Good morning, everyone. Welcome to the Ermenegildo Zegna Group's first half 2024 preliminary revenues conference call. Let me introduce the Ermenegildo Zegna Group senior management: Chairman and CEO, Mr. Gildo Zegna; Chief Financial Officer and Chief Operating Officer, Mr. Gianluca Tagliabue; Chief of External Relations, Mrs. Paola Durante. Documents for today's call are available on the group's website, including the presentation that will be discussed during the call and the forward-looking statements that you can find at page two of the presentation. Let me now hand over to Mr. Gildo Zegna. Good morning and good afternoon to everybody, and thank you for joining today's conference call on Ermenegildo Zegna Group first half 2024 revenue. For me, our call is not only an important moment to look back on what we have achieved, but also a moment to discuss what lies ahead. In H1 2024, the group reported EUR 960 million revenue, with a 6% growth reported and 8% across in currency. Q2 contributed for EUR 497 million, +5% year-on-year, with an improved underlying organic growth. Indeed, excluding changes in the perimeter and the impact from currency, our organic performance improved from -5% in the first quarter to flat in the second quarter. These are results that I consider acceptable, in particular in the current consumer and sector environment. Now, let me update you on a few important projects and on the future. Starting with Tom Ford Fashion, you read that Peter Hawkings is stepping down as creative director of the brand. I want to thank Peter and wish him all the best in his next chapter. A new creative director will be announced in the near future, and as we look to the next phase of the brand's development, I'm even more excited about the bright future of this business and convinced about the potential of Tom Ford brand. Our goal is to create a much stronger, more global, and more diversified luxury business. Tom Ford is a strong brand, and we can also make it a larger fashion business by doubling down on women, strengthening day wear, and very importantly, by enforcing leather goods. In the meantime, the team is working seamlessly to execute our plans. We're opening a new store in Taormina that is performing ahead of expectation, and we also just opened a store in Rome, one of the important Hangzhou Tower in China and a flagship in Beijing China World. Thom Browne, as you know, Thom Browne has been a driving force for the group and has tripled its revenue since 2017, but not only. Since acquiring the brand, we have together understood the strength of operating as a group, the differences between our brands, and how to focus on what each brand can do better. 2024 will remain challenging, and I'm deeply convinced of the unrealized potential of the brand. Thom is a new designer, always true to himself with no compromises. The couture show in Paris was a masterpiece, and many fashion experts said so. We're taking strong action, starting from the deep holistic organization to a thorough review of the organization. When you go fast, sometimes you might not have a balanced organization. We're working on that. We're working on upskilling the sales team and improving our merchandising offer, in particular in China, and on enforcing the management and key roles. We also began to evolve the Thom Browne language to start engaging with a wider audience, not a different one, just wider. The CEO, Rodrigo Bazan, is working on all these topics, and I think that we will soon see good results. Let's finally move to the Zegna brand. We continue to enjoy very sound growth in most markets, with +6% organic growth in H1, with EMEA, Japan, and the US leading all double-digit the performance. The Greater China region instead continues to be impacted by an overall challenging environment. Even though Zegna is outperforming the sector average in the region, I know we can do much better. We're working on the management team, on the people in stores, and on the overall organization. Villa Zegna is the home of the founders, a villa, his house in the heart of Oasi Zegna, that we are now recreating around the world to explain the authentic legacy of our soul. Villa Zegna reflects the brand's approach of interacting with its customers, offering them immersive experiences into its story and values to foster emotional connection to the brand. In May, the Villa Zegna activation in Shanghai confirmed once more that the brand is strong in China and perceived as a leading timeless luxury menswear brand. In September, we will move Villa Zegna to New York to reveal a vision and story, the story of Ermenegildo di Monte R ubello, the grandfather, a pioneer who in 1938 traveled to New York on an ocean liner to meet with the best American tailors making Zegna fabrics known across the United States. Villa Zegna will have storytelling across the globe, Zegna's authentic legacy, moving our engagement with clients from relation into experience. The power of the brand's authenticity was also confirmed by the success of our critically acclaimed 25 summer fashion show, our Oasi Lino Parade. Oasi Lino is a collection made by fully traceable linen fabrics, and Alessandro Sartori, Zegna Artistic Director, has been able to create once more an authentic show appreciated not only by the press but also by the clients and wholesale partners around the world. Lastly, one word on our Filiera, our verticalized process from ship to shop. I attended the Ideabiella in Milan, the world's most important textile fair recently, and I can see how meaningful our textile fragment is in terms of innovation and creativity to foster the uniqueness of our brands. Looking