Operator
Good afternoon. Good morning, everyone. Thank you for joining the Emelo Gildo Zainia Group FY 2025 Preliminary Revenues Call. Please note that today's material and presentation are available under the zainiagroup.com website. Joining us today, the Zainia Group leadership team, including Gildo Zainia, the Group Executive Chairman, and Gianluca Tagliabui, Group CEO. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The group actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statement's cautionary statement included at page 2 of today's presentation. I'll now hand over to Jill Dozania.
Good morning and good afternoon, everyone. Thank you for joining today's call. our first caller is executive chairman and for Gianluca Taliabue as Group CEO. Very exciting indeed. As you know, in November last year, we announced a new leadership structure, a positive step forward for me and for our group, having appointed Gianluca Taliabue as Group CEO and Eduardo and Angelo Zegna, my two sons, members of the fourth generation of the family, as co-CEO of the Zegna brand. This decision marks an important milestone to further strengthen our group and smoothly prepare the next generation of leaders who will carry forward our legacy, just as we have done for over a century and will continue to do so. By 2025, also, is an important year for our business performance, particularly for the Xenia brand. The group total revenue were 1.9 billion euro with Xenia brand reaching 1.2 billion euros. These results were driven by the strategic DTC channel. In Q4, both the group DTC and Xenia DTCs delivered a sound 10% organic growth. For Xenia in particular, these results have been led by Americas and EMEA, with also China slightly improving, although remaining volatile. The Zenia brand strategy over the past years has been clear and coherent. In 2025, we delivered consistent and strategically aligned milestones, from the fashion show in Villa Zen in Dubai, to the Art Basel partnership, from the launch of the Velocaro collection to Villazine in Miami and last but certainly not least the recent beautiful for winter 26 fashion show Milano a family closet where the brand opened the doors of the family closet taking pieces from the family wardrobe including mine as well as those of my grandfather because a closet is much more than space in which we keep our guards protected For us, it is a shrine where the beauty of cherished item is celebrated. In the family closet, Alessandro Sartori presented a timeless collection. Peace is designed to remain alive for generations to come. Because only memories can define identity and give the unique meaning they were over a lifetime. Something only Zenia heritage and mastery can create. The show was acclaimed by press, buyers, and clients as one of the best this menswear fashion week. The fashion show was complemented by Villa di Zegna Milano, our private club. An invitation-only temporary store, reaffirming once again in Milan the strength of this foreman, which allowed Zegna guests to experience our family heritage, century-old textile excellence and leadership in craftsmanship and su misura. bravo to all people starting with saltori eduardo angelo and who conceived this concept and continue to deliver strong and consistently improving results i just went want to emphasize that unless we had our filiera from textile down to the clothing chain we could have never have achieved this result so a bravo also to all factory people and and the know-how of our tailors and artists done in the factory let me now comment on tone fashion which in 25 was a year in which we further shaped the evolution of the brand's fashion business the first collection designed by Hyder, which is the winter 25 collection, received very good results, as noted during last year in the call. In the past weeks, we have been introducing the spring 26 collection, the second by either that is, as we speak, also receiving a real positive response in the store. But above and beyond this, the team, led by Lelio Gavazza, is working to cement Tom Ford as a true brand of influence in the high-end fashion industry. we know that our journey is not yet complete but the team is built the plan is set and we now have to execute together our priority for 26 will be to reinforce the brand momentum and resonance and to expand its high-end customer base moving to tom brown in 25 we continued on our part to reduce the brand exposure to the wholesale challenge as you know we appointed sam Laban, a CEO, to transform the company into a retail-first organization. I am pleased to see the initial, although still timid, results of this strategy. Q4 DTC delivered good growth, even if still driven by new opening. We all know these results are not yet where we want them to be, but they confirm that we are starting to take the right step. our focus for 2026 will be to deliver sound DTC comparable store sales grow to sharpen our collections and marketing strategy these will allow us to evolve our customer base and continue elevating the quality of our wholesale partner and lastly I want to comment on our filiera it continues to be our state of the art laboratory where we test refine and develop fabrics that represent the absolute pinnacle of the luxury world and where our craftsmanship know-how continues to set us apart. We remain the custodian of this heritage while strengthening it further because we know it is what makes us different from any other player in the history. The Trofeo Wood Fabrics, our iconic fabrics, born in 1965, reinterpreted today and presented at the Zea Fashion Show is a further evidence of it. Looking to the year ahead, I believe we all agree that we must face a new normal. And by new normal, I mean a world more uncertain and less predictable. In this context, agility, coherence, vision, speed, together with talents, we make the difference. We know the road may not always be linear, but we must face it with determination. prudence and with the same courage that has always distinguished my family and our group the courage to be pioneers who are remaining true to who we are as the main shareholders of the amazing group our family and i personally are fully committed to growing it and to making it even more solid for the generation to come this is the undisputed goal for gianluca eduardo Angelo, Leio, Sam and myself and for the entire leadership team. Thank you.
