Industrie Zignago Santa Margherita S.p.A.

1836–1940

Mini-conglomerate Industrie Zignago Santa Margherita S.p.A. operates in three primary sectors: glass, textiles, and wine. The company is one of Italy's largest wine producers and distributors through its Santa Margherita subsidiary. Santa Margherita operates wineries throughout Italy, including Torreslla in the Veneto region; Kettmeir, in Trentino Alto Adige; Ca' del Bosco, in the Lombard region; and Chianti Classico wines at the Lamole and Vistarenni wineries in Tuscany. The company also produces fine and sparkling wines in Veneto and Trentino Alto Adige. Santa Margherita sells some 15 million bottles per year; the export market accounts for 55 percent of the wine division's sales. Zignago's glass operations include Zignago Vetro in Italy and Verreries Brosse in France. These subsidiaries produce bottles and glass containers for the food, beverage, cosmetic, pharmaceutical, and other industries. Zignago Vetro is Italy's leading producer of glass food packaging products, which account for 40 percent of the division's sales. Zignago Vetro and Verreries Brosse also combine to form the world's fifth largest producer of perfume bottles--including the Brosse-designed Chanel No. 5 bottle. Zignago's third division focuses on the high-end linen segment of the textile market. Linificio e Canapificio Nazionale, the group's textile operation, is the second largest producer of wet and dry spun linen in Europe, producing up to 4,300 tons per year. Zignago also has a number of minor investments in other companies. Zignago itself is controlled by the Marzotto and Dona dalle Rose families. Zignago and Marzotto, owner of designer names such as Valentino, Armani, Hugo Boss, and others, have been moving to combine their operations.

Textile Beginnings in the 19th Century

Formed in 1940, Industrie Zignago Santa Margherita included operations with origins stretching back to the mid-19th century. Yet the prevailing influence in Zignago's development remained Italy's prominent Marzotto textile family. As members of the Italian nobility, the Marzotto family played a major role in northern Italy's industrial growth, particularly in establishing the region's dominance in the textiles industry, in the 19th century. The family's first textiles venture came in 1836, when Luigi Marzotto founded a woolens mill in Valdagno.

The Marzotto mill grew strongly under Luigi Marzotto and son Gaetano, who took over in 1842, and by 1880 the company had set up a second plant, in Maglio. Gaetono's son Vittorio Emanuele later joined the family firm and established a strong exports business. The company was divided up in 1910, with Vittorio Emanuele taking over the original Valdagno plant. Vittorio was joined by his son, Gaetano, Jr., who took over as head of the company in 1921.

Founding a Mini-Conglomerate in the 1940s

The younger Marzotto received credit for transforming the family linen business from a relatively small manufacturing operation to one of Italy's leading textiles companies. Marzotto stepped up the group's exports, and by the outbreak of World War II, the company's linens and wools reached across Europe, including Eastern Europe, and to Latin America and elsewhere.

The family's first textiles venture came in 1836, when Luigi Marzotto founded a woolens mill in Valdagno.

1935–1984

Marzotto also began developing a variety of other interests, such as the launch of a hotel chain, Jolly Hotels, in order to provide himself with accommodations during his many business trips across Italy. Another major investment came in the mid-1930s, when Gaetano sought a degree of vertical integration for the company's textiles business. In 1935, Gaetano bought a 1,000-hectare farm from the noble Stucky family. The purchase enabled Marzotto to enter sheep-raising and other agricultural pursuits with the stated purpose of developing a range of consumer-oriented products.

Marzotto created a new business, Societa Fondaiaria Agro Alimentare SFAI, in order to oversee the farm's various operations. These ranged from livestock breeding to dairy products and sugar production. The Stucky estate also included a 140-hectare vineyard, Santa Margherita.

In the years following World War II, SFAI adopted a new holding company structure for its various holdings. The range of the company's operations continued to expand over the next decades. An offshoot of the group's other consumer-oriented products businesses was an entry into packaging. That business became known as Zignago Vetro, and rose to become a leading Italian and European producer of glass packaging.

Through Santa Margherita, meanwhile, SFAI emerged as one of Italy's leading wine groups. A part of its success came through its willingness to develop new wine varieties. In the 1950s and early 1960s, for example, the company began experimenting with adapting French champagne-making techniques to the Trentino-Alto Adige region's Pinot Grigio grapes. The result of these experiments was the launch of a new sparkling wine variety, Pinot Grigio, which became an instant bestseller in Italy.

