Temasek to buy a 5% stake in Italian luxury group Ermenegildo Zegna

Temasek has signed a share-purchase agreement with Ermenegildo Zegna to purchase a 5 per cent stake in the Italian luxury group at US$8.9 a share, for a total of US$126.4 million on Tuesday (Jul 29).

The shares will come from the company’s treasury shares, and, combined with Temasek’s share purchases on the open market, will bring Temasek’s stake to 10 per cent after the transaction is completed on Jul 30. The cash consideration will add to Ermenegildo Zegna’s balance sheet and enable the company to seize selected opportunities for organic growth of its brand portfolio.

Ermenegildo “Gildo” Zegna, chairman and chief executive officer of the luxury fashion brand, said: “This investment is a strong endorsement of our vision and long-term growth potential, while firmly recognising the global significance of the Italian luxury sector.”

Nagi Hamiyeh, head of Europe, Middle East and Africa for Temasek, is expected to join Ermenegildo Zegna’s board of directors in June 2026.

The customer base of the fashion house comprises high-net-worth individuals (HNWI) who have been more resilient in their spending. A BCG report noted that this segment spends more than 50,000 euros (S$74,380) a year on luxury brands; the wealthiest top-tier clients comprise just 1 per cent of the personal luxury goods market, but generate 22 per cent of the value.

Aspiration consumers, which make up 60 per cent of the market, have faltered in recent years, but the big spenders have consistently grown their expenditure. The segment is set to grow from about 940,000 HNWIs, holding about 68 trillion in wealth in 2024, to about 1.4 million HNWIs in 2030, with about 100 trillion in wealth.

This group is also growing in confidence. Half of them say they expect to increase spending by between 5 and 25 per cent over the next 18 months.

Temasek will bring its experience in the luxury sector and knowledge of the Asian market to Ermenegildo Zegna under this deal. The state investor will also support expansion in key geographies where the company’s presence is underdeveloped.

Hamiyeh said: “Our investment in them underscores our ongoing commitment to support leading European businesses with strong track records and global potential.”