FINAL Armani

8/7/2019 FINAL Armani

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ANNAMALAI UNIVERSITY

BONAFIDE CERTIFICATE

This is to certify that project report on ARMANI is the bonafide work of

Prajakta Sheshrao Kaje who carried out the project work under my

supervision.

SIGNATURE SIGNATURE

Mr. Amit Agrawal Mrs. Pinky Sharma

Director faculty

INIFD Sagar Arcade, INIFD Sagar Arcade,F.C Road Pune F.C Road Pune

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ACKNOWLEDGEMENT

My first experience of project has been successfully, thanks to the supportstaff of many friends & colleagues with gratitude. I wish to acknowledge allof them. However, I wish to make special mention of the following.

First of all we are thankful of our project guide Mrs. Pinky Sharma underwhose guideline we were able to complete our project. I am wholeheartedlythankful to her for giving us her valuable time & attention & for providingus a systematic way for completing our project in time.

I would thank to our Director Mr. Amit Agrawal & staff for providing usassistance in various problem encountered during course of our project.

I am also very thankful to all my class mates who have been very supportiveto present this project.

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INDEX

INTRODUCTION

Introduction of Armani Brand

Giorgio Armani biography

HISTORY AND BACKGROUND

Selected Lines

Selected Awards and Recognitions

VARIOUS STAGES AND STRATERGIES USED

Timeline

CURRENT STAGES

The Brand Philosophy

The Giorgio Armani Brand Architecture

BUSINES VALUES AND POPULARITY

Giorgio Armani's future brand challenges

The founders' dilemma

Brand dilution due to over-stretch

Managing brand architecture

Maintaining financial independence

Sustaining consistent brand personality

CONCLUSION

BIBLIOGRAPHY

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INTRODUCTION

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INTRODUCTION

Giorgio Armani started the company of his namesake back in 1975. Being a designerhimself, 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 royalfamilies of many Asian countries and even the opulent women from the Middle East andthe high and mighty stars from Hollywood among many other prominent customers. Foralmost 30 years now, Armani has been a privately held company with the founderGiorgio Armani being the sole shareholder.

With many sub-brands designed under the parent umbrella brand of Giorgio Armani tocater to the specific needs of different market segments, it has become one of thestrongest fashion and luxury brands in the world. Not only has Giorgio Armani becomeone of the most respected and known brand names in the fashion industry, it is also oneof 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 growthmarkets for luxury brands. For example, China is embracing premium fashion and luxurygoods at an increasing pace, and Giorgio Armani has been one of the forerunners toexploit the market potential. There are approximately around 10-13 million Chineseluxury brand customers. Giorgio Armani opened its Emporio Armani store next toShanghai's historic "The Bund" in 2004.

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GIORGIO ARMANI BIOGRAPHY

Giorgio Armani, 74, is the President and Chief Executive Officer of the Armani Groupand sole share holder of Giorgio Armani S.p.A., one of the worlds leading fashion and

lifestyle design houses, with 5,000 direct employees, 13 factories, and a direct network of500 exclusive retail stores in 46 countries worldwide. Under Mr. Armanis direction,Giorgio Armani S.p.A. today stands as one of the few remaining independent, privately-owned companies in its sector, with a proven business strategy that has capitalised on theworldwide power and potential of the Armani brand name.

Born on July 11, 1934, Giorgio Armani grew up with his sister and brother in thenorthern Italian town of Piacenza. In 1957, following two years of study in medicine atthe University of Piacenza, Giorgio Armani decided to leave in order to pursue hisinterest in fashion, accepting a job as a merchandiser at Milans well-known departmentstore, La Rinascente. Thereafter, Mr. Armani worked as a fashion designer for Nino

Cerruti, and then as a freelance designer for various companies, an experience thatresulted in an exceptionally rich and varied evolution of his style.

After several years of working as a freelance designer, Mr. Armani was ready to devotehis energy to his own label and followed his friend Sergio Galeottis suggestion that theyopen a company together. On July 24, 1975, the two business partners founded GiorgioArmani S.p.A. and launched a mens and womens ready-to-wear line.

