Zegna buys into Aus wool dynasty

The company's chairman, Paolo Zegna, announced the joint venture in Sydney on Tuesday, saying a key goal of the investment was to better promote Australian finewool as a rare, special and sustainable fibre.

Sitting next to Count Zegna in the trendy Glass Brasserie in Sydney's upmarket Hilton Hotel was Charlie Coventry, the former owner of the 2564-hectare "Achill", 35 kilometres east of Armidale, who has retained a 40 per cent stake in the farm and will be in charge of day-to-day management.

Count Zegna said the purchase was a dream come true for his family who for generations had discussed buying a wool property in Australia while Mr Coventry, 42, is a sixth generation farmer whose family has been growing wool for 175 years.

"Achill" was bought by Tyrell Coventry, a former president of the Australian Superfine Woolgrowers Association, and his son, Charlie, in 2001.

The investment has completed the "full circle" for Zegna which will now be involved in every step of the Merino wool supply chain from the farm to the final consumer.

"We will now know the name of the sheep and the name of the customer," Count Zegna said.

He said his company was looking forward to learning about Merino wool production from Mr Coventry in order to better tell the "story behind this beautiful fibre" to its customers around the world.

A key motivation for investing in "Achill" was its scenic setting amid rolling hills and river valleys which had the potential for the creation of a showplace where visitors from around the world could come to learn about Merino wool production in an ideal setting, he said.

Mr Coventry said the partnership with Zegna would speed up the development of "Achill" which is now running 12,500 sheep and 1000 cattle. All wool from the property will be delivered into the Zegna manufacturing pipeline which supplies high-quality clothing to outlets in more than 100 countries.

Count Zegna sympathised with the plight of many Australian finewool growers because of low prices but was confident the industry had a healthy medium- to long-term future.

He blamed part of the industry's current depressed demand on a glut of low-micron wools which lacked the strength and quality normally associated with superfine wool, a problem made worse by recent drought in some key finewool regions.

China, now the major buyer of superfine clips, also tended to chase microns without fully considering the other key characteristics of the wool.

Production of wool below 17.5 microns has jumped by well over 250pc in recent years which has given Australian superfine growers a major headache.

Count Zegna said the Merino industry had to attract young customers, many of whom viewed wool as "the fibre of their father or grandfather".

He praised the recent global efforts by Australian Wool Innovation to reconnect customers to high-quality Merino wool products but said much more had to be done by everybody in the supply chain.

Merino wool needed to find its way into more market segments including casual wear, sportswear and knitwear, he said.

Count Zegna said his company wanted to increase demand for its woollen products which, hopefully, would lead to higher prices for producers.

Management "Achill" will be overseen by a board with Count Zegna as chairman, Charlie Coventry as managing director and leading finewool buyer, Don Belgre, as the third director.

Count Zegna didn't rule out further expansion in wool production but for now wanted to focus on making the "Achill" venture a success.

The joint venture was welcomed by the chairman of AWI, Wally Merriman, as an innovative step to further reinvigorating the wool industry.

"Zegna has been a strong supporter of the Australian wool industry for over 100 years and today marks another firm, constructive commitment in support of the industry," he said.