Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Zegna Family Built a Luxury Textile Empire
Transcript
- Lucas: So there's a small town in the Italian Alps called Trivero, population about six thousand. And if you drive through it, you might notice something unusual — a hundred square kilometer forest called Oasi Zegna. It's not a national park. It's a private nature reserve, created by a textile company. Luna: Wait — a textile company owns a forest that size? Lucas: They do. And it's not just a PR gesture. The forest was planted starting in the 1930s by the company's founder, Ermenegildo Zegna. He wanted to give back to the community that powered his mill. But it also became a symbol of something larger — that this family was thinking in generations, not quarters. Luna: And that family is the Zegnas — one of the last big independent names in luxury menswear. Today we're talking about how they built a textile empire from a single wool mill. Lucas: Exactly. Ermenegildo Zegna founded the company in 1910, when he was just eighteen. He inherited a small wool mill from his father. But he didn't just want to make fabric — he wanted to control the whole chain. From raw wool to finished cloth. And eventually, to finished suits. Luna: Vertical integration in the early 1900s. That was pretty forward-thinking. Lucas: It was. Most textile mills then bought wool from brokers, spun it, sold it to garment makers. Zegna went straight to the source — he sourced merino wool from Australia and South Africa, brought it to Italy, and built state of the art finishing plants. By the 1930s, Zegna fabric was considered the best in the world. Savile Row tailors in London were using it. Luna: But they didn't stay just a fabric supplier. The brand we know today — Zegna suits — that came later. Lucas: Right. The company made fabric for other brands for decades. It wasn't until the 1960s, under Ermenegildo's sons Angelo and Aldo, that they launched their own ready to wear line. That was a big bet. They were competing with their own customers — the tailors and fashion houses they supplied. Luna: Did it cause friction? Lucas: Some, but the Zegnas managed it carefully. They positioned their clothing line at the very top of the market, so it didn't directly undercut most of their fabric clients. And the fabric business remained separate — they still supply other luxury brands today. That dual revenue stream is actually a strength. Luna: So the third generation — Ermenegildo's grandsons — what did they do? That's when a lot of family businesses stumble. Lucas: The third generation is where Zegna really globalized. Gildo Zegna, the current CEO, took over in the late 1990s. He opened stores in China, expanded the women's line, and acquired other brands like Thom Browne. But here's the key — he kept the family's ownership structure intact. Luna: That's probably the most interesting part of the story for me. How they managed the IPO in 2021 without losing control. Lucas: Yeah, let's get into that. In December 2021, Zegna went public on the New York Stock Exchange through a SPAC merger. But the Zegna family retained about 85 percent of the voting power through a special class of shares. That's a level of control you don't see often in public companies. Luna: Eighty-five percent. So the public owns a piece, but the family still calls the shots. That's one way to stay patient. Lucas: And patience is the whole game with a family business. Gildo Zegna has said in interviews that they measure success in decades, not quarters. That forest in Trivero — it takes fifty years for a tree to mature. You don't plant trees if you're worried about next quarter's earnings. Luna: Speaking of that forest — it's become a real marketing asset. Oasi Zegna is now part of their brand identity. They have a whole sustainability narrative built around it. Lucas: It's genuine, but it's also smart business. They started reforesting the hills around the mill in the 1930s, long before sustainability was trendy. Today, that forest is a carbon sink, a tourist attraction, and a symbol of the company's values. You can't buy that kind of brand authenticity. Luna: And it ties back to the product. They have a fabric line called Oasi Cashmere, made from recycled cashmere. The name links directly to the forest. Lucas: That's the kind of integration that only works if the family has been thinking about legacy for a hundred years. Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many of these episodes. We don't run ads, and we want to keep it that way. Luna: Yeah, and it's not a big ask — just that if these conversations have moved your work forward in some small way, you can toss a few bucks in the jar. No pressure. Lucas: So back to Trivero. The mill is still there, still producing fabric. But the company now has over seven thousand employees, stores in eighty countries, and annual revenue around one point five billion euros. That's a long way from a single wool loom. Luna: How did they handle the transition from the third generation to the fourth? Gildo is the third generation, right? Lucas: He is. The fourth generation is already involved — his son Edoardo Zegna works in the company, focusing on digital and sustainability. But Gildo has said he doesn't believe in automatic succession. Family members have to earn their roles. And there are non-family executives in key positions. Luna: That's a healthy dynamic. You get family continuity but professional management. Lucas: And the family has a shareholders' agreement that governs how shares can be sold. It's designed to prevent exactly what happened at Gucci or LVMH — where family feuds led to a loss of control. The Zegnas have a family council, a family constitution, clear rules. Luna: What about the IPO — did the public market pressure change anything? I mean, you have to report earnings every quarter. Lucas: They've managed it. Revenue grew about 12 percent in 2025, which is solid for luxury. And because the family controls the board, they can resist short-term pressure. They're investing in leather goods and accessories, which have higher margins than tailoring. That's a long-term play. Luna: So the key takeaway from Zegna is that vertical integration, combined with a long-term family governance structure, allowed them to survive and thrive across four generations. Lucas: And the forest. Never underestimate the power of planting trees. It forces you to think in fifty-year cycles. In a world obsessed with quarterly results, that's a genuine competitive advantage. Luna: Alright, next time on Family Business Stories — we're looking at how the Molson family brewed beer for seven generations in Canada. See you then.