Good morning and good afternoon to all of you. Before commenting on the full year 25 revenues, let me begin by expressing my gratitude to the board, our shareholders and above all to Gildo for the trust shown in my regard. It is an honor as well as a clear responsibility to step into my new role and I will carry it out with the utmost respect for our unique century-long heritage. In my new capacity, I will work closely with the CEOs of our brand, Sam, Lady, O'Angelo Edo, to ensure that we can fully leverage the group's strengths in our integration and accelerate our ambitions. At the same time, I will continue to oversee our manufacturing platform of finished products and corporate functions. Gildo has been a mentor to me, and I know he will continue to stand by my side and by all of ours to continue to guide us and safeguard our unique legacy. So, thank you, Gildo. Let me now move to page 8 of the presentation. As always, I will comment on the organic performance, which excludes foreign exchange impacts and therefore better reflects the underlying business dynamic. In 2025, we reached 1,917,000,000 in revenues, plus one versus last year, and 591 in U4, up 4.6% organic. In the last quarter of the year, Xenia Brand reported 362,000,000, plus seven, driven by the DTC channel that has been landed at plus 10 for the brand. Tom Brown reached 91 at plus 1.4% organic, and Tom Ford Fashion reached 98 million euro, up one and a half points. Let me now move to the following pages for a deep dive. Turning to page nine, we comment on the performance by brand in the quarter. Xenia brand recorded 362 in revenues plus 7% growth, driven by the solid sequential acceleration in the DTC channel, specifically in Europe, Middle East, and Americas. Tom Brown reported 91 in Q4, plus one, also in this case driven by a good performance in DTC, driven by new openings. Tom Ford's fashion landed at 98 million revenues, plus one organic, with the DTC channel growing faster. Finally, we observed textile growing at plus one. Moving now to page 10, we see revenues split by geography. Europe, Middle East, and Africa represented 36% of total revenues in full year 25 and was up plus seven in Q4, with a solid performance in the DTC channel, in particular at Xenia Brand, which offsets a negative impact of the wholesale channel rationalization. The Americas, which counted for 30% for the full year revenues, recorded plus 16 increase in Q4, despite the challenging comparison of the last quarter of last year. This performance was underpinned by the strong DTC momentum at Xenia Brand, which continues to deliver outstanding results, thanks to the robust brand momentum and the team fully capable of executing our strategy. Indeed, Xenia Brand continues to grow sound double digits in the U.S., as well as with the U.S. consumer cluster. Moving on to greater China region, in full year 25, the region accounted for 23% of total revenues, so it's half of the incidence compared to the time of listing of our group in 2021. In Q4, GCR reported a revenue decrease of minus 10%, a sequential softer performance compared to Q3, which is only due to Tom Brown and Tom Fort and to the wholesale channel across this, in this case of wholesale channel, across the three brands, whose quarterly performance was influenced by different delivery time. Zenia TTC specifically improved in the quarter while still being negative. We expect China to remain volatile throughout the year, and as you know we planned accordingly the budget of 2026. last west of asia pacific in q4 reported plus five percent growth driven by sequential improvement at both zenya and tom ford fashion specifically in japan and korea moving to page 11 let me go quickly through it since we will comment on the trend by channel for each brand i will only highlight that the DTC channel at group level reported plus 10% growth in Q4 in sequential acceleration compared to plus 9% in Q3. And in full year 2025, DTC accounts for 82% of groups' branded revenues, which, as you know, exclude textile and other revenues, which are B2B business groups. Let's move now to page 12, where we deep dive on Xenia brand revenues by distribution channel. In Q4, Xenia DTC revenues grew 10%, accounting for 88% of full-year 2025 brand revenues. As we mentioned, we saw an acceleration of performance in the last quarter, notwithstanding the solid base of comparison across regions in Q4 of last year. As we mentioned, the Americas and Europe, Middle East, and Africa continue to report solid double-digit growth. Great China region revenues remain negative, but with an improved trend compared to Q3. Revenues from the Chinese cluster improved sequentially in the quarter to a mid-single-digit negative. At the end of December, the number of Xenia DOS was unchanged compared to the end of September. Moving to wholesale, where the brand's revenues were down minus 17 Q4 and accounting now for 12% of overall revenues for the year. The performance reflects the deliberate actions put in place by the brand to rationalize the distribution of iconic Zenia products and to increase direct