Here at CMG, we’ve always taken a keen interest in the world’s most outstanding family-controlled businesses. For a few years now we’ve even researched and published our own stories of some of these families from around the world.
A recent article in the Financial Times highlighted an iconic Italian business family – Zegna, and it’s one we’re tracking closely. Founded in the Italian Alps 110 years ago by Ermenegildo Zegna, the company is now entering its fourth generation of family ownership, with more than 500 retail shops worldwide offering the very best in luxury menswear. As the family story on the Zegna website says, “Ermenegildo Zegna’s dream was not just about fabric… (his) work and life were defined by his desire to give back. He built a road, he built a town, he gave back by building a community…”
Today, the founder’s grandson, Gildo Zegna, oversees the family business as CEO. Under his leadership, Zegna’s annual revenues have increased to CDN $1.7 billion. But he’s also facing stiff challenges – including falling consumer demand for the product that made his family wealthy: the traditional men’s suit.
Amidst these challenges, two particular insights about running a family-controlled enterprise caught our eye from the article:
A fierce commitment to remaining family-controlled and private. The Zegna family has no interest in going public and Gildo’s son, Edoardo, has recently returned to the family business after working in the U.S. for a number of years. He will usher in a fourth generation of leadership for Zegna. It’s not difficult to imagine the family having its sights on 200 years of private ownership. Says Gildo: “In the end it is about roots and it is about family roots. It is about respect for what has been created in the past.”
Zegna’s discipline in transparent family communication. Gildo sees strong family ties as being particularly helpful during challenging marketing conditions and changing competition. “It gives you strength coming back to the family in a moment of great disruption,” he says. He hosts 30 family members at the family villa every Christmas to both celebrate successes and hold an annual shareholder meeting. The gathering is about dialogue, obtaining input, and then turning the varying perspectives from family members into execution.
We’ll continue to track the Zegna family (and business) and provide occasional updates as they occur. In the meantime, if you’re interested in the full Financial Times story, you can read it here.