Japan was told you some on the list, Bangkok and Singapore. And we see this happening. This is literally it’s what’s going on. Now predicting whether this trend will hold on for the rest of the year, whether they will be traveling also abroad outside the foundries, even more so of Asian territory, I don’t know.

We played that they would stay in Asia. So we think that we will see them more for sure, €˜24. We are ready for that. But right now, we arrived the results in the greater China region and in some territories in Asia. Now in terms of more color, listen, I think they liked our color. They like the new car of the brand, and they go big open newness. I mean I just can tell you we just came out with a lineal short collection, and it’s branding these days on the market, and we just over that. We just shipped the first shot of note shoes and they just are on fire. So whatever newness you send to them the response. And I tell you, I mean, we’re talking not only about loyal customer, we’re talking about newness. And I can tell you in the iconic product, I would say, at least between 30% and 50% of the purchases of our new customers.

So we have a lot to do in the next months and season to make sure to surprise them. But I think that the — what we — if you remember, we talked last year quite often about collaboration. I think that this collaboration route, I think is a very smart move in terms of marketing in terms to a duet to come back and to make sure that whenever they come back and they visit often the store, I think that one of the Chinese, they visit the store more often than any other consumer, we see this happening again, as a matter of fact, traffic is up not yet to where it was at the peak of ’21, but surely nicely up around, I would say, low double digits. But I think the important thing is to make sure that they are surprised that we’re trying to visit the store.

And I think that all these new can I feel the denominating factor of start early with the marketing led by I think total some good results. The other thing is made to major, as I said, I just want to repeat, making to measure is our formulae, and we are surely a leader in that, and it’s coming back, and that’s a very good news. And that’s why, as Gianluca was saying, we are strengthening our tailoring supply chain increasing nature of the production because we just are — we just want to keep up. We have a two to four weeks’ delivery cycle there according to the speed we want to give, and we just want to make sure that we keep being on top of that. So I think the overall, I mean pretty good news. And there is no reason why it should slow down the rest of the year.

We remain update in particular China.