Armani Marketing

Fashion Marketing Strategies Giorgio Armani

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Armani Marketing Analysis

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Armani - the ultimate fashion brand

Introduction

Giorgio Armani started the company of his namesake back in 1975. Being a designer

himself, he made apparel with his sense of aesthetics, beauty and luxury, a sense that

appealed to the elite of the society that today includes the royalty of Belgium, the royal

families of many Asian countries and even the opulent women from the Middle East and

the high and mighty stars from Hollywood among many other prominent customers. For

almost 30 years now, Armani has been a privately held company with the founder

Giorgio Armani being the sole shareholder.

With many sub-brands designed under the parent umbrella brand of Giorgio Armani to

cater to the specific needs of different market segments, it has become one of the

strongest fashion and luxury brands in the world. Not only has Giorgio Armani become

one of the most respected and known brand names in the fashion industry, it is also one

of the most highly valued fashion companies in the world with a value of nearly 3 billion

Euros.

Giorgio Armani is also very expansive in Asia Pacific with its multiple future growth

markets for luxury brands. For example, China is embracing premium fashion and luxury

goods at an increasing pace, and Giorgio Armani has been one of the forerunners to

exploit the market potential. There are approximately around 10-13 million Chinese

luxury brand customers. Giorgio Armani opened its Emporio Armani store next to

Shanghai's historic "The Bund" in 2004 and plans on opening nearly 30 stores by the end

of 2008.

The Giorgio Armani brand owned and run by the founder designer Giorgio Armani has

earned the much hallowed space in the fashion industry through its superior design,

relevant themes and trends. It maintains the aura of a real luxury brand. Not only has

Giorgio Armani become one of the most respected and known brand names in the fashion

and luxury brand industry, it is also one of the most highly valued fashion companies in

the world with a value of nearly 3 billion Euros.




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The Giorgio Armani Marketing Strategy

The mention of the Annual Academy Awards ceremony brings to mind the glittering

ritual, the red carpet, and the galaxy of Hollywood stars. The Academy awards have

become as much an event about films and awards as it has about the celebrities and their

fashion statements. One of the regulars at the Annual Academy Awards event along with

the stars and the glamour has been the ultra premium and exclusive fashion wear from the

Giorgio Armani stable - the Armani suits donned by the leading Hollywood men and the

Armani evening gowns and other haute couture dresses worn by the celestial Hollywood

beauties.

The Giorgio Armani company owned and run by the founder designer Giorgio Armani

has earned the much hallowed space in the fashion industry through its superior design,

relevant themes and trends appealing to the current crop of customers and by maintaining

the aura of a real luxury brand.




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The Marketing Philosophy

Unlike the usual practices of branding that are normally seen in the consumer goods

industry, the branding philosophy in the fashion and luxury goods industry is quite

unique and personality based. Most of the famous fashion houses like Christian Dior,

Yves Saint-Laurent, Gucci, Versace, Giorgio Armani and many others were built on the

personality of the founders. As design is the most important ingredient of fashion and

luxury apparel, the individual style of these designers becomes crucial to creating and

sustaining the fashion brand strategy. It is these unique designs and patterns that reflect

the personality of their creator that gives an identity to the brand and helps to differentiate

it from the crowd.

The Giorgio Armani fashion house, like many other fashion houses, has been built

primarily on the unique personality and identity of Giorgio Armani himself. The brand

takes on the identity of the founder through the designs created.

Though this aspect of the fashion industry provides fashion houses with a strong sense of

differentiation that can be conveyed in a tangible and visual form, it also poses a serious

threat. When an entire brand and fashion house are built on the basis of the founders'

personality and identity, it becomes a major challenge to keep the brand going after the

demise of the founder, something many of the fashion houses have realized in the recent

past.




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The Giorgio Armani Brand Architecture

Whenever a brand gains popularity and acceptance from its target customers in its core

business, the next obvious step for the brand is to charter a new course by venturing into

different product lines, different segments, and ever different markets. This phenomenon

seems common across industry sectors.

Giorgio Armani with its iconic popularity amongst the elite of the society and the fashion

literate segment of the market has followed similar steps by extending the brand. Today

the Armani brand architecture encompasses one corporate brand and five sub-brands,

each catering to different sets of target customers and at different price levels.

The signature Giorgio Armani line: This is the main collection of apparel that consists

of the signature Armani suits, Oscar gowns and so on, which are of the ultra-premium

price points and essentially targeting consumers in the 35-50 year old age group.