Mr. Armanis philosophy of fashion and style, together with his entrepreneurial ability,has been central to the success of Giorgio Armani S.p.A. He oversees both the companysstrategic direction and all aspects of design and creativity. Perhaps best known forrevolutionizing fashion with his unstructured jacket in the Eighties, after thirty years ofrunning his own label, he now presides over a stable of collections, including hissignature Giorgio Armani line, Giorgio Armani Priv, Armani Collezioni, EmporioArmani, AJ | Armani Jeans, A/X Armani Exchange, Armani Teen, Armani Junior,Armani Baby, and Armani Casa home interiors, offering a choice of lifestyles to themarketplace. Today, the companys product range includes womens and mens clothing,shoes and bags, watches, eyewear, jewellery, fragrances and cosmetics, and homefurnishings.

In May 2005 Giorgio Armani S.p.A. signed an agreement with Emaar Properties to createa series of Armani Hotels & Resorts. Under the terms of this agreement Giorgio Armaniundertook responsibility for originating and implementing design concepts that woulddefine the style and mood of a new international chain of hotels, resorts and luxuryresidences scheduled to open in the worlds leading cities and tourist destinations.Elegance and harmony were to be the keynotes of the project, offering guests theopportunity to enjoy a total experience rooted in the Armani lifestyle. The first of theseArmani hotels will open in Dubai during 2009, and will be followed by another in Milanin 2010.

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During his career Mr. Armani has received many local and international awards. Theseinclude the Commendatore dellOrdine al Merito della Repubblica, and GrandUfficialedellOrdine al Merito della Repubblica (Italys highest government awards), and theAward for Best International Designer, Lifetime Achievement Award for mens wear andfor art and fashion from the Council of Fashion Designers of America. He has, in

addition, been recognised with an Honorary Doctorate from Londons Royal College ofArt, and has an Honorary Degree from Milans Accademia di Brera. In 2006 he wasawarded an Honorary Degree from Londons Central Saint Martins College of Art andDesign, and in 2007 he received an Honorary Degree in Industrial Design from thePolitecnico University of Milan.

Mr. Armani has served as Goodwill Ambassador for the United Nations HighCommission for Refugees. In 2003 he was honoured with the inaugural Rodeo DriveWalk of Style Award for his pioneering role in bringing the worlds of fashion andcinema together. In 2006, Giorgio Armani was honoured with other important awards:from the Dino Ferrari award for being the most renowned fashion designer in the world,

to the Elle Award given to Mr. Armani in Valencia, and the Leonardo Award presentedto Mr Armani by the Italian Presidente della Repubblica, Giorgio Napolitano, inrecognition of his status as a major representative of Italian Quality worldwide. In2008, in Paris, the President of the French Republic, Nicholas Sarkozy, conferred theorder of the Lgion dHonneur on the designer.

In 2000, New Yorks Solomon R. Guggenheim Museum celebrated the social andcultural influence of Mr. Armanis career, placing special emphasis on his pioneeringdesign work for the cinema, by staging an exhibition that has since been seen at some ofthe worlds most prestigious museums, including the Guggenheim Bilbao, LondonsRoyal Academy of Arts, Berlins Neue Nationalgalerie, Romes Terme di Diocleziano,Tokyos Mori Arts Museum and Shanghais Shanghai Art Museum. On February 20th,2007, the exhibition reached its eighth venue at the Triennale di Milano in an expandedand enriched version with a striking new display over two floors.

In 2005, Giorgio Armani presented his first collection of haute couture, Giorgio ArmaniPriv, in response to requests from clients who were seeking exclusive clothes of the veryhighest standard, fulfilling all the criteria of fine bespoke tailoring.

In 2006, Giorgio Armani went to the World Economic Forum in Davos to personallyannounce his support for (PRODUCT) RED, the pioneering global initiative founded byBono and Bobby Shriver to fight AIDS in Africa.

In 2007, on the occasion of the 79th Annual Academy Awards, Giorgio Armanipresented an exclusive showing of his new Haute Couture Giorgio Armani PrivSpring/Summer 2007 collection to a specially invited audience in the grounds of RonBurkles Green Acres Estate in Beverly Hills. The following day he attended the Oscars.

At the end of 2007, Mr. Armani travelled to Tokyo for the opening of the Armani/GinzaTower, his fourth concept store after Milans Armani/Manzoni 31, Munichs

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Armani/Theatiner 12, and Hong Kongs Armani/Chater House. The Armani/Ginza Towerfeatures magnificent spaces in which the complete Armani fashion and lifestylephilosophy can be discovered under a single roof.

