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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.
Born in the northern Italian town of Piacenza in 1934, Armani later attended
medical school at Piacenza University for two years before leaving for military
service. While on leave from the military, Armani got a job as a window dresser at
Milan department store La Rinoscente, where he worked up to a buyer position,
marking his first foray into fashion. In 1965, Armani started working as a designer
at fashion house Nino Cerruti, where he met Sergio Galeotti. In 1975, Giorgio
Armani started the company with Galeotti.
Being a designer himself, Armani made apparel with his sense of aesthetics, beauty
and luxury, a sense that appealed to the elite of the society. It is 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. The brand is built on 3 pillars: class,
quality and exclusivity. Its product lines cover all corners of fashion, including
apparel, swimwear, accessories, perfume, cosmetics, watches, eye wear, bags and
shoes for men, women and kids.
Giorgio Armani is 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. Between 2015 and 2018, Chinese
luxury brand consumers’ local spending contributed twice as much growth in
absolute value as their spending abroad. According to a 2018 study by global
management consultancy Bain, 33% of the USD 1.4 trillion global luxury marketis contributed by consumers in China. Giorgio Armani opened its Emporio Armani
store next to Shanghai’s historic “The Bund” in 2004 and has been opening stores
across China since then.
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 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.
The Giorgio Armani Fashion 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
three 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 very high
quality classic apparel that consists of the signature Armani suits, Oscar gowns andso on, which are of the ultra-premium price points and essentially targeting
consumers in the 35 to 50 year old age group.
Emporio Armani: Targeted especially at the young professional segment in the 25
to 35 year old age group, the Emporio Armani brand provides fashionable and
contemporary designs that are relevant to the target customers.
EA7: The EA7 line was inspired by Ukrainian footballer Andriy Shevchenko, who
at the time played for A.C. Milan and wore the number 7 jersey. It was created for
everyone who loves exceptional style and wants to maximize their experience from
sporting activity. This fashion label caters to a wide range of sport including
running, fitness, golf and winter sports.
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. A/X Armani Exchange offers casual fashion of a good quality –
which is exactly what the mass market of consumers desire.
In 2019, the Armani Group completed its 3-year streamlining transformation and
has discontinued the following lines:
Giorgio Armani Prive: This is Armani’s couture line developed in 2005 for the
red carpet. It offers gala and award-show wear including gowns and suits that are
ultra-luxurious, exemplifying the understated chic that epitomizes the essence of
the Giorgio Armani brand. This line is almost exclusively targeted at the rich and
famous.
Armani Collezioni: This is Armani’s venture into a slightly lower priced market
segment. This basically caters to the segment of people who aspire to wear high
quality 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.
Armani Jeans: This is the lowest range of Armani apparel. This Armani brand 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.Armani Junior: This kids fashion brand was designed specifically forinfants and children. The brand is best known for its sophisticated simplicity, sleek
tailoring and classic colours. Taking inspiration from the adult line, sumptuous
materials and attention to detail are combined to create a collection which is
synonymous with quality.
Armani Junior: This kids fashion brand was designed specifically for infants and
children. The brand is best known for its sophisticated simplicity, sleek tailoring
and classic colours. Taking inspiration from the adult line, sumptuous materials
and attention to detail are combined to create a collection which is synonymous
with quality.
The corporate brand and 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, jewellery, eye wear, underwear and loungewear.
But Armani has not stopped at fashion as a product category. Armani has extended
the brand into multiple other categories, such as:
Armani Casa (home collection): This brand shows how Giorgio Armani presents
his ideal for living, his dream of the perfect environment: an intimate and
comfortable space in which to relax, unwind and entertain. It offers up-market
furniture, home accessories, textiles and decorative objects, as well as interior
design services for a variety of spaces including yachts, planes and villas. In 2017,
the Giorgio Armani parent brand completed a luxury home project, Smart Hero-
Central Park Plaza Residences in Beijing, China, in partnership with Smart Hero
Group. The project consists of homes, a 5A office building, a shopping street,
underground malls and supporting facilities. The design and building of facilities
was managed by Armani Casa.Armani Beauty (fragrances and cosmetics): This beauty line reflects the
signature Armani sophistication in its makeup, skincare and fragrances. It teams up
with international makeup artists, like Linda Cantello, to communicate its expert
knowledge in the art of beauty. Armani Beauty has also launched its latest haute
couture fragrance line, Armani Privé, which focuses on showcasing the natural
beauty of a single precious ingredient. One of the precious ingredients used in its
fragrances is the Damask Rose, which requires precise extraction methods.
Armani-branded Dolci (confectionery): This is Armani’s confectionery line
focused on the concept of sophistication in gifting. It offers pralines, chocolates,
jams, honey, tea, bakery products and more with its signature ‘A’ logo. The range
of products is exclusive and distinguishes itself not just by its high quality but also
the rich and sophisticated image of its refined packaging.
Armani-branded Fiori (flowers): Armani/Fiori was created in 2000 and brings
the refined taste and sophistication of the Armani style to the world of flowers and
floral décor. The boutiques offer arrangements and decorative elements with clean
lines in sophisticated colours. It also offers complete and personalized services and
events – clients are attended to and carefully guided through the selection of their
ideal floral arrangements or décor.
