Designer Zegna to go public in $ 3.2 billion SPAC deal

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(Bloomberg) – Ermenegildo Zegna is quoting his shares through a deal with a blank check company that values ​​the Italian fashion house at $ 3.2 billion.



a group of people walking on a street in front of a building: retail sale of global luxury brands following the acquisition of Versace SpA


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Retailing of global luxury brands following the acquisition of Versace SpA

Zegna intends to raise $ 880 million by partnering with Investindustrial Acquisition Corp., a specialist acquisition company chaired by Sergio Ermotti, former CEO of UBS Group AG. The Zegna family will control 62% of the combined entity and the shares will be traded on the New York Stock Exchange.

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The move represents a strategic shift for the 111-year-old company and comes as luxury goods manufacturers continue to consolidate, following the acquisition of Versace in 2018 and the record-breaking purchase of Tiffany & Co. by LVMH. Moet Hennessy Louis Vuitton SE this year. Zegna’s approach contrasts with these deals, as the SPAC transaction allows the company to go public while remaining controlled by current shareholders.

“The Zegna family will remain at the helm of the company,” said Ermenegildo Gildo Zegna, CEO and grandson of the founder. He said the company will continue to invest in its goal of becoming the leader in menswear.

Originally founded as a fabric manufacturer in 1910 by Ermenegildo Zegna in Trivero, Italy, the company has grown into a well-known luxury brand under the third and fourth generations of the Zegna family. In 2018, Zegna bought Thom Browne with the aim of attracting a younger clientele and has doubled the brand’s revenue since the acquisition. Last month, Zegna also entered into a partnership with Prada SpA invest in a cashmere manufacturer in Italy as luxury firms seek greater control over their supply chain.

Zegna operates 296 stores in 80 countries and expects this year’s sales to return to 2019 levels.

Italian luxury brands have been challenged by the lockdowns induced by the pandemic and some prominent names such as Tod’s have requested support from larger groups such as LVMH. Recently, Salvatore Ferragamo SpA hired Burberry CEO Marco Gobbetti to join the struggling leather goods brand in need of a turnaround.

Firmly established in the United States, PSPCs have recently gained ground with businesses and investors in Europe. Last week, a SPAC backed by billionaire luxury family Pinault raised € 275 million to focus on entertainment companies in Europe.

Read more: Why Blank Check Companies (PSPC) Fill Up Fast: QuickTake

Among other recent transactions, L Catterton, a private equity firm backed by LVMH, agreed to buy a majority stake in the Italian fashion house Etro SpA on Sunday.

(Updates with CEO comment in fourth paragraph)

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