control on the distribution channels. Moving to page 13, Tom Brown revenue split by distribution channel. DTC revenues for Tom Brown were plus 11% in Q4 in sequential acceleration driven by Americas and Japan, supported by some relevant store openings such as New York Madison, Los Angeles Maros, Palm Beach, and Ginza Tokyo. In the quarter, Tom Brown had one net DOS closure in Asia. As broadly discussed during the year, the brand is continuing its activity to defocus from the wholesale channel, reducing volumes injected. Thus, the wholesale channel reported a minus 14% in the quarter and minus 40 in the full year. As already anticipated, we will continue to see negative performance in the wholesale channel also in 2026, thus at a significantly lower degree than the 40% seen this year. Let's now move to the last but not least Tom Ford Fashion revenue split by channel, page 14. In Q4, Tom Ford Fashion reported DTC growth of plus 5%. This performance reflects a sequential deceleration versus Q3, as already indicated in our prior call, since the higher base of comparison and the decision to place significant emphasis on Haider first collection in Q3, which has been supported by strong commercial and marketing activation. let me also anticipate that the brand has started the year positively benefiting from the very good reception of the spring collection at the end of december the number of tom ford fashion dos was unchanged compared to the one of september the wholesale channel reported minus four in revenues in q4 in line with our strategy to strengthen direct control on distribution on page 15 you Page 16, you find a summary of the group store network, which is now composed of 282 directly operated store for Zegna, 123 DOS for Tom Brown, and 66 for Tom Ford. Before opening to the Q&A, let me conclude with a brief comment on SACS Global. SACS Global filed for Chapter 11 bankruptcy protection on January 13. Sachs is an important partner for many luxury brands including our group. We are closely monitoring the situation as Sachs works to stabilize its operations and to negotiate terms also with respect to past due receivables with all vendors including ourselves. At this stage these discussions remain ongoing, their outcome is still uncertain. Our group has the financial and business strength to absorb this extraordinary event, considering the limited incidence of SACS Global on the Zenia Group revenues. Paola, now I defer to you in the Q&A session.
Thank you. Thank you, Luca. Thank you, Gildo. And please, operator, can you open the Q&A session?
Operator
Thank you. We will now begin the question and answer session. If you would like to ask a question today, please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind and would like to be removed from the queue, please press star and then two. Our first question comes from Chris Wang with UBS. Chris, please go ahead. Your line is now open.
Hello. Hi. Thank you for taking my question. It's Chris from UBS. First of all, congratulations on the very strong results at the Zainabrand DTC. So I'll actually start with my first question on saying our brand DTC. I was doing some calculations and, you know, looking at the comments you just gave on Chinese consumers, it does seem like the brand, excluding Chinese, accelerated to, in Q4, around high teens, a percentage growth year over year. Can you maybe confirm if that is, you know, the right understanding and also connected to that? What is the mood you are seeing year to date in 2026? Of course, if we put aside China due to the different timing of Chinese New Year, but I just wanted to understand a little bit more any color you can give on the start of the year for other markets. Second question on FX, I think we've been hearing some of the other peers reporting so far in Q4, so with the current rates in mind, can you help us a little bit on what kind of FX impact you are expecting for 2026 on an even margin level, how much of a headwind we should expect? Thank you very much.
So, Chris, thank you. Thank you for the questions. I think they are both for Gianluca, even if maybe on the first one, I'm sure that also Gildo wanted to add some color on the start of the year. The first one is on the calculation, Xenio DTC, X Chinese, if it is on the high teens, as calculated, and then on the forex.
You're good in math, Chris. Yes, I think it's a right calculation. In terms of forex, we have seen 2.6% headwind on currency this year. It's the delta between reported growth and organic growth. We are seeing something similar for the year. So that is our budget. If we expect currencies this way, of course, part of that can be mitigated by edging. Of course, we have edged specifically very much so spring 26. We are already well covered on fall 26, but of course, this will fade out. So there will be definitely an impact also from currency. That's why I think, if you remember, I talked about margin 26 moving sidelines, because inevitably, if this is two, three points, will have partially an implication on the numbers, still partially covered by edging, but not entirely.
