Zegna Warns Middle East War Clouds Luxury Demand Outlook

Italian luxury fashion house Ermenegildo Zegna has cautioned that the ongoing war in the Middle East is clouding visibility on consumer demand, even as markets across China, the United States, and Europe continue to hold steady. Executive Chairman Gildo Zegna issued the warning as the company reported its full-year 2025 results, noting that the three-week-old conflict has added meaningful uncertainty to the global economic outlook.

Regional Exposure and Resilience

The Middle East represents approximately 6–7 percent of Zegna’s total sales. Despite early disruptions at some mall locations, all of the brand’s stores in the region are currently operational. Gildo Zegna expressed cautious confidence, noting that as a high-end player, the group holds a competitive advantage over mass-market rivals and considers itself more resilient in times of regional instability. The company’s New York-listed shares, however, have declined 18 percent since the US and Israel bombed Iran on February 28.

Saks Bankruptcy Adds Further Pressure

Zegna also continued to navigate fallout from the Chapter 11 bankruptcy filing of US retailer Saks Global Enterprises in January. Losses on trade receivables tied to Saks reduced the company’s 2025 adjusted EBIT by €10 million, bringing it to €163 million, down from €184 million in 2024. Saks reportedly owed Zegna approximately $26.3 million at the time of filing. Shipments to the retailer resumed in the first quarter for spring-summer collections.

Despite these headwinds, Zegna said direct consumer sales in the first quarter are tracking ahead of Q4 2025, and the group remains committed to its 2027 strategic targets, which may be revised depending on how the conflict unfolds.