Ermenegildo Zegna to Buy Thom Browne in a Bid for Younger Customers

Ermenegildo Zegna to Buy Thom Browne in a Bid for Younger Customers

Annual sales now hover around the $100 million mark, split evenly among Asia, Europe and the United States. But while the brand is profitable and maintains a cultlike following, it remains relatively niche.

For Zegna, which posted annual revenue growth of 2 percent last year, the addition of Thom Browne to its portfolio offers an opportunity to reinforce its global fashion credentials. Zegna’s formal Italian suiting has long been a mainstay for the smart business elite, and the company also owns the women’s wear brand Agnona and has the license to manufacture Tom Ford men’s wear.

The tastes of its clients, however, are fast changing.

Hoodies and sneakers have eclipsed ties and double-breasted blazers in the wardrobes of many professionals, with casual wear now the fastest-growing segment of the luxury industry, according to a recent report by the consulting group Bain & Company. Small and independently-minded brands are also climbing in popularity as younger consumers appear to eschew conformity in favor of standing out.

Zegna has already made attempts to capitalize on these trends. It has unveiled plans to open new stores in locations including Beijing, Mexico City, Singapore and Tokyo, and is selling new products like a “wash and go” luxury merino wool suit, alongside its traditional off-the-rack and bespoke business, where suits go for upward of $5,000. Alessandro Sartori was also named the group’s artistic director in 2016 as it sought to unify its more classic and hipper lines under a single, more fashion-forward aesthetic.

The purchase of a new brand to add to the Zegna empire, however, suggests the group wants to take on yet another frontier.

Mr. Zegna said that he and Mr. Browne “shared the same passion for excellence and impeccable, modern tailoring.” He added, however, that “Thom’s visionary approach and his unique point of view have enabled him to build and nurture the most loyal clientele.”

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