And then, Nicola, on the start of the year, excluding China, that Chris is saying, now we know that the Chinese New Year is having an impact.
Okay, so Chinese New Year, I don't need to remember, but last year was 29th of January. This year is on the 17th of February. So comparing January to January, we are against the peak season of last year. So if you isolate, if we isolate the effect of the calendar of Chinese New Year, we don't see a trend significantly different in DTC, of course, from the one of Q4 2025.
No, we see resilience in America. america keeps uh big our number one market in terms of uh percentage growth uh followed by the gulf gulf area and i think european you know is doing pretty well uh so uh we we just are past january and i think that january is following the trend of q4 so so far it's good thank you um chris if we answer uh can uh shall we move to the second thank you thank you our next question comes from anthony char chavji with bnp paribas
anthony please go ahead yes thank you good morning it's anthony from bnp paribas First question would be on Xenia retail and the productivity that is now quite close to 20,000 per square meter. I think you're targeting close to high single digit improvement per year. Can you just remind us the key drivers here and also remind us the rollout of your new perfume for the Xenia brand and what impact could it give for full year 26? My second question would be on the profitability indication, probably for this year, if I may. The consensus is at around $173 million, and if you see some upside or not, given the strong DTC. And my third question, and I'm a bit sorry to ask about SACS, but really curious to know your exposure at group level. You have a few shopping shops, especially Zenia and Tom Ford, I think. And on top of revenues, maybe an indication on the inventory exposure and if there is anything to flag in terms of potential provision or how we should model this.
Ciao, Anthony. So the first question is on Zenia productivity and the key drivers for this year and also going forward. So for sure it's for Gianluca as much as the perfume rollout, which has just started in any case, so very early. Sorry, the second question. Did you ask consensus 26 or 25?
25, okay. And such exposure. I think they're all really for Gianluca.
So the Zenia DTC, you said it's on the 20,000 per square meter. So we are, of course, that is one driver of growth for not just for 2026, but for the three year. And the driver so far will continue to be mixed and price, price mixed together. Of course, we have been elevating the offer successfully, and it's keep on growing. So, for instance, now we have launched a new version that is the NAMC version of Triple Stitch, which goes in the same direction. We are intensifying the density of the collection of Belusaro. More will come through the year. So, MIX will continue being the driver of our growth, together with events, which means the activations that we are doing above and beyond the stores. The Villa Zegna is a perfect example, but there are some that are less visible, which are sweets or trunk show. So that world of elevated offering, elevated moments, is the main driver of our increase of productivity. Zinnia France, from a client perspective, you see this reflected in the growth, which is very positively double-digit on Zinnia France, still in 2025, and will be continuing doing so next year, while we not only foster the already existing Zinnia France, but as we have exposed in some of the recent meetings we are targeting what we call the doers that are the clients that are slightly lower the threshold than your friends that we want to then elevate and bring them into the threshold of the new friends which i recall is some some clients that are spending for 50k per year with us in terms of consensus the one that you mentioned And I think for 2025 EBIT, it is reasonable, of course, pending the effect of a bad debt accrual that is linked to Sachs Chapter 11 evolution. So if you isolate debt, yes, it is reasonable. We need to take into consideration which is something we cannot do today because we are monitoring the evolution. And we will continue doing so right until March when we publish the numbers. What is the situation and the needed bed debt accrual that we have to book? Which is, of course, something that is extraordinary and it's affecting the exposure. You mentioned inventory. I think it's not an issue of inventory. It's a question of how much we need to accrue in terms of bet debt. Inventory is not an issue because it's more on the credit side. Of course, I think I also answered on SACS. We cannot comment more than this because it's all in flux and we are having clear conversations with them. And I think more than this, we cannot comment.
I don't know if the question, Anthony, was also on the SACS overall revenues exposure, or if, in any case, I think it has been said, but it's in the low-middle single-digit area.
So the overall magnitude of Sachs Global in the different dimensions, Sachs, Neiman, MBGs, represents a low single-digit incidence on our group's revenues. So that's why we face the situation with looking forward with optimism that we can offset the impact of this situation.
Thank you very much. Thank you. Grazie, Anthony. Thank you. Operator?
Operator
Thank you. Our next question comes from Chiara Battistini with J.P. Morgan. Please go ahead. Your line is now open.