Armani Collezioni: This is Armani's venture into a slightly lower market segment. This

basically caters to the segment of people who aspire to wear Armani apparel but cannot

afford the ultimate signature line, or to those who crave to add extra products to their

existing portfolios. The Armani Collezioni brand, with a price point of almost 20% lower

than the main line, provides an excellent line of affordable fashion.

Emporio Armani: Targeted especially at the young professional segment in the 25-35

year old age group, the Emporio Armani brand provides contemporary designs that are

relevant to the target customers.

Armani Jeans: This is the lowest range of Armani apparel. This is to the value segment

what the signature line is to the premium segment. Catering necessarily to the young

adults in the 18 to 30 year old age group, the Armani Jeans collection provides a trendy

yet fashionable and luxurious line of apparel.

A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armani

fashion house. This serves as the ultimate testimony to the power of the brand. By

providing the entire range of its apparels and accessories, Armani Exchange provides

customers with the complete feel of the luxurious fashion of Giorgio Armani.

However, the Giorgio Armani brand architecture can be misinterpreted by the prospect.

For instance, the differences between Emporio Armani and Armani Collezioni are often

quite insignificant. Furthermore, in January 2005 the Armani group launched Armani




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Prive to stands for its haute couture collection. Giorgio Armani and Armani Prive can

cross borders creating confusion in the mind of the buyer.

These sub-brands help Giorgio Armani to operate in many segments of the fashion

apparel market. But this is not all. Not only does Armani straddle many segments of the

same product category, but also many different product categories.

Leveraging its strong brand equity in the fashion apparel market, Giorgio Armani has

ventured into other related categories like eye wear, watches and cosmetics. These are

made available in each of the above-mentioned brand categories to ensure that it is

available to the different segments of the market. It is usually argued that eye wear,

perfumes, watches and cosmetics are strongly related to fashion and luxury and thus it is

natural for fashion houses to extend their brands into these categories. Giorgio Armani is

a very strong example for this argument. By leveraging its expert knowledge of the

fashion and luxury industry, Armani has been able to come up with winning concepts in

the other product lines of cosmetics, watches, jewelry and eye wear.

But Armani has not stopped at just these product categories: Armani has extended the

brand into multiple other categories such as Armani Casa (up-market furniture), Armani-

branded Dolci (confectionary), and Armani-branded Fiori (Flowers). And to add to this

wide portfolio of brands, Armani very recently struck a deal with a Dubai-based property

group Emaar to come up with a chain of 14 Armani branded hotels and resorts by 2011.

As is the trend in the fashion industry to operate in the entire spectrum from apparel,

jewellery, cosmetics, watches, perfumes and luxury hotels, Armani has been able to

leverage its brand equity to be present in most of these lucrative sectors.

Today, Armani group has a retail network of 60 Giorgio Armani boutiques, 11

Collezioni, 122 Emporio Armani, 94 A/X Armani exchange, 13 Armani Junior , 1

Giorgio Armani Accessori and 16 Armani casa spread over 37 different countries.

With so many things going on in the Armani stable, it might seem a pretty picture at the

outset. But this huge portfolio of brands and product lines creates a much bigger set of

challenges to the Giorgio Armani brand strategy in the future.




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Giorgio Armani's recent marketing moves

Armani Lounge at Chelsea Football Club

The Chelsea Football Club has commissioned Giorgio Armani is to create a new look for

its Directors‟ Suite at Stamford Bridge.

To be called the “Armani Lounge”, the dining room and lounge area serves as the

principal meeting place on matchdays for the Chelsea Board of Directors and for the

entertainment of VIP guests.

In total the “Armani Lounge” covers 200 square metres for which Giorgio Armani has

personally designed a unique concept featuring furnishings from his Armani/Casa home

interiors collection.

The result is an impressive environment with the walls throughout in a mirrored bronze

colour or alternatively clad in bronze metal effect laminates and a reed effect greige

textile with marble flooring, warm diffused lighting from ceiling spotlights and table

lamps from the Armani/Casa collection.

Giorgio Armani said: “It has been an honour to create a new environment for the

Directors‟ Suite at one of England‟s most historic football clubs. Today the ambience in

which we live, work and enjoy ourselves has become as important as the clothes we

wear. I hope that the new “Armani Lounge” will suitably reflect on the elegance with

which its iconic team play the great sport of football on the field below.”

Giorgio Armani to open virtual store on Second Life

Giorgio Armani will be expanding his emporium and open an online boutique on the 3-D

virtual world Second Life. The store will allow viewers to purchase the brand's top 10

products virtually via Second Life currency, the Linden dollar, or in actuality.