ahead, the current global consumer environment is difficult to read. Volatility and uncertainty seem to be rising. We need to work on cost control, and we are ready to do so, but we do not want to sacrifice important products for all our brands to continue strengthening their authenticity and desirability. My family has been running the company for more than a century, and we are here for at least to say. We have always run it with a long-term vision. This will not change. Along with the group's leadership team, we are working hard to uncover our brands and exploit the growth and to deliver on our ambitions. Now, let me turn over to Gianluca to go into the revenue detail. Thank you. Thank you, Gildo. Good morning, good afternoon, everybody. Let's move to page 11 of the presentation where you find our consolidated revenues for the first half and the second quarter of this year, including the by-segment information. First of all, let me make a general comment. As you know, H1 and Q2 consolidated revenues include the Tom Ford Fashion business, which has been integrated since April the 29th of last year, and the acquisitions of the Korean businesses for Thom Browne on July the 1st of last year and for Zegna on January 1st of this year, pursuant to which the group started to directly operate the business for Thom Browne and for Zegna brand in that market. Therefore, when we refer to organic revenue growth, or simply organic, we neutralize from the group perimeter the effect from Tom Ford Fashion changing scope before April 29th of both years and the Korean-related changes in scope, and we apply also the constant currency approach. Therefore, in the first semester of this year, group revenues reached EUR 960 million, as Gildo mentioned, up 6% on a reported basis, up 8%, excluding 2% points of negative currency effects. Currencies continue to be a headwind also in Q2, mainly related to renminbi and to a lesser extent to the yen. On an organic basis, group revenues in H1 were down 2.7%, with a sequential improvement by quarters. In Q2, organic growth was flat, to be precise minus 0.4%, driven by an ongoing solid trend at Zegna brand and an improved, although still negative, performance at Thom Browne. In Q2, Zegna segment, which I remember includes Zegna brand and textile and the minor third-party brand revenues, Zegna segment, as I said, recorded positive organic growth despite the flattish performance of the textile business. Let's move now to page 12, revenues by brand. Before going into the details, let me underline that commenting the following pages, I would largely concentrate the comments on the organic performance dimension. As commented also by Gildo, Zegna brand showed a robust performance also in Q2 with a +5% organic growth. These results have been driven by both channels and an ongoing sound growth in Europe, the Middle East, the US, and Japan. Zegna brand in the semester accounted for almost 60% of the group revenues. Moving to Thom Browne brand, in Q2, Thom Browne revenues reached EUR 88 million, down -18% in organic terms, still driven by the channel mix rebalance. This performance showed a trend improvement compared to Q1 when it was -35%, also thanks to a less challenging base of comparison. By region, Japan continued to show outstanding double-digit% growth for Thom Browne, while Greater China Region remained challenging, even if with some small signs of improvement. Commenting on the Tom Ford Fashion brand, please remember that organic growth includes revenue generated by the Tom Ford Fashion between April the 29th and June 30th in both 2023 and 2024. Therefore, it's the first time we see the organic measure for Tom Ford Fashion, and we report with a positive mid-single-digit% organic growth for this period of the year when Tom Ford Fashion reached EUR 83 million of revenues in the quarter. As already mentioned, the textile performance, which reported a flat organic growth, was influenced by a decrease in demand from the non-captive brands. Under the other revenue line, we include mainly revenues generated with third-party brands. This line of business can now be considered marginal since, with the acquisition of 100% of Tom Ford International, we integrated the Tom Ford Fashion line in the group, while before it was accounted within the third-party brand revenues, largely explaining the substantial decline of this revenue line in the reported figures. Moving to page 13, displayed by geography, looking starting from Europe, the Middle East, and Africa, in Q2, EMEA recorded a good +3% growth organic-wise, with a strong improvement from a negative -6.5% organic growth organic decline in Q1. This result is driven by an ongoing double-digit growth of Zegna brand in the region and the less demanding base of comparison of Thom Browne in the regional wholesale channel. Moving to the Americas, this region recorded solid +5% growth in Q2 on an organic basis driven by Zegna, ongoing very good results in the DTC in all main markets, despite a more challenging base of comparison, in particular in the U.S. Greater China region revenues declined by 10% organic in Q2, showing a slight improvement versus the -13% of Q1. Zegna continued to outperform the group average in the region, and we also believe continues to outperform the sector. As said, Thom Browne remains double-digit negative in Greater China, although with some small signs of improvement. Given the current revenues trend in the region, we have taken some cost control actions to protect as much as possible our margins, thus, although we confirmed all the key projects to support our brands in the area and globally. For instance, this is what