Thank you very much. It's Chiara Battistini from J.P. Morgan. I have a couple of questions, please. The first one on the U.S. that's strongly accelerated in Q4. i was wondering if you could deep dive a bit more on the colors on on the drivers of this acceleration especially between new customer acquisition versus the returning customers that you're trading up and then also whether you could share some details on about subsides and conversion and asp and how those are evolving especially in the us and then the second question on the wholesale numbers, a group level for Q4, both Q4 and 2026. On Q4, I was just wondering if there was any impact from stocks, maybe if you add back any shipments that might have had a negative impact on the wholesale development in Q4, and then any early guidance on how to think about wholesale for the three brands into 2026, please. Thank you.
Grazie Chiara, thank you. Okay, I think they're both for Gianluca, but then if Gido wants to comment more on the U.S. market, I'm sure that he can give us some nice colors and on the whole sale is Gianluca for sure.
It's a mix of things. I think that Zainia is continuing to be extremely successful both with loyal clients and with new clients coming in, whether through the typo stage or through a mid-tour. So it's, of course, Villa has been an important driver. So Xenia is a very rounded acceleration across the board. Tom Ford, Tom Brown, there is definitely, as I said before, some openings, which has generated new clients, whether it's New York Madison or it's Melrose Place. And Tom Ford has been a very good acceptance of the new collection that has been put together, starting in August and September, because that was the peak moment of pushing the collection of either, but also through Q4. And as we commented at the beginning of this year in January, we have seen good momentum on spring. So I think that three brands are seeing good traction in US. In wholesale, your question, we are definitely wholesale will not be a driver of growth in 2026. We expect the decrease to be lower than this year for the three brands. Of course, it will also depend from the SACS evolution. So at the moment before any major change on the SACS landscape, the wholesale channel is expected to meet high single digit negative for the year with a higher decline on Tom Brown which could be in the low single low double digit meetings range so that is the scenario that we have in front of us of course isolating any situation on SACS that for the time being is still liquid in terms of uh evolution thank you and just to confirm also for the zenya brand sorry sorry for the zenya brand the wholesale wholesale channel will remain negative in 2026. yeah yeah it will be as i said if i said high single digit group and tom brown is a low double it means that Xenia will be negative if you love.
Okay, thank you Chiara and if you have a follow-up we can move to another question, another analyst, sorry.
Operator
Thank you, our next question comes from Bumi Kanaba with Jefferies. Please go ahead, your line is now open.
Hi Bumi from Jefferies, congratulations on the results today. Just two questions from me, if I may. Are you able to quantify what the Dubai, Zolotto and Villa Xenia Milan contributed to organic growth in Q4? And then secondly, you commented on your happiness with EBIT consensus for the full year. But on the revenue base reported today, consensus has about a 13.9% margin for Xenia segments. Do you think this can get above 14% or close to 15% given the operating leverage from Q3 and Q4?
Okay, on Villa Zegna, well, that has not impacted Q4, if this was your question, but I leave Mr. Gildo to comment a little bit more on Villa Zegna, which I think is a very important concept that we will continue to leverage on. On the EBIT, in particular, the question was on ZENIA brand EBIT for full year 2025, if I understood well, I leave then Gianluca to comment.
I want to stick to the comment on consensus at group level for the time being, because today is also... But when we, I think Anthony was asking if we confirm the consensus of 173 at group level, yes, before SACs close, yes, of course. Of course, the numbers of Zegna DTC have been specifically positive, so we might see some impact on that, positive impact, yes. That is to be expected.
Okay, Villa Zegna, you know, it's a long journey. We started a few seasons ago with this project, which I think that highlights the personalization and the high-end product of ours. and i think the the clue there is that we try to localize only villagenia villagenia are not all alike but we try to make them one different to the other and i think this is an exciting journey because also a customer that has bought before can find newness and differences on the villagenia to come that's number one number two i think that more and more customers are embracing this project because it's about experience it's not about selling because the most of the product you can't find the village area you cannot find them in the store and so i think the level of service the level of surprises the level experiences the level of product innovation created by alessandro satori are quite unique our intent is to continue this journey We have a couple of destinations set that are still secret for this year, but surely they will complement a new store opening and maybe also market where we don't have stores because that gives us the possibility to reach our customer without knowing of their store. So Milan was extremely successful, more than what we expected, as has been Dubai. And as a matter of fact, for you that want to visit St. Vila Zia and Milani, we'll still be there for several months to come. And so enjoy your journey because I think that is something very, very special. Thank you.
Thank you, Bumi. Can we move to another analyst or investor?