More significantly, coming in September, Armani will start selling all Emporio Armani

products online in the U.S. as part of an ongoing strategy of expanding e-commerce.

"In the last seven years, I have seen mounting enthusiasm for online fashion shopping in

the United States through the growing success we have had with our A|X Armani

Exchange site," Armani told WWD. "Over this same period I have also observed the

increasing sophistication of fashion consumers shopping online, which has encouraged

me to develop this new site for my Emporio Armani lifestyle."




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A soft unveiling of the Emporio Armani site is slated for Aug. 14, while the official

launch will take place Sept. 7, to coincide with the Neiman Marcus Crystal Charity

luncheon in Dallas.

Robert Triefus, Armani's executive vice president of worldwide communications, said

that, for the first time, the designer will be interviewed online by the American public

that day. "A major American portal will organize a live chat interview with Mr. Armani,"

said Triefus, declining to reveal the name of the Web site until the deal has been

finalized.

The designer said there are only 10 Emporio Armani freestanding stores in the U.S. and

that the Web site will enable consumers nationwide to shop the entire collection

Initially, only U.S. residents will be able to shop, but the company plans to expand the

site to Europe next year and to Asia after that. "America is the most advanced country for

e-commerce. It's only logical to launch there first," said Triefus.

Armani and Samsung may launch mobile phone

Giorgio Armani is rumoured to be in talks with Samsung to launch a new mobile phone

design, after the success of Prada's and LG collaboration. The phone will likely be

released in Europe this October. However, "the two companies have not signed a contract

yet," a Korean publication stated. Armani's phone is expected to feature "exclusive

content" and, presumably, a sleek design.

Regardless, Armani's plan to team up with Samsung, which worked with Bang & Olufsen

in the past , may prove to be a smart strategy for the company. Rumour has it that Armani

and Samsung also plan to create a line of TVs, another way to marry designer chic with

tech geek.

Armani Exchange comes to London

Armani Exchange is due to open a flagship store on Regent Street this September. Along

with another flagship planned for Tokyo, it will bring its worldwide network to 119

stores. The Regent Street store will further be the largest A/X Store in the world and

feature Giorgio Armani's new retail design concept for the brand. The design balances

openness and intimacy, with large spaces and more private rooms, according to WGSN,

creating a flexibility and fluidity of access that will allow the consumer to shop in

individualistic ways to suit his or her own style.




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"The new concept underscores the contrast between dark and light, smooth and rough

textures, and shiny and matt finishes in a manner appropriate to the casual sophistication

of the A/X consumer," in a statement released by the company.

Armani sets sights on US expansion

Still going strong in his seventies, Italian powerhouse designer Giorgio Armani has

outlined an ambitious plan for expansion in the US, which includes a mega store on

Manhattan's Fifth Avenue. The fashion house will spend $100 million over the next three

years to beef up its US wholesale and retail operations, renovate existing stores, open

new stores and relaunch the Armani Jeans line in department stores.

The crowning glory, a 47,000 square foot store on Fifth Avenue, will open in fall 2008.

The location currently houses the Hugo Boss flagship store. The new complex is based

on the Armani store on Via Manzoni in Milan, which was rolled out in Hong Kong and

Munich, and which will hit Tokyo this November. The US complex will house the brands

Giorgio Armani, Emporio Armani, Armani Jeans, Armani Junior and Armani Casa, as

well as offering Armani and Emporio Armani accessories, watches, eyewear, jewellery

and perfumes. In all likelihood it will also include a sweet shop, a restaurant and bar, and

a beauty area.

Armani chose Fifth Avenue as the location for his flagship because it “represents one of

the world's unique fashion retail destinations”. He told WWD that the store will reflect

the world today: “international, cosmopolitan, multicultural, and, above all,

contemporary.”

Armani funds World Cinema Foundation

Giorgio Armani is the major financial support for Martin Scorsese's World Cinema

Foundation, which the director announced in Cannes on Tuesday. The non-profit

organization is dedicated to the preservation and restoration of important neglected films

hailing principally from Third World countries, i.e. those lacking the financing needed to

refurbish classic films. ?

"I am honoured to have the support of my fellow filmmakers to help us achieve our goal

of preserving the cinematic treasures of developing countries," Martin Scorsese told a

press conference at the 60th Cannes Film Festival. ?He further stated: ??"I am also

particularly honoured that my good friend, Giorgio Armani, has agreed to help us. His




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dedication to the preservation of Italian cinema is already well known through his

participation as Executive Producer on my documentary "Il Mio Viaggio in Italia",” said

Scorsese referring to his tribute to Italian cinema from the 1940s to the 1960s. ??

