Ermenegildo Zegna stitches a joint venture with Al Tayer Group

The Al Tayer Group has firmed up a joint venture with the Italian luxury menswear label Ermenegildo Zegna that would cover all of the existing brand outlets as well as future ones in the UAE.

  

Sunday, Oct 11, 2015

Dubai: The Al Tayer Group has firmed up a joint venture with the Italian luxury menswear label Ermenegildo Zegna that would cover all of the existing brand outlets as well as future ones in the UAE.

“Joint venture is an approach we had taken in markets such as Australia and India in the last three years,” said Gildo Zegna, CEO of the Ermenegildo Zegna Group, which recorded revenues of €1.21 billion (Dh5.04 billion) last year. “This part of the world is very important to us and why we decided to step in with the same approach.

“This way we get closer to the customer with a more direct contact. Plus, a joint venture brings a local dimension to the equation and that’s important.” (Ermenegildo Zegna currently operates 525 stores worldwide, of which 298 are directly owned.) The extensively renovated Mall of the Emirates location is now open, and another at The Dubai Mall will follow suit “within 2017”. Apart from stand-alone stores, the brand is adding points-of-sale at upscale department stores such as Harvey Nichols, Bloomingdale’s and Galeries Lafayette. It also ties in closely with the label’s quite aggressive move to expand its returns from accessories.

Industry leader

On the time frame for the new alliance to get everything in order, Khalid Al Tayer, CEO — Retail, Al Tayer Group, said: “We have an acute knowledge of what it is to be the leader in luxury retailing. The joint ventures is taking over an existing operation from another operator. The transition period will be effected with the utmost level of prevision and with minimum challenges.” (Interestingly, the Al Tayer Group entities have alliances with marque labels such as Prada, Bvlgari, Saint Laurent and Gucci.)

According to Zegna, “At the Mall of the Emirates, we have brought in some of the best global experiences the brand can offer. There will be other opportunities in the future — there’s the Mall of the World that we keep reading and hearing about.

“The airport expansions in Dubai and Abu Dhabi and that’s something we will keep watch [over].

“Then there’s the Expo in 2020 — if it has the same effect that the one in Milan has had on businesses there, we are looking at very good prospects.

“In the first quarter of this year, [revenues in] Milan were not good. But once the Expo started, business has flourished.

“We are testing a lot of projects in other countries and will make good use of that here — there’s a lot cooking on the counter … and even some speciality products (unique to the local outlets).”

Right direction

While Zegna cut its teeth with super-premium fabrics and its made-to-measure services (which has now been extended to sporting clothes), its accessory collection will have a role to play too. “While I never say I’m completely satisfied, it’s moving in the right direction — accessories have done a good job in Asia. They’re not quite there yet in the Middle East, but the expansion of the points-of-sale presence will drive numbers.

“We see that in markets where there’s been less traffic (because of tightening consumer sentiments), accessories can help create new customers for the brand.”

Currently, China is the biggest market for Zegna and followed by the US and Italy. “In the last five years we have invested heavily in Greater China (including the likes of Hong Kong, Macau and Taiwan),” said Zegna. “We will continue to invest, but to a lesser degree (in new openings), but maintain the same levels on marketing spend.

“What’s happening in China now is consolidation — pure and simple.”

By Manoj Nair ?Associate Editor

Gulf News 2015. All rights reserved.