Operator
Thank you. Our next question comes from Oliver Chen with TD Cohen. Please go ahead.
Hi, Jill, Dylan, Jean, Luke. Congrats on the leadership transition. Regarding what you're seeing in greater China as well as the cluster, are you expecting things to get less negative there? I know it's a very dynamic and volatile environment. What are you seeing in terms of traffic and or what you're monitoring with that consumer and how it interplays with your results? Second, regionally, America continues to really execute, but the comparisons get tougher. Do you anticipate double-digit increases at Zinnia brand to continue? And which products within the Zinnia brand have been performing better versus less good as well would be interesting to know. Thank you.
Thank you. So a couple of questions, very interesting as always. The first one on GCR, are we seeing the environment less competitive and what are we seeing there and then the second one, which I'm sure Gildo would take it is how are we executing in America, even if and what we expect there, even if the environment and the basic comparison for us is becoming increasing challenges. So I might leave the first one for Gianluca and the second one to Gildo, if it's okay for you.
So in order to see the momentum in China, I've been there recently, early January. So probably we can see some slight improvement in Hong Kong if we want to see the overall picture rather than in mainland. mainland itself we are still taking a prudent approach because the environment is volatile then we can take a draw more definitive conclusion after the end of Chinese New Year end of February so for the time being I would not raise the flag that we see a change in momentum probably with the exception of Hong Kong and for our momentum in the U.S. and our market
I said it before I think our momentum in the U.S. we surely continue for Zenia because we are becoming better and better thanks to the new product offering that is well received by our customer and number two we are opening new stores there is a surely a good trend not only for Zenia, also for Tom Ford. And I think that for Tom Brown, we opened a good number of stores also in the mail recently, so we hope that the results will come in 2016. So overall, bullish on America, on the three brands. We know that there is this SACS situation that, as Gianluca said, will be monitored very closely, but we remain positive on the on the outcome of the situation we are continuing you know investing in both marketing and in new store development which we have done a few years ago and i think the results are coming thanks to that foresight and i believe in in a market that seems to be you know resilient to also geopolitical situations, for us at least.
On wholesale, I had a question on wholesale. Where do you expect it's 12% of revs at Zinnia, but when you look longer out, what do you think the mix of wholesale as a percentage of revenue should be, perhaps at Zinnia as well as Tom Brown? And on the Tom Brown strategy, awareness and marketing is obviously a big opportunity, as well as continuing to commercialize the Tom Brown business. Just would love to know where you are in that journey and key catalyst ahead there as well on the Tom Brown brand.
Sorry, you're asking only about Tom Brown or about the three brands? Three brands.
Wholesale at Zinnia and then the mix of wholesale at Zinnia and then Tom Brown just strategy awareness build and change.
On Zinnia we are you know getting close to 90 percent I mean retail versus wholesale and I think this journey started quite a while ago when we decided to convert the wholesale into concession. I think that was an important step we have taken. And plus, you know, as the productivity of the store climbed, surely that was a very favorable situation. On Tom Brown, it's a transition and surely the future will be more on direction retail. We have decided to cut the wholesale in the past two years. And I think that we still have some little work to do but i think most of the of the of the work has been done and i think that retail can have a good progress because we have enough stores of uh tom brown around the world it's just a matter of to improve the productivity and to become a stronger retailer and on tom ford i think america is very strong we are going to strengthen our distribution in In Europe we can anticipate the new store that will open in Paris by the end of the year. And we are opening also the same store on the same road. So this is a good coup, plus adding a few stores in America and Asia remains a big territory to be done that will be coped in due time. But overall, our future is more and more retail and less wholesale for the entire group.
Thank you, Oliver. And let's go to the next one if there are further questions.
Operator
Thank you. The next question comes from Adrian Duverger with Goldman Sachs. Adrian, please go ahead.
Hi, good afternoon. Gildo, Gianluca and Paula. Thank you very much for taking my question. Adrian Duverger from Goldman Sachs. First, congratulations on the great show for Xenia in Milan earlier in January. And then I have three questions, if possible. The first one would be on the performance of the Chinese cluster in the fourth quarter and on the underlying demand trends for the group and by brand, and also what you would expect for the rest of 2026. My second question would be on pricing. How do you think about the pricing environment and the overall opportunity to continue to drive higher pricing from the product mix? My last question would be on the higher spending cohort. I think we've seen that they have been quite resilient so far. Has there been an increase in their proportion this year versus last year in your revenue numbers? And if so, do you see any difference between the different geographies? Thank you very much.