Armani, who is again working with Scorsese on a second documentary, a tribute to

Italian cinema from the 1960s until today, will also serve as a member of the Board of

Trustees. ??The friendship between Scorsese and Armani dates back to back to 1990,

when the director filmed "Made in Milan", a short documentary on the designer.

Armani Exchange enters new markets

A|X Armani Exchange is pushing its international expansion into new markets. Today the

hip, young brand opens its first store in, in Abu Dhabi , and next month it will open two

boutiques in Brazil , in Sao Paolo and in Rio de Janeiro . It will be the brand's first foray

into the South American and Middle Eastern markets.

“When we plan to open in new areas, we are always careful to make sure that the Giorgio

Armani and Emporio Armani brands are established in those particular areas first,”

Harlan Bratcher, president of A|X Armani Exchange, told WWD. “And now we are

definitely in expansion mode, we are even 10 stores ahead of schedule.” These openings

will bring the total number of stores to 108, a marked growth since the brand was

launched in 1991. The company plans to add another 25 stores in the Middle East within

the next three years and another 25 in South America and Mexico .

The openings are part of a joint venture between Giorgio Armani SpA and Como

Holdings Inc. Armani executives expect the business to almost double annual sales

volume to $550 million within the next three years and the brand plans to open another

95 stores worldwide.

Armani to dress TomKat

After much speculation about the legitimacy of their relationship, Tom Cruise and Katie

Holmes are to tie the knot. The world press has temporarily forgotten Cruise's erratic and

offensive behaviour and is focusing all its attention on the wedding of the year. The date

or location of the event is not yet known, although it is expected to take place in Italy

next month. According to a report by WWD, Giorgio Armani is believed to be the

designer creating the couple's outfits for the entire wedding. Sources said that Armani has

designed five different outfits for Holmes to wear during her wedding weekend. In Paris

for Fashion Week, Holmes revealed that she had already picked out her wedding dress.




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She was signalled in Milan as well, where she may well have been to see Armani at his

headquarters. A spokesperson for the company refused to comment.

After flaunting their new found „lurve' in front of camera crews the world over, the

celebrity couple has retreated into a shroud of secrecy about their private life. They

famously kept the world waiting for weeks before showing us pictures of their newborn

daughter Suri. They finally did in a meticulously choreographed spread in Vanity Fair.

Their wedding will no doubt be organized with the same precision to achieve maximum

effect.

Armani Casa opens Bond street store

Armani Casa, Giorgio Armani's luxury homeware line, opened its UK flagship on Bond

Street today, which is the brand's first standalone in the UK. The store's concept is to

create a distinctive atmosphere through a combination of products that range from

furniture and furnishings to accessories, décor and fabrics. Armani/Casa was launched in

2000 in Milan . Giorgio Armani's objective was to bring his philosophy of style to the

world of home interiors and in so doing create the complete concept of an Armani

lifestyle.

For sale are furniture, tableware, decoration accessories, fabrics, ornaments, lighting, as

well as ideas for bathroom and kitchen. For 2006/2007, the collection makes references

to the Far East in the Twenties and the Baroque Era harmonise sympathetically with

restrained shapes. The styles are light and curvaceous, conveying an approach to

functionality and a human dimension, in which comfort co-exists on equal terms with a

rigorous aesthetic.

Armani/Casa colours are burnt orange earthy hues, claret, lilac, silver and mother of

pearl; warm and sunny shades rather than striking contrasts. Like his clothes, Armani

favours rustic and fine finishing over dazzling and brights. Armani plans to open further

stores in Mexico City , Miami and Tel Aviv. In the near future, Armani/Casa will see

further expansion through the unique collection of Armani Hotels & Resorts that Giorgio

Armani is launching in collaboration with Emaar Properties, on e of the world's leading

property developers.

Currently the Armani Group is one of the leading fashion and luxury groups that is

privately owned. The company employs over 4000 employees worldwide, and operates

13 of its own factories. The company designs, manufactures, distributes and retails

everything from jewellery to jeans and operates over 300 stores worldwide.




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Armani paints London Town Red

Last night London saw its most fashionable party yet. Even Beyonce was in awe of

Armani's star-studded event, saying: "Thank you for having me, Mr Armani!" after her

perfomance to 1600 privileged guests. Giorgio Armani showcased his SS07 Emporio

Armani collection in London while simultaneously highlighting his involvement with the

Red Charity and the opening of Armani/Casa on Bond Street earlier in the day.

