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Sales in Greater China region dropped 17%

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CEO finds 15% U.S. tariffs manageable

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CEO says group slightly increased prices in June

(Adds comments from conference call in paragraph 4, 6,7 and 11)

MILAN, July 30 (Reuters) - Italian luxury group

Ermenegildo Zegna ( ZGN ) reported a 2.6% drop in second-quarter

organic revenues on Wednesday as sales in its wholesale channel

sank, especially for the smaller Thom Browne brand, and with

weakness in the Chinese market.

Organic revenue totalled 469 million euros ($541 million)

for the April-June quarter, broadly in line with an analyst

consensus provided by Visible Alpha.

Sales in the period were dragged down by a 17% drop in the

Greater China region.

"China remains challenging.. we should adjust to the new

normal," chairman and CEO Gildo Zegna told analysts in a

conference call.

The stronger euro also impacted the revenues. The decline in

the wholesale performance in part reflects a decision to shift

the focus away from this part of the business.

The family-owned group said it was not worried about the

15% tariffs faced by European products in the United States.

"We were a little bit concerned when we heard about the 30%

tariffs. The fact that now is settled at 15% makes us more

serene and I think we are prepared," said Gildo Zegna, adding

that the group slightly increased its prices in June.

The group also announced that Sam Lobban, who had been

working at department store group Nordstrom, will be Thom

Browne's new CEO as Rodrigo Bazan stepped down after nine years

to "pursue other opportunities".

Singapore's state investment firm Temasek agreed on Tuesday

to increase its stake in Ermenegildo Zegna Group to 10%.

Zegna said that the $126 million proceeds would strengthen

its financial position and enable it to seize any opportunities

that arise.

The group, whose shares trade in New York, has no plans to

go private or to make a dual listing, the CEO told analysts.

($1 = 0.8665 euros)