Ermenegildo Zegna to go public through SPAC deal

Ermenegildo Zegna on Monday (19 July) entered the stock market through the trending special-purpose acquisition (SPAC) method. The Italian family-owned luxury company merged with Investindustrial, an American SPAC company led by Sergio Emotti, the former chief executive of Swiss bank UBS. Zegna is seeking to raise $880 million through the corporate action.

The deal required the Zegna family to sell a portion of their ownership and control 62% of the combined entity. The market value is projected to stand at $2.5 billion. The brand will use the proceeds to expand its business to China-which accounted for almost a third of its total sales in 2019-and the US. 

This step is also a way for the luxury company to adapt during the pandemic as business gets more challenging. Chief Executive Gildo Zegna said that the company was pushed into cutting 20% of its operating expenses as sales dropped by 20% last year.

Similar concern is felt by most family-owned fashion businesses. Giorgio Armani also expressed his interest in joining forces with another Italian company. John Elkann of the Agnelli family, the family that founded Fiat motors, is exploring the possibility of partnership.