Zegna’s end-of-year earnings results released on Wednesday showed strong revenue growth of 15% over the previous year, with sales up particularly at the namesake brand Ermenegildo Zegna and Thom Browne.
But buried in the company’s earnings report is a surprising new addition to Zegna’s portfolio. The company announced that, beginning on January 23, it had taken a minority stake in the Canadian technical running brand Norda Run. The option was taken with the plan to gradually grow Zegna’s investment in the brand over the next nine years.
Norda Run is, in some ways, a surprising pick for Zegna. It’s an outdoor trail-running sneaker brand that makes rugged high-performance shoes for athletes. Zegna’s brands — Ermenegildo Zegna, Thom Browne and soon Tom Ford, following its acquisition of the license from Estée Lauder — are traditional luxury fashion brands focused on formalwear and leather goods.
But Norda’s outlier status also makes it a fit for the expanding Zegna (nearly $2 billion in annual revenue) if it wants to compete with its larger conglomerate competitors in the luxury space, like Kering ($19 billion) and LVMH (nearly $60 billion). Norda fills a niche that Zegna needed, aside from Thom Browne’s recent attempts at athletic wear, while also still fitting in with Zegna’s premium status. The shoes are pricier than standard Nike or Adidas sneakers, with pairs running up to $300 for the highest quality model.
“The luxury outdoor space continues to be an area of focus for the Group,” a statement from the company read.
While Norda is mainly focused on athletics rather than lifestyle fashion, its gorpcore aesthetic is one that Zegna could spin into a streetwear play, especially if Norda collaborates with Zegna’s other brands. Norda is already carried on streetwear marketplaces like Highsnobiety.
After acquiring Thom Browne in 2018, Zegna had been quiet on the acquisition front for years. But now with the soon-to-be-finalized acquisition of the Tom Ford license and the minority stake in Norda, the group is rapidly growing its portfolio to challenge the other conglomerates. In a press statement, CEO Gildo Zegna said rapid expansion is an intentional move that has already brought the company success.
“Despite China continuing to be affected by Covid-related restrictions throughout 2022, our growth for the year shows the soundness and success of our strategy,” he said.