Ermenegildo Zegna will reduce capex in 2016

Endaba Group

Ermenegildo Zegna, Chief Executive of his eponymous luxury brand, is planning to reduce the capital expenditure in 2016 after investing in stores globally even though customer traffic declined. In doing so, this should keep them in a secure position, as they have done some major investments; they are doubling the size of some of their London stores and have opened outlets in Japan and Macau.  Zegna has not confirmed the size of the reduction, only that they’ll be more cautious. Its biggest market is China and they are consolidating stores and locations there. They are one of the many luxury-goods makers, such as Prada, Burberry and Gucci, who are finding difficulty in the Chinese economic slowdown. The devaluation of the Chinese yuan led to a drop in customer traffic in August, which will be a big challenge for the brand. They are focusing on how to tackle this challenge and how to excite traffic.