we did with the Villa Zegna experience in Shanghai, which had very good results and confirmed that the brand resonates strongly among ultra luxury consumers also in China. Thom Browne continues to work on its top of the pyramid clientele, management concentrated on the in-store experience, starting from client advisor, merchandising, and CRM approach. In the rest of Asia Pacific, let me underline the ongoing strong performance in Japan for all our brands, with a strong double-digit organic growth in Q2 for both Zegna and Thom Browne. In terms of cluster, anticipate a question that I know might come out. For the Zegna retail business, U.S. cluster keeps on growing on a solid double-digit pattern compared to last year, also in the second quarter. The cluster of Zegna clients from Greater China is single-digit negative versus Q2 of last year. Even if I'm sure you already know, it's important to underline that the largest part of the Chinese buys domestically for Zegna, and therefore the trend of revenues of GCR is not that different from the trend of the cluster itself. Moving to the revenues by channel, page 14, I would limit the comments here because we will then analyze the performance by channel, specifically by each brand, which I believe will provide you more insight. A couple of quick comments. In Q2, DTC channel grew 10% reported or 2% organic, driving the group performance thanks to Zegna brand positive contribution and to the addition on the reported side of Tom Ford. In the semester, DTC accounted for 70% of total group revenues or 76% of branded revenues, that is, excluding textile and other revenues line that are by definition a B2B wholesale business. In Q2, wholesale performance for the three brands was -4%, -5% organic, thus with a significant improvement versus the -26% organic of Q1. This trend improvement reflects a much lower decline at Thom Browne wholesale and the sound double-digit organic growth at Zegna in the second quarter. Let's move to, at this point, the detail by brand. Page 16, the Zegna brand breakdown channel. In Q2, Zegna DTC revenue grew 4% organic, accounting for 87% of the brand revenues. The DTC channel recorded sound double-digit organic sales in EMEA, Americas, and Japan, while GCR remained on the negative side and pulled the average 2% or 4% organic down. In the quarter, the brand opened 2 net new stores from 277 to 279, and among this, we remark an important opening in Taormina, where we catered to our key customers. In the quarter, Zegna wholesale recorded +12% organic with good growth in all markets. This performance has been driven also by anticipated deliveries of the Fall/Winter 2024 collection. Moving now to page 18 to analyze Thom Browne performance by channel. In Q2, the DTC grew by 13% reported or -12% organic, which is excluding the Korean market contribution in both comparable periods. In Q2, the wholesale in organic terms declined by 22% compared to -47% organic in Q1. Commenting the wholesale improved performance, let me underline that it has been largely driven by a less demanding base of comparison, as we already commented during the Q1 conference call. The decision to rebalance the channel will continue to drive performance also in the second half of this year. Let's now finish page 20 with the comments on Tom Ford Fashion. I remind you that looking at the reported performance with Tom Ford Fashion, the reported performance can be misleading because it compares 3 months consolidated in Q2 of this year with likely more than two months consolidated last year. For this reason, Tom Ford Fashion organic, which is a better proxy of performance, shows, and this is what we remarked, it shows a positive 4.7% in the two months that are comparable in the two years. In Q2, Tom Ford Fashion revenues reached EUR 83 million with a DTC contribution close to 60% of brand revenues. Both channels show the positive performance. DTC in the quarter has been driven by Europe, also thanks to increasing travelers' demand and some successful openings like Taormina, which has been a new opening also for Tom Ford Fashion. Wholesale has been strong thanks to some different timing in deliveries and a sound demand from US accounts. Now I hand it over back to Paola. Thank you. We are now ready. Finished with the presentation. I'm ready to take your questions. So, operator, can you open up the Q&A session? Thank you. Thank you. 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. Our first question comes from Anthony Charchafji with BNP. Please go ahead, Anthony. Your line is now open. Yep. Hi, good morning. It's Anthony Charchafji from BNP Paribas. I have three questions, if I can. So first of all, congrats on the strong organic result, especially in DTC. I have a question on the exit rate. If you can comment on the organic performance in June versus the quarter, and maybe if you can give us some color on the July trading so far, especially with the Chinese cluster, if it's still down a single digit for Zegna brand? My second question would be on wholesale. So I think during Q1, you guided Zegna wholesale rather flat for the full year. It is up 5% reported and 10% organic in H1. So do you confirm the guide? And also, I'm asking because it's to try to understand the shift in deliveries now that you have this monthly drop-based strategy, because I initially thought that the comps were actually tougher now, but maybe I made a mistake on that. And my third question would be on Peter Hawkings. So yeah, it was a press release from the Estée Lauder company. So I'm just wondering if it was a choice they made on their own or if it's you who specifically asked for a change. And