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HISTORY AND BACKGROUND

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As part of its strategy to maintain control over product quality and distribution, GiorgioArmani S.p.A. initiated a series of share investments, which today include Intai Spa(100%), Antinea Srl (100%) and the manufacturing company Simint Spa (100%), thecomplete acquisition of which was finalized in 2001 through an OPA.

In 1999, a new Accessories Division was created including a first e-commerce presencewith www.armaniexchange.com in the United States.

In 2000, Giorgio Armani's, 25th anniversary year, the company acquired the productionand distribution facilities of the Armani Collezioni and Mani mens lines from GFT. Thecompany also launched its global web site at www.giorgioarmani.com and established ajoint venture with Zegna Group (51% Armani, 49% Zegna) for the production anddistribution of the Armani Collezioni mens line, launched Giorgio Armani Cosmetics,the new Armani Casa home interiors collection and opened its new Armani multi-brandworldwide flagship at Milans Via Manzoni 31.

In 2001, continuing with the Groups strategy to take greater control over all aspects ofits manufacturing, distribution and retail activities and to further focus on the Made inItaly content of its brands, a joint venture company with Vestimenta SpA (one of theArmani Groups licensees since 1979) was formed for the production and distribution ofthe mens and womens Giorgio Armani top line. The company also opened the firstGiorgio Armani Accessori store (Milano) and worldwide commercial offices andshowrooms, including the Armani/Teatro realized in collaboration with architect TadaoAndo.

In 2002, the Group's retail investment programme continued at a fast pace with 16 storerenovations and 30 new store openings in strategically important cities worldwide,including the second Armani multi-brand store covering 3,000 square meters at ChaterHouse in Hong Kong, which also signalled the launch of a strategic retail expansionprogramme for China. On the manufacturing front, two important acquisitions werecompleted: Deanna S.p.A. for the production of high quality knitwear and Guardi, whichcontrolled four specialist shoe makers, to support the further growth of the Group's shoebusiness. Product line expansion continued with the launch of Emporio ArmaniJewellery; the expansion of the Armani Jeans line in Japan and the United States; and, thefurther growth of the Armani Casa brand around the world through the opening of sevennew stand alone stores in Milan, Istanbul, Zurich, Hong Kong, Moscow, Marbella andRiyadh. Safilo S.p.A is awarded with a new licence for the production and distribution ofGiorgio Armani and Emporio Armani Eyewear.

The year 2003 once again saw the Group investing significantly in its retail network with11 renovations and a further 30 new openings, including the third Armani multi-brandstore covering 1,000 square meters at Theatiner 12 in Munich (the first Emporio Armanistore in Germany). In addition, the world-wide roll-out of exclusive Giorgio ArmaniCosmetics counters in select specialty and department stores is accelerated as a result ofthe outstanding sales performance in existing outlets. Giorgio Armani Mens fragrancesare worldwide best seller in 2003.

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In the five years from 1998 to 2003 the Armani Group will have spent upwards of Euro600 million of internally generated funds on strategically important activities, includingthe evolution of its manufacturing base, the expansion and renovation of its retailnetwork, the diversification of its product lines and the enhancement of its headquarters

facilities in Milan.

In the year 2004 the Armani Group awards Wolford AG, a multi-year license for theworldwide production and distribution of a new line of Giorgio Armani hosiery andbodywear.

Giorgio Armani S.p.A. and EMAAR Properties PJSC signed a Letter of Intent for theestablishment of an innovative worldwide collection of Armani luxury hotels andresorts.

Giorgio Armani opens Armani/Three on the Bund in Shanghai, which includes Giorgio

Armani boutique, Emporio Armani, Emporio Armani Caff, Armani Fiori and ArmaniDolci areas.

In 2005, Giorgio Armani S.p.A. announces new important strategic initiatives whichunderline the companys continued approach to expansion: the launch of Armani Privcouture collection reflecting the increasing desire for customization and personalizationat the top end of the market; and at the end of the year, the exclusive world ofArmani/Priv expands its frontiers with the launch of Borgo 21 timepieces; a formalcontractual agreement is signed between Giorgio Armani S.p.A. and EMAAR Hotels &Resorts LLC for the development of an exclusive collection of Armani Hotels andResorts, foreseeing the opening of at least seven luxury hotels and three vacation resortswithin the next ten years. At the end of October, the Armani Group using the TWFAExhibition in Cannes as a platform announces its plans for a fast-track expansion in theDuty Free and Travel Retail marketplace, declaring its future planned openings atLondon Heathrow airport, in Guams prestigious redevelopment of the DFS Galleria andat Japans Narita airport. Meanwhile, another agreement is also established betweenGiorgio Armani S.p.a and Como Holdings, Inc. to create a new joint venture company,called Presidio Holdings Ltd., for the management and expansion of the A/X ArmaniExchange brand throughout the world. Finally, a global beauty websitewww.giorgioarmanibeauty.com is launched, demonstrating the companys commitmentto embrace fashion and beauty within the online sphere.