Thank you, Adrian. Okay, so for the cluster, for the Chinese cluster, sorry, we might not have said, but when we comment cluster, we comment Xenia brand. So the comment on the cluster was referring to Xenia brand. In terms of pricing, how we see the price environment and the spending cohorts, so the higher spending cohorts, which has remained more resilient this year, I leave to Gianluca and to Gildo to comment on this, on the pricing, Gianluca, and then we move forward on the cohort.
Pricing, as we see, 2026, we are facing spring and fall with mid-single-digit price increases in order to offset the currency evolution. So that is the pricing we are taking is in that regard. It's not repricing for the sake of repricing, but to offset the currency fluctuation. And on the spending, iSpending cohort, the evolution, I defer to Gildo, the success on iSpending.
I think that we have, in particular in Zenia and Tom Ford, I think we have set up a goal to go after the big spender. And I think that all the broader development is in that direction, including the personalization project, which we are second to none. I think every time we apply those assets, we see the customer expense. And so I think that the increase has come more from the high spender than from the less spender. And so I think that our goal is to continue going that direction, both for Xenia and Tom Ford, and we are preparing us to do the same with Tom Brown. Know that the personalization project is fueled by the Xenia filiera, by the Xenia supply chain, so this is an advantage. So there is no reason why, if it's well done, for Zenia cannot be done the same for Tom Ford and Tom Brown and I think this is something that we are developing and strengthening this year for the years to come.
Yeah and on spending cluster I can add the Zenia side that we see extremely good momentum on the clients above the 25 000 pending that are the ones that we nurture in order to get to Zenia France and of course also the ones above 50,000 that are the ones labeled as Zenia France. So those clusters 25 to 50 and 50 and above are the ones that are driving the growth on the Zenia brand specifically. On China, probably one thing that we already mentioned and will become more and more present in 2022 is the pruning of our retail footprint that is going on both on the Zegna brand as well as on Tom Brown. So the numbers of Zegna of GCR already in Q4, but even more in 2026, we will give preference to rationalization of stores to concentrate business in fewer, better stores.
Thank you. Adrian, if you don't have a follow-up, we might move to the other question, the other analyst or investor.
Operator
Thank you. The next question comes from Maria Meta with Bernstein.
Please go ahead. Good afternoon and thank you for taking my questions. I have two. First, could you please break down the growth at Xenia between price mix and volumes and how do you see is evolving into the next year and then second what actions are you planning to undertake at top for to sort of keep the momentum the strong momentum from last year um going into 2026 thank you okay thank you maria uh leave to gianluca to comment on zenia brand the price mix and volume and to the tom for the momentum it's um the driver is price mix more than one and will continue being this is the pattern.
It's consistent with the trajectory and the strategy and the positioning of the brand. We want to focus on elevated items, elevated moments, elevated clients, so price and mix. Price, as I said before, in order to defend the margins, rather than just repositioning life or life to increase the margin, but to defend the margin. And it makes, because we are creating more and more collections that carry sophisticated materials, more elevated details in the making. So it mixes the driver together with price.
In terms of the Tom Ford momentum, how we keep this momentum into 2026?
Tom Ford will have both comp as well as space. So Tom Ford is today distributed in 60-70 doors and it's a brand that will deserve 100 stores in the mid-term. So we will also use that lever and for instance in US consistently with the success that we have seen we are going to open a few stores in the year. Palarbo will be one for instance that be open apart from Paris that Gildo mentioned before. So there will be space and of course All the activities that we have been putting together, investing in these years in retail team, merchandising, IT, CRM, are all levers that we are deploying in order to replicate the same go-to-market model of Xenia. So, the cadence of product, the activations of clients with CRM tools, all these are the levers that we expect to generate increased revenues on a like-for-like basis.
Thank you. Operator, I don't know if there are follow-up questions.
Operator
Thank you. Our next question comes from Daria Neslevsha with Bank of America. Please go ahead.
Hi. Hi, everyone. Thank you very much for taking my questions. I have three. The first one, to follow up on one of the previous questions on China and also given your outstanding performance ex-GCR as of today, is there anything outside of macro that keeps senior brand from closing this gap in performance in China versus the rest of the world? for 2026 and also for the medium term, because I think that's pretty important. Number two, could you please share your thinking around development of your store base for 2026 across your three brands? Any indications that we could be using for our models and maybe anything to comment also on the CapEx cycle? And the third one, can I please follow up on your thinking on EBIT margin development into next year? How should we be thinking about this, as you said, flattish because of effects between gross margin versus OPEX leverage slash leverage. Thank you very much.