also, if you can give us some colors on the reason and the implication on the existing strategy. It's more a question because if there is a risk of losing existing customers, as Peter was working with Tom Ford, the designer for some years with a similar brand identity. And maybe a last one, if I may, on the reporting. Yeah, it's more a reporting question, but I see that you're adjusting the Pelletteria Tizeta manufacturing company in H1, so basically into Q. So it's a shift of revenue from Zegna to Tom Ford Fashion. You didn't make it in Q1, and you made it in Q4 2023. So yeah, just wondering, yeah, the implication on that and what we should expect in terms of margin for the Zegna segment. I believe it can be slightly boosted due to that. Thank you. Anthony, thank you very much, actually, for all your interesting questions. I will leave the first two to Gianluca. Can I just answer quickly on Peter? Because then also Gildo can make any comment. But just to say that clearly, just to highlight that the press release was a Tom Ford press release, not an Estée Lauder. So just to make sure that we are on the same page, I mean. And then I'll leave Gildo to make any comment. I'll take also before leaving the word to Gildo and Gianluca on the reporting part. Actually, the producer that is now under Tom Ford was previously accounted in Zegna segment, but not Zegna brand. It was into the other revenue line. Okay. So let me start from the last one on Tom Ford. I think that first of all, let me say that along with this team, Peter has contributed to the important initial phase of the development of Tom Ford Fashion. And so we thank him for that. And I cannot say more than just confirm that a successor will be announced in the near future. And Lelio Gavazza, the very valid and solid CEO of Tom Ford Fashion, continues to lead Tom Ford Fashion and working very closely to the CEO of Tom Ford, Guillaume Jesel. And we are very confident that we will successfully deliver our long-term ambition. I cannot say more, but that's where we are. Thank you. And that's to Gianluca for the exit rate in July. Hi, Anthony. So the exit rate from the quarter and the entry rate into Q3 are not different from the average of Q2. So if we look at, of course, I'm commenting on DTC because looking on a monthly basis, wholesale might be misleading. So retail June, retail July for the brands are in line with their respective average for the quarter. So we are not seeing a major shift. We are seeing the same pattern for Zegna, Europe, Middle East, Japan continuing very well. GCR, a similar trend with some nuances within GCR, but the nuance could be, if you want to have a flavor, we are seeing more softness in Hong Kong and Macau, which is for us not really much relevant. On the Thom Browne side, we continue seeing very strong Japan, the same softness that we have seen on Thom Browne in GCR. Although we have now new management in place, we see some initial small results for Thom Browne in GCR, although it's early to draw conclusions. Tom Ford, we continue seeing the US as a strong and important market. EMEA, fairly good with the openings that we mentioned. And GCR for Tom Ford is very small, so it's difficult to read. So I'm saying nothing different with the exception of that nuance of softer Hong Kong and Macau. Estée Lauder. Estée Lauder, Zegna. We confirm what we have said. So on the year, we see organic flatish for Zegna. So we are not changing our perspective. So we can maybe add one thing on the wholesale that we just concluded our wholesale campaign, and we are positive on that. And I think that the sellout of our goods at the wholesale principal account has been quite good across the board. And so they came back with a positive spirit. And then the future of wholesale, it depends on what you sell now to project tomorrow. So we have seen, even though the wholesale amount is less than the past, at least for Zegna, I think we move along the same path, both retail and wholesale, because we share similar merchandise. And some customers may buy at Zegna 57, some others may buy at Bergdorf Goodman. So we let them choose. So I think it's a good collaboration among us, and we are willing to keep going along the same path, provided we consolidate consistently our brand, which is the most important thing going forward. I connect the dots between the two ones. So when you say flatish organic and the good performance, you have to keep in mind that we are more and more taking over direct presence in some wholesale accounts. I think we mentioned already the plan of going direct in an important wholesale account in North America, which is Harry Rosen in Canada. So we are keeping flat, although the base of clients is shrinking because some clients are moving from wholesale to a concession model. Okay. Thank you very much. Thank you, Anthony. We can move to the next question. The next question comes from Chris Huang with UBS. Please go ahead. Chris, your line is open. Hello. Hi. Thank you for taking my questions. It's Chris from UBS, and I have three, please. One on Zegna, one on Thom Browne, and one on the profits. Starting with Zegna, Gianluca, you provided some very helpful comments on the Q2 trends by cluster, but just sorry to come back. I think the comment on the Chinese was down a single digit in Q2, but how about European locales, please. Secondly, on Thom Browne, can you help us just in quantifying how much of a decline we should expect in the coming Q3 and Q4 at the wholesale channel? And should we expect the weakness to be carried into 2025? And my third question on margins, I mean, so far in this Q2 earnings season, the trends we have seen from