Fashion
Italy’s Zegna H1 profit surges as DTC drives 82% of branded sales
The profit rose 53 per cent to €47.9 million (~$56 million), lifting the profit margin to 5.2 per cent from 3.3 per cent. Adjusted EBIT was €68.7 million, with a 7.4 per cent margin (8.4 per cent in H1 2024).
Ermenegildo Zegna Group has posted revenues of €927.7 million (~$1,085.4 million) in H1 2025, down 3.4 per cent as wholesale streamlining offset 4.2 per cent DTC growth, now 82 per cent of branded sales.
Profit surged 53 per cent to €47.9 million (~$56 million), with gross margin at 67.5 per cent.
Zegna brand stayed resilient, Thom Browne fell, and Tom Ford Fashion posted losses.
The DTC revenues grew 4.2 per cent (6.1 per cent organic) to €698 million, reaching 82 per cent of branded revenues (76 per cent in H1 2024), and wholesale branded declined 27.1 per cent (26.5 per cent organic) to €154.2 million, Zegna Group said in a press release.
The gross margin improved to 67.5 per cent (+110 basis points), aided by the higher DTC mix, meanwhile the operating profit was €61.3 million (6.6 per cent margin) vs €73.1 million (7.6 per cent). The net financial items and foreign exchange (FX) turned positive €6 million (vs negative €24.8 million), aided by put-option remeasurement and a favourable US dollar/euro move.
Brand and segment wise, Zegna brand revenues were €570.4 million, up 0.8 per cent (2.6 per cent organic). Thom Browne recorded revenue of €129.2 million, down 22.5 per cent (21.7 per cent organic). Tom Ford Fashion saw a revenue of €152.7 million, up 2.8 per cent (3.8 per cent organic), and Textile with €67.1 million revenue was down 6.6 per cent.
Zegna delivered adjusted EBIT of €94.4 million, with margins rising to 14.3 per cent (up 150 basis points), supported by stronger operating leverage and disciplined cost management. Thom Browne generated €4.5 million, with margins falling to 3.5 per cent from 12.1 per cent, pressured by lower revenues and upfront costs tied to new DTC store openings. Tom Ford Fashion reported a loss of €19.4 million, with margins at –12.7 per cent, reflecting heavy investments in retail expansion, talent, IT systems, and organisational infrastructure.
By region, revenues in the Americas rose 6.8 per cent (9.3 per cent organic) to €262.7 million. Europe, Middle East, and Africa (EMEA) generated €328.9 million, a decline of 2.3 per cent (1.9 per cent organic). Greater China fell 16.2 per cent (14.7 per cent organic) to €223.1 million, while the Rest of Asia-Pacific (APAC) edged up 1.4 per cent (3.4 per cent organic) to €111.5 million.
The capital expenditure totalled €54 million, directed mainly towards DTC network growth and the new shoe plant in Parma (Italy). Trade working capital improved to €441.8 million, supported by reduced inventories and receivables following wholesale rationalisation. The net financial indebtedness stood at €92.1 million, remaining broadly stable.
“Our first-half 2025 results reflect the Group’s strategic decision to invest in the DTC store network and capabilities across our three brands, while continuing to support projects that fuel our long-term growth ambitions,” said Ermenegildo Gildo Zegna, Group chairman and CEO. “In this context, we are pleased with the operating results reported by the Zegna segment where stronger operating leverage and disciplined execution led to an improvement of the adjusted EBIT margin by 150 basis points. This strong performance helped balance the impact of the strategic transformation underway at Thom Browne and Tom Ford Fashion.”
“With the strength of our Filiera, the authenticity of our brands, and—above all—the clarity of our vision and the talent of our team, we remain on track to achieve our 2027 targets, despite sector and currency headwinds,” added Zegna.
The management reiterates confidence in achieving 2027 targets, citing the stronger Zegna segment profitability, continued DTC investments, and the group’s integrated Italian supply chain (Filiera). Near-term headwinds include sector softness and currency volatility as Thom Browne and Tom Ford Fashion continue strategic transitions.
Fibre2Fashion News Desk (SG)
Published
September 17, 2025
M&S has a new commercial and operations director for fashion, home and beauty as the retail giant undergoes a “comprehensive restructuring” of its end-to-end operation.
Jon Rolls joins from Primark where his “deep expertise” in trading, operational efficiency, and large-scale transformations will be key for a new job that includes identifying commercial opportunities and improving operational efficiency across the supply chain.
The appointment marks Rolls’ return to M&S where he began his career as part of its graduate scheme. He later moved to New Look in 2006 where he served as head of Merchandising.
In 2011, he joined Primark, undertaking a series of senior merchandising roles. In 2019, he was appointed group director of Planning and Space, joining the retailer’s executive team.
M&S said the Rolls’ appointment “marks a significant step” in the ongoing transformation of M&S’s Fashion, Home & Beauty division.
He will report the department’s managing director John Lyttle (also ex-Primark) and will “lead the cross-business unit commercial planning, oversee the Outlets division, and drive the modernisation of systems across merchandising, forecasting, and range planning — enhancing collaboration between internal teams and supply partners”.
M&S is currently in the early stages of that “comprehensive restructuring” for its Fashion, Home & Beauty division. Key priorities include the rollout of a new merchandise and range management system, increased automation across the logistics network to support online growth, and strengthening the resilience and flexibility of the supply base.