But by the standards of any fashion capital, this was not so much a catwalk show as a

stadium gig. After all, what fashion show - let alone one held in London - is presented by

Leonardo DiCaprio and Bono? Or lavishes a crowd with dinner, champagne and the

chance to eyeball 50 Cent at close range.

Armani, according to the Independent, is the most powerful man in fashion, and so it

should be no surprise that he, and his charitable cause, are able to persuade Beyoncé,

Razorlight, Bryan Ferry and Andrea Bocelli to provide the soundtrack to his catwalk

show. There were plenty of clothes for the guests to look at though, many flown in from

Italy .

Making a nod to the charitable intentions of the evening, there were splashes of red in his

otherwise grey and black spring Emporio Armani collection, as was the case with the

tomato-coloured patent belts worn with a black-and-white striped cocktail frock keeping

in tune with the 1980s trend hitting London catwalks earlier this week or strawberry-red

taffeta dresses. RED clothing refers to the charity's stated intention to fight Aids in

Africa.

Armani to open New York hotels

New Yorkers have long been familiar with the Giorgio Armani power suit. Soon they

will make the acquaintance of the designer's power suite. Construction is scheduled to

begin in the next few months on the first of two Armani hotels planned for Manhattan,

according to Joey Allaham, a New York City restaurateur, who recently partnered with

Dubai-based Emaar Hotel & Resort Group to bring the designer's hotel chain to the

United States.

Emaar inked a deal with the designer in 2005 to invest $1 billion to develop seven hotels

bearing the Armani name. Armani hotels are scheduled to open in Dubai and London by

next year.




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Armani Casa comes to London

Armani Casa is set to open its first flagship store in London in September. The new store,

located on New Bond Street , will cover 6,480 square feet spread out over two floors. The

store will offer the entire Casa line, including furniture, fabrics and accessories. “ London

is probably the world's most cosmopolitan city today,” designer Giorgio Armani said in a

statement. “There is a high appreciation for design and lifestyle, especially within the

home environment. We now look forward to offering our collection and service in this

important market.” He also said the brand was showing “very real growth” and that

opening a store in London was a logical step.

By the end of this year, Armani Casa will have 33 free-standing stores and 100 shop-in-

shops. Later this year stores will open in Mexico City and Miami .

Milan fashion closes with nod to elegant casual wear

Giorgio Armani, the king of classic, relaxed fashion, epitomized the mood at Milan

fashion week; next summer is about dressing elegantly casual. On the runway, Armani's

jackets were structured, but fashioned in ultra soft fabric, while trousers remained

comfortably loose despite a formal crease. A funky waistcoat sewn into the jacket lent

youth to the suit.

Armani preferred a trendy Nehru style blouse to the traditional stiff-collared white shirt,

kept his jeans tight and paired his outfits with pristine white running shoes. Colors ranged

from sandy beige and sea blue, to city gray.

Although there were only a few pairs, Armani did include Bermuda shorts—an absolute

must for warmer weather—in his show.

The designer presented his collection on the last day of the five-day preview showings.

Also showing was Fendi—with cropped jackets and pencil trousers—and Moschino,

where much of the show was about striped seersucker suits and shorts.

In general, Italian designers seemed to agree that next summer should be devoted to

relaxation, whether lying on the beach or hunched over an office desk. Jeanswear has

been replaced by a mix of sporty and classic clothes that would be at home at the country

club.

The summer silhouette can be divided into two types: skinny and delicate (Prada and

Burberry), or healthy and hardy (Dolce & Gabbana and Emporio Armani).




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In either case, the summer man likes his comfort. Just watch the way he casually rolls up

the sleeves of his soft jacket.

Colours for summer are quiet and cool shades of beige, blue and sea green, with dashes

of bright purple, red, green and yellow. The latter often come in shiny plasticized fabric

for sports jackets, overcoats and floppy hats, the only question mark in a very reassuring

round of collections. Although some models had shaven heads or extra long hair, most of

the hairstyles were short and neat.

Emporio Armani to show at London Fashion Week

Just when we thought fashion‟s big names were deflecting abroad, Giorgio Armani today

confirmed his Emporio Armani women's fashion collection will show during the next

London Fashion Week, on September 21.

Armani said the unique fashion music event will also celebrate the launch of his Emporio

Armani Product Red capsule collection, which includes clothing, accessories, eyewear,

watches, jewellery and fragrances.