your peers seem to be continuing to slow from Q1 and into Q3 overall. My question would be on if your DTC growth in Q2 is also moderating sequentially. How comfortable are you in terms of delivering the consensus is looking for at the moment for the full year? If I'm not mistaken, the consensus is looking at EBIT of around EUR 227 million with margins year-over-year down 40 basis points. And sorry, just a little bit follow-up on the previous comment you made. You said that the exit rate in July is not materially different from the average for the quarter at DTC for both brands. Does this mean that in an environment where your comp base is getting easier, what are the underlying trends? What are the underlying trends showing? Because in theory, if comps are getting easier, then people would naturally expect the year-over-year growth rate to accelerate. Thank you very much. It's to underline a trend is the last question. Did we get it right, Chris? Sorry. And thank you for all the questions. Yeah. It's on July. If comp base at DTC is getting easier, should we expect year-over-year the growth to pick up versus Q2? Yeah. Yeah. Yeah. Okay. Perfect. I think they're mostly for Gianluca, all the questions. So starting from the first one on Zegna and Q1, Q2, Chinese. So Chinese performed fairly in line. You remember we said the mid-single digit. Now we say single digit. It's not substantially different. Of course, if we say this means that probably there is one or two points of difference. And so we wanted to call it out. Remember that the vast majority of the demand is in China, and only 10% of Chinese demand are outside of China. So some of the flow of Chinese going to Japan or some other locations, we do not take entirely benefit from. I think you mentioned also European cluster. European cluster in H1 is double-digit up. European and not European and Middle Eastern. European alone. Middle Eastern is solid, solid double-digit up. European, we don't see a change of pattern in Q1 and Q2. Then you asked for Thom Browne wholesale. You have seen two different quarters. One was Thom Browne wholesale was -47%, and we mentioned that was an adjustment vis-à-vis a very tough comparison basis because it was very strong the shipment in Q1 of 2023. Now we have a -22%. Looking forward, we cannot stick to a specific number, but definitely the trend of Q2 is much more reasonable if you want to project a second half. So I would consider a second quarter a much more meaningful basis within our goal of reshaping the client base of that brand. In terms of margin, of course, we will be more specific when we present the first half EBIT. I remember, I think, that we already mentioned there will be, of course, an effect of costs more balanced, more weighted in the first half. For instance, advertising as a typically last year, we had 40% in first half and 60% in the second half. This year will be the other way around. It will be two-thirds in the first half and the second. We will have cost controls that will kick in mostly on the second half of this year by trimming down everything that is not essential or discretionary. The positive impact of cost cutting will be on the second half. We will be more specific on September. In terms of consensus, I can state that we are recognizing the revenue consensus. And in terms of EBIT, we'll be more specific, as I remind, in the call of September. Okay. Thank you so much, Chris. There was another follow-up. Sorry. Yes. The H2 underline a trend that, again, is, I think, for Gianluca. So sorry. Which one? The underlying trend in July going into an easier. I think you're right when you say easier comp, but we are working here on three weeks of July, so we cannot yet take entire benefit, I think. We see more going forward, both the easier comparison and kicking in the effect of some important openings. And I defer then to Gildo to list some of those because there is a strategy around this. So I think that on the second half, more than just the three weeks that we are in, we can take benefit of some easier comparison and some openings, and I invite Gildo to recall some of them. Yeah. I think that in the second half, in particular for Zegna, we're having a number of interesting openings around the world. I can mention Monte Carlo will be opening in September. The Harry Rosen stores of Zegna in Canada are going to be converted from wholesale to concession. Another important store will be open in New York, a Meatpacking District area, which I think is becoming very, very interesting also for wealthy customers. We have an opening in Wuhan SKP. It's a new development of Mr. Ji in China. We will have Honolulu in Hawaii going back to Ala Moana probably in December. And then we have Riyadh in Saudi and one concession of Lane Crawford in Hong Kong. So I think there is a variety of interesting locations around the world that will consolidate our leadership in different parts of the world. Going to Tom Ford, Lelio Gavazza, after having unveiled Taormina, Roma, and Hangzhou Tower, the prestigious Lake District of PRC, will be opening very late in the year. Paragon in Singapore, Harrods, it's a concession. Madrid, the Four Seasons Hotel, and St. Moritz. So interesting that we test some resort area also with the brand, along with the test that we had of Zegna in the first half of this year. And finally, Thom Browne, Thom Browne, Rodrigo Bazan is working for opening Melrose in Los Angeles, Palm Beach, and a few concessions also Holt Renfrew and Nordstrom in Canada and Nordstrom in the United States. So I think that these are part of the brand development strategy to move more retail than wholesale. And as we