With timeless luxury, Zegna and Hermès are making billions

Although analysts and investors periodically cry pity over the occasional downturn in the stock market, the luxury industry is doing quite well. It is no accident that its best representative, tycoon Arnault, is the richest man in the world. But the high tide lifts all boats, and recently, those brands that have historically cultivated classic repertoires, very high quality, and a low-noise approach to marketing are enjoying the success that so-called "quiet luxury" is having in recent months. After rebranding, listing on the stock exchange, and the mega-transaction that saw it take over the production of clothing for Tom Ford ad libitum, the Zegna Group not only returned to profitability last year, with revenues up 42 percent and 65 million in profits but according to CEO Gildo Zegna the growth recorded in the first three months of 2023 leads to confirmation that the group is perfectly on schedule for its two-billion annual revenue rendezvous set for 2025. Even more astonishing news, then, is that the Hermès group has surpassed the market value of 200 billion, coming in second place in the luxury industry, behind the huge behemoth LVMH-it should be noted, however, that LVMH's 420 billion market value is the result of a portfolio of 75 brands, while Hermès has reached half that figure alone, one Birkin after another. Both brands, it should be noted, belong to the ultra-luxury category and feed a hunger for cashmere, silk, and leather handbags that, in the upper echelons of society, where the top 1 percent of the 1 percent is, seem to have no end.

The same can be said of other independent brands in the industry: according to Bloomberg, both Burberry and Hugo Boss, both freshly relaunched though quite different, are gaining momentum while last January Brunello Cucinelli said it was on track to cross the billion annual revenue threshold. It is a perfect time,, to sell anonymous clothes at an astronomical price since, according to BoF, «the luxury market is set to slow from 22 percent last year to between 3 and 8 percent this year» and, in short, the only category that will continue to spend are precisely those ultra-rich for whom a pair of shoes under a thousand euros does not exist. It is no coincidence that the fastest growing sectors for Zegna are the made-to-measure defined «on fire» by Gildo Zegna himself, sneakers, and leisurewear-that is, all those clothes (anyone who has seen a Zegna collection or lookbook already knows) that are as comfortable as a suit but aesthetically closer to true tailoring-think chore jackets, cashmere joggers, and generally everything that says "Gianni Agnelli on vacation." Another point that speaking with BoF, Gildo Zegna emphasized is the brand's independence and (pass the term) agility compared to other luxury giants encumbered by their own dimensions.«We are men’s only and we are small compared to the big [players] in the world of luxury», he said. «So I can only see positive prospects. We just have to ask: how quickly do we want to go»