Emporio Armani is one of the five partner brands participating in Product Red, the

economic initiative launched by Bono and Bobby Shriver last December. It is designed to

raise funds to fight AIDS in Africa, and Armani is donating 40% of the gross profit

margin from sales of the special collection directly to the charity.

Giorgio Armani said: "London is in many ways the world's most cosmopolitan and

influential city, as it has become a crossroads for so many of today's cultural references,

including contemporary art, architecture, the performing arts, literature, food, music, film

and fashion."

The show will happen as the company prepares to reopen its Emporio Armani flagship

store and café on Brompton Road in London in October. The store, which is now closed

for a complete refit, was first opened in 1988.

Armani to expand in China

Italian fashion giant Armani plans a major expansion in China with the opening of as

many as 50 new retail outlets and investments in other projects, the Italian News Agency

Ansa reported.

Giorgio Armani, John Hooks, the group's commercial director and Paolo Fontanelli, the

chief financial officer unveiled the details of the plan.




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Armani already has 35 stores in 12 Chinese cities and expects to have 40 by the end of

the year. It also has 28 sale points in large department stores, according to Armani

group's managers.

The Italian group is currently the sixth largest international fashion company operating in

China. Hugo Boss has 67 stores, while Ermenegildo Zegna owns 60.

Ralph Lauren, Burberry and Ferragamo are the other fashion majors in the country.

The new retail outlets will focus on marketing Emporio Armani and Armani Collezioni

lines and will be set up as joint ventures with Chinese business partners, Ansa reported

Thursday.

“We will choose these partners by geographic area in order to rationalise our joint

ventures to have no more than seven or eight partners,” Fontanelli explained.

Armani's other investments in China will centre on its Armani Casa (Home) line and in

the hotel sector.

The fashion group already has a hotel in Dubai and within two years plans to open one in

Milan. Ten other hotels are in the planning stage, the first of which will be built in

Shanghai.

Giorgio Armani kicks of Milan Fashion Week

Milan Fashion Week got off to a sexy start with Giorgio Armani showing a feminine

collection confirming the maestro of androgynous fashoin is walking a new path.

"Women want to be sexy, so I will make them sexy," Armani said after a much-

applauded show yesterday in the theatre of his Milan headquarters. The new Armani

silhouette is petite and fitted with below-the-knee, hip-caressing skirts in soft fabrics,

paired with dainty jackets cut close to the bodice. There wasn't a pair of trousers in the

entire collection.

Colours strayed from the earth tones of the Armani palette: There was fuchsia, turquoise,

amethyst and garnet mixed with dashes of white, gold and platinum. "The world is

changing and so is fashion," the 71-year-old Armani said. But the designer, who traded in

jeans and T-shirt for tie and jacket for his after-show curtain calls, has no intention of

being left behind.




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Armani online

Luxury fashion and personal care brand, Giorgio Armani will soon be offering its

perfume and cosmetic ranges online. According to the company, the website will

incorporate the same design features as its stores, including a beauty bar allowing

customers to view the products lined up in front of them. Another innovative feature will

be the real time model feature, which will allow the user to see products, such as lipstick,

applied to an on-screen model, allowing them to judge the shade for themselves.

Mr Armani noted, "I am approaching the launch of this website with the same attention to

detail and the same commitment as when I open a new boutique. This, however, is our

virtual store and it has been designed to take advantage of all the benefits that the Internet

now offers in terms of communication and commerce." The launch of the site will be the

first time that the entire collection of fragrances and cosmetics from the Giorgio Armani

group will be shown together on the internet.

Giorgio Armani to expand cosmetics

Giorgio Armani Cosmetics is expecting a major double-digit increase in sales this year,

its managing director Renaud de Lesquen stated. Same-store sales will also see a double-

digit increase, he says. The makeup brand will double its number of doors next year, he

adds, from 95 currently.

“We want to control everything we are starting to look a bit wider and look at

propositions from other retailers.” The expansion for next year will notably include 20

further doors in the US and 50 upscale perfumeries in Italy, de Lesquen says. He explains

that while the brand's focus has been on specialty or upscale department store doors, it is

now widening its reach to include certain perfumeries.

The brand will open a store-in-store in Paris, France's Le Bon Marché department store

on December 5. The 40m2 Beauty Walk has a runway-like feature with a screen showing

Armani fashion, with the brand's products on show to one side, and makeup stations to

the other. Previously, only the brand's fragrances were available at the store. Armani

fragrances are available in some 20,000 points-of-sale worldwide.