said before, whenever we can turn wholesale into concession, we do so by keeping the partnership going. So we think that with a new collection coming in soon, for winter, I think that we are more now coming in end of August with the first part of winter delivery. I think that we could see some good traction after, I would say, a good summer because, as you know, we don't run any sale in Zegna. So we ran summer all along August, and thank God we do so because we have a lot of American and Middle East tourists visiting Europe in particular, and we went to take full advantage of that with our full-price product strategy. Thank you, Gildo. That's super helpful. Excited to see the openings. Sorry just to be annoying here because my line was breaking up a little bit. So I heard, Gianluca, you made the comment that Chinese in Q2 is 1%-2% points different from Q1. Is it accelerating or just slightly softening? If you can comment on that, please. Chris, yes, you heard correctly, but anytime we talk, we talk about Greater China Region. So also the unit of dimension is Greater China Region residents. So if we look at Chinese in this broader sense, you're right. It's one or two points lower, and it's driven by that softness of Hong Kong and Macau that I mentioned, mostly Hong Kong. Because, of course, in Macau, you don't have so much residents. But it's mostly, yeah, that slight delta is not driven on mainland China. It's driven on Hong Kong residents. Okay. Thank you. Okay. Thank you, Chris. If you're okay, we can move to another question or set of questions. If there are. The next question comes from Oliver Chen with TD Cowen. Please go ahead. Your line is now open. Hi, Gildo, Gianluca, Paola. Thank you very much. Regarding Tom Ford and the successor, there's big women's wear opportunity as well as accessories. What are your criteria, or what are you thinking about for who might make a great successor here and kind of the creative vision in terms of the next chapter at Tom Ford? Also, as we speak to Greater China region, thanks for the comments here. Is your expectation how long might this stay negative? And are the negative trends largely driven by traffic? And finally, on Thom Browne, you mentioned tweaking the merchandise in China and also widening the audience. What does that mean in terms of breadth versus depth across the SKUs and how you're thinking about the product and telling the story there? Thank you. Thank you. Thank you, Oliver. I'll leave most of the questions. I think this one for Gildo. The first one, if we understood well, the line was a little bit difficult, is on the successor possible in the Tom Ford fashion business. Given the fact that we have opportunity in leather and women's, so. Given that opportunity, which is the profile of a successor. Surely, the choice will be on somebody very strong in particular women's wear. The reason why we decided to go into Tom Ford is because we felt that we wanted to strengthen that business. We decided not to pursue with Zegna, but we will with Thom Browne and Tom Ford. So the man that will lead the artistic direction, the creative direction, will have a strong know-how of the women and will be able to develop the leather goods business fully. So yes, that will be the case. And as soon as we will be able to announce, you find out yourself that we are bullish that that is the direction, and that's going to be the next strength of developing the fashion part of Tom Ford, being a brand so strong. I mean, one of the things that we've been doing with Leo traveling the world, and we took around six months ago. We're taking another round at the end of August, is that really Thom Browne is helping us go into new situation real estate and gaining momentum together. So one brand is helping the other as well as Tom Ford. We see how interesting the Tom Ford brand development will be across the world. It's very strong in America, but I think we have a lot to do both in Europe, in the Middle East, and in lots of parts of Asia. It's just a matter of execution and having the right product, which we will have soon. We are very bullish, and we are even more convinced that we made the right choice to go into that new project. Then we have two questions on China. One is for Zegna, and the question, if I understood well, is the reason why of the soft performance of Zegna in Greater China related to traffic, mostly to traffic. The second one is on Thom Browne. I leave this to Gildo if he wants to start on the. We mentioned that the merchandise in China will evolve, and also we are looking into a wider audience. Yeah. Rodrigo Bazan is working on some reorganization on a few areas. And surely, the new person in charge of the China region is already there, and she's a strong retailer, so she will be helpful to make sure that the new retail development because we opened. Remind yourself that we opened several stores from around the past two years in Greater China because we do believe in Greater China with all the brands. And so we need a strong retailer, and that's one thing. The other thing is the merchandising. I mean, there's going to be a change in the merchandising role, and that will have a benefit also in China. And so we will see some traction going forward, both in men's and women. I must say that the women are having some interesting feedback. Korea is a fantastic market for Thom Browne, and really, we are a leader there. I wish I could be with the Zegna brand as strong as Thom Browne in Korea. And so we want to make sure to keep the leadership. In Japan, I think we have some work to do both with Thom Browne, Tom Ford, and Zegna, but I think that we surely see a