Three-Pronged Strategy in the 1990s

By the end of the 1980s, Santa Margherita, which was regrouped as a separate company, Santa Margherita S.p.A., had gained a leading share in Italy's wine market, particularly among the country's growing "modern" wine segment. One of Santa Margherita's modern wines was its Chardonnay, introduced in 1981. In 1984, the company founded a new winery, Cantine Torresella, in order to produce Veneto-region wine varieties. Two years later, the company acquired Kettmeir S.p.A., in the South Tyrol region.

1873–1991

SFAI itself began a process of transformation during the 1980s. The holding company listed its stock on the Borsa Italiana in 1986, and changed its name to Industrie Zignago Santa Margherita S.p.A. Majority control of Zignago's stock nonetheless remained under control of the Marzotto family and partner and fellow nobles the Dona dalle Rosa family. Over the next decade and a half, Zignago began a refocusing effort around a triple core of Wine, Textiles, and Glass. As part of its new strategy, the company sold off its noncore holdings, a process completed, in large part, by the mid-1990s.

During this period, Zignago's major shareholder, Marzotto, then under leadership of Pietro Marzotto, was undergoing its own transformation from one of Italy's leading textiles companies to one of the world's leading luxury branded clothing stables, starting with the purchase of Germany's Hugo Boss in 1991. At the same time, however, Marzotto had inaugurated a new vertical integration strategy designed to give the company complete control over the entire chain of wool and wool clothing production. This effort led Marzotto to make a number of acquisitions, including that of Linificio e Canapificio Nazionale in 1985.

Linificio e Canapificio stemmed from an 1873 merger that brought together two small linen companies in the village of Adda. Cassano d'Adda specialized in producing linen and hemp using the dry process, while Fara Gera d'Adda specialized in production based on wet spinning. The new company went public soon after, with a listing on the Borsa Italiana in 1876.

Linificio grew strongly, emerging as a regional and then national leader. Acquisitions formed a large part of the company's growth, and by the early 1920s, Linificio had established itself as the country's dominant linen and hemp yarn producer. At its height in the 1930s, Linificio controlled some 75 percent of the country's market.

Hit hard by the development of synthetic textiles in the decades following World War II, Linificio found new life in a diversification move in the 1980s. In 1984, the company decided to leverage its experience in the spinning industry by acquiring Linimpianti. That purchase enabled Linificio to begin manufacturing and distributing spinning, hackling, and related equipment.

Taking the Lead in the 2000s

1854–2003

Linificio also sought to reduce its manufacturing reliance on the Italian market. The company made a first step internationally with the purchase of France's Paul Le Bland et fils, based in Lille, in 1989. In the early 1990s, the company took a new step, opening a joint venture production subsidiary, Filin S.A., in Tunisia in 1993. By the end of the decade, Linificio expanded its production focus with the creation of UAB Lietlinen, in Lithuania. That company began production in 2002.

By then, Marzotto had grown to include fashion powerhouse Valentino, acquired in 2002. Fears of a possible takeover attempt for the company, however, led its board to propose a merger with Zignago, in which the Marzotto family-controlled holding company would pay EUR 435 million for the textile and fashion group. That plan, launched by Pietro Marzotto, was soon vetoed by other Marzotto family members.

Instead, Marzotto transferred only the struggling Linificio to Zignago in 2003. The new division then absorbed the existing Zignago Tessile, retaining the Linificio name. The merger allowed Zignago to claim a clear leadership position in the Italian linen market.

The company's wine division also had grown strongly into the mid-2000s, notably with the acquisitions of Ca' del Bosco, in the province of Brescia, and Fattoria Pile e Lamole, based in the Chianti area of the Florence region, and another Chianti-region vineyard, Fattoria Vistarenni. Santa Margherita also emerged as a leading Italian wine exporter, pursuing markets in the United States, United Kingdom, Japan, and Germany, among others. By the mid-2000s, exports accounted for nearly 55 percent of Zignago's wine business.

Zignago capped its success in wine and textiles with growth in its third core business as well. In 2001, Zignago Vetro grew through the purchase of Verreries Brosse, based in Vieux Rouen, France. Brosse had been founded in 1854, and had developed a specialty as a producer of perfume bottles. Among Brosse's many triumphs was the creation of the bottle for the famed Chanel No. 5 in 1921. The addition of Brosse enabled Zignago to claim the leading position in Italy and a spot among the world's top five producers of cosmetic and perfume bottles. Zignago had successfully woven a place for itself in the Italian and international markets in the new century.