Italian luxury fashion house Zegna to go public in $3.2bn New York listing with Spac

Ermenegildo Zegna, the Italian luxury fashion house, plans to go public by merging with a US special-purpose acquisition company launched by European private equity group Investindustrial Acquisition.

The deal will value Zegna at $3.2 billion after its listing on the New York Stock Exchange later this year, Investindustrial said yesterday.

Zegna, based in Milan, will own 62 per cent of the combined company, which is being given an equity value of $2.5bn, according to a statement.

“We could have remained independent for another 100 years,” Gildo Zegna, chief executive of Zegna Group, was quoted as saying by the Financial Times.

“But the moment is appropriate and the world has changed a lot and luxury has become very challenging.”

Zegna’s move to list comes as luxury fashion labels seek to consolidate their businesses, in a bid to strengthen finances, as the retail industry grapples with the coronavirus crisis.

Earlier this year, French luxury group LVMH acquired fashion house Emilio Pucci, based in Florence, and is reportedly in talks to take a 60 per cent stake in fashion label Etro through a private equity venture that it backs.

The 111-year-old family owned Zegna will raise $880 million after the deal to further invest in its menswear business and fund its future acquisitions, the company said.

Investindustrial, which is listed in New York, will receive an 11 per cent stake in the Italian brand.

“Our goal now is to support Zegna in this important new chapter of its history while opening the opportunity to the public to invest in one of the last great independent luxury brands,” said Sergio Ermotti, chairman of Investindustrial Acquisition and former UBS chief executive.

Renowned for its luxury menswear, Zegna had a retail network spanning 80 countries through 296 directly operated stores, as of December 31, 2020, the company said on its website.

The company runs operations in the UAE in partnership with Al Tayer Group, with its portfolio including brands such as Bottega Veneta, Coach, Dolce & Gabbana, Emilio Pucci, Giorgio Armani and Jimmy Choo, among others.

It also has units in other Middle East markets including Saudi Arabia, Bahrain, Kuwait, Qatar and Oman.