Armani Ristorante and Caffes (restaurants and cafes): This is a bold move by
Armani to enter the food business, but it has been proven a success thus far. It has
opened a total of 16 restaurants/ caffes globally, with 1 in America, 7 in Asia and 8
in Europe. Its restaurants are located in prime cities, are impeccably designed and
offer only the best cuisine that allows diners to dine in style, reflecting the brand
philosophy.
Armani Hotels (hotels): Armani expanded into the hospitality industry by striking
a deal with Dubai-based property group Emaar in 2005 to come up with a chain of
Armani branded hotels and resorts. It unveiled its Armani Residences, a luxury
collection of 144 private residence homes in Burj Dubai, the tallest building in the
world in 2007 and its Armani Hotel Dubai in the same building in 2010. In 2011, it
launched Armani Hotel Milano in the Manzoni 31 building, right at the heart of the
prestigious Quadrilatero della Moda. In 2016, the Armani Hotel Dubai was named
the most luxurious hotel in the world by the World Luxury Hotel Awards for its
award-winning facilities as well as its warm, Italian-style service.Armani Clubs (premier nightclubs): Armani has also opened premier nightclubs
in Milano and Dubai, distinguished by their discreet character, impeccable design
and refined elegance.
Armani Silos (museum): To add to this wide portfolio of brands, Armani opened
Armani Silos in April 2015 in Milan to mark 40 years of his career. The museum is
designed with the Armani design philosophy and creative dynamism in mind by
preserving the building’s unusual beehive form and incorporating geometric and
uniform elements. The museum showcases the designer’s 40-year career, including
400 outfits and 200 accessories from Armani’s ready-to-wear collection from 1980
to the present.
All of these other product lines embody, in all its facets, Giorgio Armani’s
personal aesthetic philosophy, which is based on the signature qualities of elegance,
sophistication and comfort.
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. Giorgio Armani is truly a success story of classic brand management –
appealing to people through its entire brand experience and philosophy, rather than
only through its products.
Sustainability within the Armani philosophy
Sustainability is a value that resonates strongly with Armani. With its clean lines
and understated elegance, Armani’s designs have always been built with enduring
substance to last through fashion trends, as opposed to be thrown away after one
season. Armani has stated that it is his wish for the fashion industry to slow down
collections and produce less but of better quality. The Armani Group’s
commitment to sustainability is expressed across 5 areas:
Customers: To ensure the best customer experience, Armani Group guarantees
product safety and authenticity through its QR code project, allowing customers to
access the Group’s product authentication process.
Supply Chain: Besides including sustainability criteria in its supplier selection
process, the Armani Group also monitors its journey toward its ‘Zero Discharge
2020’ goal of reducing environmentally-unfriendly chemicals through centralized
management of chemical tests and restricting these substances from its supply
chain.Environment: The Armani Group has signed the Fashion Pact, a series of pledges
aiming to make the industry greener by eliminating greenhouse gas emissions,
restoring biodiversity and protecting species, and protecting oceans. It also chooses
raw materials and packaging materials with the lowest environmental impact and
opts for recyclable materials where possible.
Human resources: Armani respects diversity, protects equal opportunities,
respects its employees’ work-life balance, and encourages employee growth
through the Armani Development Programme, its corporate training plan.
Community: Through its investments and efforts in providing clean water access
and promoting culture, Armani gives back to the community in which it operates.
For example, it has partnered L’Oreal in executing the Acqua for Life project to
provide clean water access and education to over 195,000 people in 3 continents
thus far.
During the coronavirus pandemic, Armani also converted its factories in Italy into
production centers to make single-use medical protective overalls for healthcare
workers amid supply shortages. Additionally, it donated USD 2.2 million to Italian
hospitals to help combat the virus.
Giorgio Armani’s future brand 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 founder Giorgio Armani himself has a net worth of USD 8.6 billion as at
November 2020 and has held the reins as CEO for the past 45 years since the
inception of the family business. In 2016, Armani created a foundation in his name
to safeguard his company’s future. Armani has hinted at his future successors
being his nieces 50-year-old Roberta Armani (who worked in PR), 64-year-old
Silvana (who worked in Design) and his nephew, 49-year-old Andrea Camerana
(who worked in Commercial previously and is currently a board member), and his
long-time assistant Pantaleo Dell’Orco (who heads the men’s lines and sits on thefoundation’s board). However, Armani has also announced that his heir may not
necessarily come from within the family, so the heir to Armani remains a mystery
for now.
The key to success would be for the Group to implement a transparent process
where family talent is compared with external talent in order to select the next best
leader to take the brand to new heights. Leadership needs to put in place a solid
succession plan to ensure business continuity of the brand and company.
Brand dilution due to over-stretch: Strong brands, as are 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.
The 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. Armani will need to consider
this strategically especially if it is planning to expand into other businesses. All
categories should ultimately encapsulate the spirit of the Armani brand and serve
to strengthen it.
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.
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. The company has not taken any bank loans either.
Having this financial independence has helped Armani immensely as the company
tests newer territories. With no pressures from shareholders and without having tobother about meeting quarterly targets, Armani has been able to operate quite
successfully.
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 this happens, it could pose a big
challenge to the working style of Armani and its continued success.
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
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