Okay. Ciao, Daria. Thank you for all the three nice questions. First one on China. The question is, is there anything on 2026 that it's outside macro that can cause us for, or they are, let's say, limiting our performance in China. And I'll leave to Gianluca to comment on this. And then the second and the third are more numeric questions on store development and EBIT margin development on 26.
I think that we monitor ourselves compared to competitors, of course, and I think we are seeing more or less in the same location similar trends. So we don't judge to be a specific brand-related topic. So it's more related to macro. It's more related to the appetite of spending that we are. And, of course, to the fact that there we are not using space as a lever. It's vice versa. We are shrinking the network. So I think it's probably that is the combination of a macro with something that is specific to us. I would just say the network that is not in our favor, it's more on the opposite.
In terms of development of stores by brand for 2026, you comment already that basically for Zegna, you should assume no space or very little space contribution or not?
I want to, we already mentioned on Tom Ford, we have definitely three stores that are in U.S. that are coming. One is Ballarbor, as I mentioned before, San Diego in Costa Mesa. There is Paris.
At the very end of the year.
Yeah, mostly will be on the second half, this one. And there will be Paris, women. On Tom Brown, there is no impact on Delta space. So, probably there will be some stability more than anything else. On Xenia, we have some openings. The most important ones that come to my mind are still a couple in US, San Diego's Cops There is one in China, which I call out, which is counterintuitive because we are reducing but there is one that we are going to open in Shenzhen Bay, which is an important city from a technological standpoint. We are opening a couple of stores in Middle East, in Riyadh and Abu Dhabi. These are the main relevant openings that we see going forward.
And in terms of margin, Daria, you commented on margin 26 to be flat-ish. and how you comment on this.
No, we confirm the the the move, the movement on the sideline with. Possible some improvement on the margin, of course, but there is an impact on the. On the. On the top line coming from the depolation of the effects, so I would not enter into the detail, whether it's because margin or POPX. we have said that it will be more lateral than a steep increase i will stick to this yeah okay thank you and moving to the next one grazie daria thank you thank you the next question comes from natasha bonnet with morgan stanley please go ahead hi thank you very much for taking my questions and congratulations on the good set of results, particularly the Zegna brand.
I've got a few questions. The first just came back to your comment on the group EBIT margin moving sideways in 2026. What level of growth have you baked in for margins to move sideways? I see ConsenSys has 5.4% organic next year. And do you expect Tom Ford EBIT to turn positive in 2026? And then the guidance, I guess, on EBIT 12% in 2028. That's where consensus is. Does that still make sense? The second question would be, could you please tell us your exposure to the Triple Stitch franchise in 2025? And my last question would just be, you mentioned store rationalization at the Zegda brand and Tom Brown in Greater China. Could you tell us how many stores you're planning on closing, you know, this year and next?
Thank you very much. okay thank you natasha and uh sorry the first uh well we really lost a little bit in translation with all the numbers that you mentioned but the reality is what i would like to call out is natasha this is a call on revenues so we might leave all the questions on margins when actually we report margins uh in uh in march if you don't mind um so the second question you had on triple stitch but i didn't get the real quest the the actual question sorry so it was the your exposure in terms of revenue now on triple stitch high exposure okay yes so it's um it's in line of the 15 one fiber that uh you remember we said so shoes overall including also other shoes is around the 20% of our revenues and triple stitches as we said in the 15%, 1,5%. No changes from the past. And the third question was, or is?
Sorry, the store rationalization.
The number of closures in China. Yes, yes, right. So I'll leave this to Gianluca. Thank you, Natasha.
It's not specific to 2026, but in the midterm probably we might have 10 stores that we are not renewing at the expiry. So that is ballpark on Zenia. We might have some others also on Tom Brown. Tom Ford is barely distributed, so I don't see a major impact from Tom Ford, but definitely on Xenium might be 10 stores. Not in 2026.
Yes, over the medium term. Okay, Natasha, if it is final, we can move to the next one. I'm not sure if there are other questions on the line.
Operator
At this time, we have no further questions on the phone lines, and so Paola, I will hand back to you.
Thank you. Thank you. Thank you to everybody for the many questions. Actually, we like them all. And of course, we remain at your disposal, Alice and myself, to any follow-up question that you have. We are here anytime, and we reconvene on March 20 for the full year results. Thank you so much, and I'll speak to you very soon.
Operator
Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.