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Armani in resort deal

Italian designer Giorgio Armani, who has built his fashion label into a brand empire

covering everything from fashion to flower arrangements to furniture, has signed a deal

to open at least ten hotels and resorts bearing his name.

Armani agreed the joint venture with Dubai's EMAAR Properties, which will invest more

than £549 million, taking care of real estate, building and management. Armani will be in

charge of the design and styling of the hotels, which will be full of his furniture, fashion

and beauty products.

Armani may open in Ireland

Italian luxury retailer Armani may open its first stand-alone store in Ireland. The

company is in talks to open at Castlethorn Construction's Dundrum Town Centre in South

Dublin. A source has said that Armani is "semi-committed" to the venture. The new shop

will not be run as a franchise, but directly by Giorgio Armani's company in Italy.

The new centre will house some of the best names in the fashion business, including

Harvey Nichols who will be opening there later in the year. "In terms of names, it's

probably the best centre in Ireland," said a source. The Armani Group saw its profitability

grow by 23 per cent to EUR89 million (GBP 63.16 million) in the first half of 2004, with

revenues rising 5 per cent to EUR644 million.

Armani Prive

Fragrance is the most democratized wing of fashion, because everyone can get a piece of

the designer life at a good price. But with Armani Prive - four unusual, sophisticated

scents, only available at this Sloane Street store and Harrods in the UK - Giorgio Armani

is doing something different.

"Not everyone will be drawn to them," he says, "but that's the point. Less obvious scents

will appeal to those who know how to wear my clothes." Armani Prive from £120. For

more information contact 020 7235 6232

Armani Goes For Couture

Giorgio Armani is throwing caution to the wind in the struggling climate for fashion

couture. The Giorgio Armani atelier - modern eveningwear made to haute-couture




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standards - will debut on the catwalk during the Paris haute-couture shows in January

next month.

The lure of haute couture for Armani is likely to be its red-carpet appeal as much as its

kudos. Like John Galliano at Dior and Karl Lagerfeld at Chanel, Armani is extremely

well connected to the fashion glitterati. And the January shows are, of course, perfectly

timed for Oscar dress shopping.

The future of Armani

For anyone wondering what will happen to his empire when Giorgio Armani decides to

retire, the Italian designer's recent revelations provide the answer.

Armani told Le Monde that he plans to sell the business entirely. He does not wish to

burden his nieces and nephews with the running of a 4,500 man workforce. Neither does

he wish to float the company on the stock market, as this would weaken the group and

would put it at the mercy of those "who do not always understand the business of

fashion". It is also inconceivable to him to be a minority shareholder in the company that

he founded, so the only solution is to sell the business lock, stock and barrel. However,

Armani would only consider selling to someone who understood that the business should

be left in its present state, with the current team intact.

In the meantime he plans to re-invest 70% of the group's cash flow in order to remain

independent.

Armani's about-face

Italian designer Giorgio Armani has decided to change tactics. After 40 years in the

fashion business, the 70-year-old dynamo has admitted that he needs to allow more

people to view his collections. He revealed that he has to allow room for criticism in

order to move ahead and do the one thing he loves.

His new attitude to his work was revealed in his last fashion show. It was a grandiose

affair, held in New York, attended by over 2,000 readers of Paper magazine and a

smattering of celebrities. For the first time ever, Armani admitted "regular people" in to

witness the catwalk presentation, which included Ricky Martin strutting his stuff in

Armani designs.

Armani still going strong




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The Italian designer is to collect the Superstar Award at the Fashion Group International's

Night of Stars this week. Receiving this lifetime achievement award at age 70 might

indicate a winding down of his career, but Armani assured reporters that this is absolutely

not the case. He is determined to continue with his work, and is considering working with

L'Oreal or LVMH.

The designer admitted that he has no interest in an IPO and that he does not want to

burden his family with too much responsibility once he retires. However, he is not about

to retire yet. Yesterday he presented his latest collection at Pier 94 in New York. He

called the show “a little gift to New York". With this grand gesture Armani ensured that

he still has a long road ahead of him.




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Giorgio Armani's marketing challenges

The founders' dilemma: This phenomenon is classic and occurs for any company that is

built on the basis of a strong and charismatic founder and leader. As the main competitive

advantage for the company is the founder/leader himself, neither the founder nor the

company would think of life after the founder. Moreover, whenever the companies'

success and survival depends very heavily on the existence of a single person, such

companies and its leaders should take proper action from an early stage so that proper

leaders can be nurtured within the organization.