benefit of the Chinese customer. We haven't talked much about Japan, but as other brands have said, we see a good momentum for revenue, in particular with the increase of the Chinese luxury brands. And we want to take advantage. I will be traveling to Japan in a couple of weeks' time. We have changed the manager too, and we have the head of Japan, both leading Zegna and Thom Browne, and Tom Ford, sorry, which is interesting. So overall, positive change of management that will procure good effects with the market, in particular, as important as China and Korea and Japan. On Zegna traffic in China, maybe Gildo to make a few comments. I confirm the traffic is the driver of the decline. We are seeing good results on the other metrics, our retail KPIs, so unit per transaction, average unit revenue. But the number of tickets driven by traffic is going down, and I think, as we all read across all the reports, also yours, we see the appetite of consumers, the feel-good factories reducing the traffic. We see it in our numbers and in our metrics. Do you think just a quick one, do you think we'll see negative traffic for the next year, like the next two years or year? Because the macros are out of your control, and we're seeing a lot of negative housing and survey work around the health of the Chinese consumer. Listen, we had many contacts with top Chinese in the last couple of weeks, and it's good to hear. And then I'll be traveling a couple of weeks' time to Japan, Korea, and China. So I have a better clue. But from what we understand, they remain positive. They know they're going through a challenging time in 2024, but in 2025, I've heard more positive than negative comments. But we are all there ready to jump. And I think we are managing what we have right now pretty well. The experience that we had in Villa Zegna a couple of months ago in Shanghai, extremely positive. I mean, we really had good traction, great interest for the XM product, exclusive product. The affluent customer, they love our brand. So I think that this is more the approach that we have to take. Don't forget that until a few years ago, Zegna was half aspirational and half upper-end in China. So now that Zegna has been canceled now two years, I mean, we are building up the new Zegna, and I think that we are in the right path. So it's just a matter of keep working on the path, and the results will come. If we go back to the traffic that we used to remember before COVID, even better. But traffic or not traffic, we're going to make it because China is number one market, and we want to keep leading it the way we did until today. Thank you very much. Best regards. Thank you to you, Oliver, for your questions. I don't know if there are other questions on the line. We have our next question, which comes from the line of Louise Singlehurst with Goldman Sachs. Louise, please go ahead. Hi, good afternoon, everyone. Gildo, Gianluca, Paola, thank you for taking my questions. I'll stick to two. I just wondered on a quick one on Zegna brand in terms of the space contribution in the period and also the expectations of space over the second half. Just given the noise around the macro, have any of the space expectations over the medium term changed at all, i.e., allocation by region or just the number of stores? Then secondly, a little bit of a follow-up for Gildo, if I may. I think you mentioned in the opening commentary a little bit more volatility, a little bit more uncertainty seems to be increasing, I think is what you mentioned. It's pretty clear across the peer group that we've heard from so far. It is a very tough environment. Is there any regional focus on that? Is it more about China? Obviously, the US seems to be doing relatively very well. I just didn't know if there's any regional color that you could provide. Thank you. Thank you, Louise, for your questions. I leave maybe Gianluca to start with the space contribution in. Zegna brand. Zegna brand for the first half, and then maybe you or Gildo to provide some colors for the next space contribution, which is new openings if we have changed anything due to the current environment. On the volatility, then we'll leave Gildo to comment. So Zegna space in the first half has represented one-third of a positive comp, of a positive organic of the positive organic metric. So this more or less is both H1 and Q2. So one-third is coming from the space. This is looking backwards. If we look forward, I think that space needs to continue being the driver. We are not slowing down. Of course, we look at the long term, and so it's within the boundaries of our 6%-7% CapEx, which we declare that will be slightly higher than our 5% normal run rate of CapEx on revenues. So we stay within that boundaries. And within that boundaries, we continue fostering the avenue of growth that we declared on one side, going direct in some wholesale, as we already mentioned, exploring resort locations as we have done in the first half of this year. For instance, we opened in Greece Astir Marina. We have opened Puerto Banús. We have opened Taormina. Palm Beach will be opening for Thom Browne in the second half of the year, Monte Carlo, which can be halfway resort. So resort continues to be a driver, especially for the Zegna brand, to represent and celebrate Zegna with its new collection into a proper environment that beforehand, with the old positioning of the brand, was not appropriate. Now, the brand is welcome in this location, and we will continue also in the second half doing these openings, which Gildo mentioned before, giving ourselves the boundaries of not overspending. When I say not overspending, it's between 6% and 7% of