Temasek Holdings Pte is building a 10% stake in Italian fashion house Ermenegildo Zegna Group worth about US$220 million ($283.3 million) as it expands in luxury.
The Singapore state-owned investor is buying a roughly 5% stake from Zegna after initially scooping up shares in the market amounting to another 5% holding, according to people familiar with the matter, who asked not to be identified when discussing a private matter.
Zegna shares were up 10% in premarket trading in New York after the report. The stock is up 9.5% so far this year.
The deal will help Zegna accelerate its transformation into a high-end leisurewear brand from a family-run menswear company, which was founded in 1910 as a humble woollen mill. Zegna is also looking to open new stores and renovate existing ones to offer a better customer experience.
Nagi Hamiyeh, head of Europe, Middle East and Africa at Temasek, is expected to become a non-executive board member at the luxury firm. Representatives for Zegna and Temasek declined to comment.
The Italian company in 2023 acquired Tom Ford International to try to supercharge global growth in the luxury business. Zegna sales rose 2.2% in 2024 to about EUR1.95 billion ($2.90 billion).
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The agreement with Temasek comes as the outlook in the global luxury industry remains mixed. Last week, French group LVMH Moët Hennessy Louis Vuitton SE reported a decline in second—quarter sales due to a demand downturn. Meanwhile, Italian producer of expensive cashmere clothing Brunello Cucinelli SpA saw its revenue increase.
Temasek’s net portfolio value reached $434 billion as of March 31, up $45 billion from the year before, thanks in large part to higher share prices at some of its Singaporean holdings as well as assets in the US, India and China. The firm reported divestments worth $42 billion for its last fiscal year — its largest annual disposal on record.