The Giorgio Armani company is a classic case of founders' dilemma: Giorgio Armani,

the CEO and owner of the Armani brand is in his early 70s. However, the company

seems not to have made any plans for life after Giorgio Armani. In a recent interview,

Giorgio Armani was quoted as saying that the search for a corporate partner and a

successor was "not for the today, not for tomorrow but perhaps for after tomorrow".

Though there have been cases where companies after much effort have been able to stand

up and live after the demise of their founders, those are the rarities. Armani should

formulate a structure in his company along with his key management people to put in

place a definite structure that identifies and nurtures future and upcoming leaders who

can carry on the business even after the demise of any single individual. This aspect gains

a bit more importance in the fashion industry as the personality, concept and ideas of

individual designers prove to be real competitive advantages. Keeping this in mind,

Giorgio Armani should tackle this challenge when there is still a considerable amount of

leeway to play with.

Brand dilution due to over-stretch: The primary objectives of businesses are to earn

profits and to enhance shareholder value by maximizing ROI. One of the main reasons

that businesses invest in branding and brand management is for the same reasons. Strong

brands, as is well known, provide companies with a very powerful tool to enter newer

markets with limited investments by leveraging their strong brand equity. It gives

companies numerous revenue streams. Given this simple but strong fact, it is not a

surprise that most of the strong brands in the world have leveraged their brand equity and

extended their brands into newer product categories, newer markets and even newer

market segments.

Armani, when analyzed in this light, has extended its strong brand equity a bit too far.

Though the core business of Armani is in fashion apparel business, it has extended its

brand into categories as different as luxury hotels and even confectionaries. The




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examples that immediately come to mind are those of Calvin Klein and Pierre Cardin.

One of the many reasons that these brands diluted their brand equity was because they

used their brand names on a very wide range of products. One of the main factors that

make fashion houses and their products premium are their exclusivity. By franchising

their brand names to literally everything, these brands lost a significant portion of their

strong brand equity.

Though Armani might have extended its brand to hotels because luxury travel is catching

up fast as a fad with elite travelers, managing the brand along these different dimensions

could be a massive challenge.

Managing brand architecture: Given Armani's portfolio of brands within the fashion

segment, as in many of the other markets that it operates in, effectively managing this

portfolio of brands will prove to be the biggest challenge in the future. As the brand

moves into different territories, interacts with different sets of customers, and represents

different personalities, it becomes quite a task for maintaining consistency across all of its

marketing communications and other activities. Though Armani has been using the

corporate brand name in all its sub-brands, and across all its offerings, it is indeed a

double-edged sword. On one hand, this gives Armani a great opportunity to build a very

strong corporate brand but on the other, it gives rise to a huge risk of diluting the brand

equity. Given this strategic dilemma, Armani has to tread carefully in the future. Armani

should also realize that its existence is mainly due to its strength in the fashion apparel

business. As the brand extends through different landscapes, Armani should not lose

focus as new pressures on resources build up.

Maintaining financial independence: Armani is a rarity from a financial perspective as

well. Giorgio Armani has been the only shareholder of the company from its inception till

now. Armani has not taken any bank loans either. It has been one of those rare companies

which has managed to have very healthy operating profits and ploughed back almost 700

million Euros into the business since 1999. Having this financial independence has

helped Armani immensely as the company tests newer territories. With no pressures from

shareholders and without having to bother about meeting quarterly targets, Armani has

been able to operate quite successfully. As is commonly known in the fashion industry, it

takes a considerable time for the concept and products to take root in the market. For any

company to sustain this gestation period, it needs to operate in an environment where

there are no day-to-day financial pressures. Having this kind of financial independence to

operate in has been one of the key success factors for Armani.




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But to continue as a one man company in the future could be quite difficult. With

consolidation happening in many industries, it might just be a matter of time that it

catches up with the fashion industry as well. When such a thing happens, it could pose a

big challenge to the working style of Armani and its continued success. In this light,

Armani might want to think of other options when it has a choice and before something is

thrust upon it.

Sustaining consistent brand personality: One of the main aspects of a fashion brand is

its personality and its identity in the marketplace. Building and sustaining a personality

that is relevant and one that resonates with the customer base is one of the most difficult

aspects of building a strong brand. Armani, with its presence in diverse markets, a very

wide brand portfolio, and interacting with diverse set of customers, faces this huge

challenge of building a relevant and resonant personality. With the ever growing

competition in the fashion industry and ever growing brand portfolio, building and

nurturing this personality will prove to be a very big challenge for Armani in the future.


Armani Marketing

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