revenues. Gildo, there was a question. There is a question on the volatility that you mentioned during the speech, what you were referring to, if something specific or more general. Then if you want to add anything on the future projects in terms of particular spaces or new openings and important projects. Listen, on the future project, I can tell you that they are going to be retail-driven, number one. We surely are going to open stores that will not be huge and that we can get the message across with high productivity. This is what we are learning. We are going to try to respect very much local culture in terms of the merchandise we're going to have and in terms of the event we're going to offer. I think that this idea of creating events like Villa Zegna will be very helpful to gain traction of current customers with high loyalty rates and on the same new customer. In doing that, you need to keep evolving the product range. So what we have done with Oasi Cashmere and Oasi Lino is a masterpiece. We see that we are a leader in those fields. We're going to come out with a new project that we cannot anticipate early next year that will be super, super high level. We're going to put it in the top stores retail only. We're going to be preparing the evolution of our success with the Triple Stitch. We do believe that knit wear is going to be a stronger and stronger category, not only in men's but across the board. We are strengthening our production capacity and know-how on one side in shoes, but building the Parma factory on the other side to strengthen our knit wear company in Biella. Actually, we are employing new workers there with an academy. I think all of that will make our offer more interesting and adaptable according to the different stores. It's hard to see what is the season. There are no more seasons longer. We're working on a project-to-project basis. The skill is being able to be in the right place at the right time with the right product. The fact that we have an integrated supply chain helps us to do that, not only for Zegna but for the other brands. So it's a very complicated exercise, but we do believe that by strengthening our supply chain, shortening the lead time, coming out with a new innovative product, very focused, men's on one side and women on the other for the three brands with the exception of Zegna, can really keep us staying ahead of the pack. And I think that Zegna excellence starts from there. Traceability, we cannot talk about sustainability and traceability. It's a mantra for us. I think we are one of the few luxury brands and companies that can guarantee the traceability. And the fact that we control the supply chain is a very strong competitive advantage. So what I'm saying is that all that has to be communicated to the customer. So the way we put the message across through the events is very helpful. Authenticity, traceability, where we come from in order to open up to more customers. So with the loyal, it's fantastic. It's incredible the appeal that we have to the loyal coming back and wishing to get more of Zegna. The challenge is the new customer. And surely, we hope the traffic comes back. With little traffic, it's harder to get new customers back. But the outreach software we have developed has helped a great deal to make up for the difference in traffic. And so with China back to what it was and with traffic, regardless of where, high-end, I think that we can be positive in the midterm future. To tell you what will happen, who knows? But we are ready for the best, and we are ready for the worst. This is our approach. And I think that it's playing, at least for us, in the right way. A few words on the second point that was the comment on volatility. You were referring to some regions or how you see the volatility. We are living with volatility. The volatility of market is like a temperature. I mean, it's like we go from 10 degrees to 40 in a matter of hours. And so we have to be used to that. And yes, we had volatility, but we had some positive volatility too. If I think about the United States and Europe, I think that the results are better than what we expected. The Middle East is progressing very fast. We are surely not the strongest in certain parts of Asia, for instance. So Japan, Korea, Southeast Asia, okay, with the exception maybe of Thom Browne in Korea, I think there is a lot to do there. So that would be surely part of our focus. To be honest with you, we see positive volatility there. The challenge is to understand where positive volatility is and be there at the right time with the right years. When there is negative volatility, defend yourself. So it's part of the game. I think that our management is highly skilled, and we have the right database to control our customers. We think we can surely act accordingly. Thank you very much. If there is one question, we can take the very last one. It's already one hour we are on the call, but we can take the last one if there is any follow-up or any question. We have no further questions. Perfect. We can conclude our conference call here. As usual, we thank you for your participation and all your many questions that we always like and enjoy and will learn from. We are here, Alice, that is sitting next to me and myself anytime if you have any follow-up today or in the following days. I remind you that on September 18, we will reconvene for our first half full financial results. I hope you will have a good summer break or some nice days in August if you have not done any holiday yet. Thank you again. Speak to you very soon. Ciao. Goodbye. Thank you. Bye. Bye. Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.