Lyttle said his “experience in driving operational change and commercial growth in fast-paced retail environments will be invaluable as we reshape our supply chain for growth and build a more agile, customer-focused business.”
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A US delegation led by Brendan Lynch, Assistant US Trade Representative for South and Central Asia, met Indian trade officials headed by chief negotiator Rajesh Agrawal.
The Indian Commerce and Industry Ministry termed the one-day trade discussions held between the US and India yesterday in New Delhi ‘positive’ and ‘forward-looking’.
A US delegation led by Brendan Lynch, Assistant USTR for South and Central Asia, met Indian officials.
“It was decided to intensify efforts to achieve early conclusion of a mutually beneficial trade agreement,” the ministry said.
A few days back, President Donald Trump had announced that negotiations between the two countries would resume soon to address ‘trade barriers’.
“It was decided to intensify efforts to achieve early conclusion of a mutually beneficial trade agreement,” the ministry said in a release.
The two sides are now expected to hold a formal sixth round of negotiations.
“Just had a wonderful phone call with my friend, Prime Minister Narendra Modi. I wished him a very Happy Birthday! He is doing a tremendous job,” Trump wrote on Truth Social yesterday.
Responding on X, Modi wrote, “Thank you, my friend, President Trump, for your phone call and warm greetings on my 75th birthday. Like you, I am also fully committed to taking the India-US Comprehensive and Global Partnership to new heights.”
Fibre2Fashion News Desk (DS)
The results reflect strong customer response towards the company’s ongoing brand investments and curated product offerings, as well as improvements to enhance the omnichannel customer experience, Roots Corporation said in a press release.
Roots Corporation has posted sales of $50.8 million in Q2 FY25, up 6.3 per cent, with DTC sales rising 12.7 per cent on strong 17.8 per cent comparable growth.
The gross margin improved to 60.7 per cent, while net loss narrowed to $4.4 million.
Adjusted EBITDA loss reduced, free cash flow improved, and net debt fell.
Inventory rose to support seasonal demand. H1 sales reached $90.7 million.
Partners & Other (P&O) sales, which include wholesale, licensing, and custom products, fell 14.2 per cent to $9.7 million, mainly due to reduced wholesale orders from Roots’ international partner as it optimised inventory levels.
The gross profit of the company increased 14.5 per cent YoY to $30.8 million, while gross margin expanded 430 bps to 60.7 per cent, aided by a higher-margin sales mix. DTC gross margin rose to 63.2 per cent, up 150 basis points (bps) from last year, benefitting from improved product costing and lower discounting, partially offset by foreign exchange headwinds.
The selling, general and administrative (SG&A) expenses rose 9.1 per cent to $34.7 million, reflecting higher variable costs from stronger sales, increased marketing spend, and personnel expenses. Adjusted for share-based compensation revaluation, SG&A expenses were up 7 per cent.
Roots reported a net loss of $4.4 million, or $0.11 per share, improving from a loss of $5.2 million, or $0.13 per share, in the prior-year quarter. Excluding the impact of cash-settled share-based compensation, the net loss narrowed to $4 million, an improvement of nearly 27 per cent YoY.
The adjusted EBITDA improved 32 per cent to negative $2.1 million, from a loss of $3.1 million in Q2 FY24. On an adjusted basis excluding share-based impacts, EBITDA stood at a loss of $1.8 million, a 47.9 per cent improvement from last fiscal.
Free cash flow improved to $6.9 million, up 22.9 per cent from $9 million in the same quarter of FY24. Net debt was reduced 6.5 per cent YoY to $38.1 million, reflecting stronger financial discipline.
The company also repurchased 491,500 shares for $1.5 million under its normal course issuer bid during the quarter.
Inventory at the end of Q2 stood at $49.9 million, reflecting a healthy alignment with growth in direct-to-consumer sales. The increase ensures stronger stock positions for year-round core collections and supports upcoming seasonal launches for autumn and the holiday period.
Net debt closed the quarter at $38.1 million, with a leverage ratio of 1.6x on trailing twelve-month Adjusted EBITDA. The company also reported $40.9 million outstanding under its credit facilities and total liquidity of $41.3 million, including borrowing capacity under its revolving facility.
“Roots delivered a strong second quarter with comparable sales up 17.8 percent, reflecting the strength of our brand and the resonance of our products with consumers,” said Meghan Roach, president and chief executive officer (CEO) of Roots Corporation. “This momentum was supported by innovative collaborations, a compelling product assortment, and our focus on creating meaningful customer experiences. As we continue to strengthen our brand and deepen engagement with our loyal community, we are focused on creating long-term value.”
For the first half (H1) of fiscal 2025 (FY25), sales grew 6.5 per cent to $90.7 million, with DTC sales went up 11.6 per cent at $75.7 million and comparable sales growth of 16.1 per cent. P&O sales declined 13.2 per cent to $15.1 million.
The gross profit in H1 rose to $55.4 million, or 61 per cent of sales. The net loss for H1 improved to $12.3 million from $14.1 million in Q2 FY24.
Roots expects momentum to carry into the second half (H2) of fiscal 2025, driven by strong brand positioning, improved customer engagement, and ongoing operational efficiency. The company will continue to balance investments in growth with strategies to reduce debt and enhance long-term shareholder value.
Fibre2Fashion News Desk (SG)
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