In 2006, the Armani Group announces his support of the (Product) RED, the pioneeringglobal business initiative launched by Bono and Bobby Shriver for The Global Fund inthe fight against AIDS in Africa. In support of RED, Armani is designing an EmporioArmani (Product) RED capsule collection, including clothing, accessories, eyewear,watches, jewellery and fragrances. Also casual wear is still going strong and becomesmore popular than ever: while Armani Jeans celebrates its first 25th Anniversary, aspecial series of athletic shoes for Spring / Summer 2007 season is created by acollaboration between Giorgio Armani and Mizuno style finally meets technology.

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In 2007 the capital investment reached 100 million Euros. This was mainly used todevelop and strengthen the retail network and was entirely self-funded.

The worlds first Armani Residences opened in the Burj Dubai and the first group of

apartments sold out in a few hours.

In 2007, the Giorgio Armani skincare collection was launched: Crema Nera for womenand Skin Minerals for men.

Also in 2007, Armanis fourth concept store after Milan, Hong Kong and Munich, wasopened in Tokyos Armani/Ginza Tower; the store covers 6,000 square meters andincludes the first Armani/Spa.

During the same year, a strategic marketing agreement was signed between GiorgioArmani and Samsung to develop high-end electronic and consumer products, including

the launch of a Giorgio Armani mobile phone, the Armani/Samsung Television and theEmporio Armani Samsung mobile, Night Effect .

The end of the year saw the launch of Emporio Armanis US e-commerce website, withservices to be extended to Europe in 2008.

In 2008, Giorgio Armani S.p.A. and Como Holdings, Inc. announced the Armani Groupsacquisition of a further 25% of the joint venture company Presidio Holdings Ltd, withboth shareholders now enjoying equal holdings in the company.

The same year, the retail network expanded again, opening the first. Emporio Armaniflagship stores in Moscow and Beijing, also entering the Indian market with a GiorgioArmani boutique and an Emporio Armani store in New Delhi.

2008 closed with the announcement of work starting on construction of the Armani/Hotelin Milan, to open in 2010.

Armani/5th Avenue in New York will be the fifth Armani concept store and inauguratedin February 2009.

Selected Lines

Armani Alta Moda (haute couture)

Borgonuovo 21

Giorgio Armani

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Le Collezioni (diffusion), since 1979

Mani (diffusion)

Emporio Armani (diffusion, younger customer, worldwide), since 1984

A/X Armani Exchange (basics, United States only)

Giorgio Armani U.S.A. (lower priced)

Armani Jeans

Armani Neve (winter sportswear), since 1996

Armani Golf (sportswear), since 1996

Classico, since 1996

Selected Awards and Recognitions

Neiman-Marcus Award (1979)

CFDA International Award (1983)

The semi-annual Italian men's fashion trade show Pitti Uomo in Florencecelebrated in Summer 1996 its 50th fair with a magnificent fashion show called"G.A.Story" portaying the life and work of Giorgio Armani. The show conceptwas developed by well-known opera-director Robert Wilson.

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VARIOUS STAGES AND STRATERGIES

USED

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VARIOUS STAGES AND STRATERGIES USED

Timeline

1957-64: Giorgio Armani works as a buyer for La Rinascente department stores.

1964-70: Giorgio Armani works as a designer for Hitman, Nino Cerruti's men's wear line.

1970: Giorgio Armani works as freelance fashion designer.

1975: Giorgio Armani and Sergio Galeotti found Giorgio Armani S.p.A. on July 24th.

1978: Establishes License agreement with GFT (Gruppo Finanziario Tessile).

1979: Establishes Giorgio Armani Corporation USA.

1980: Signs License agreement with L'Oreal (formerly H.Rubinstein).

1981: Opens the first Emporio Armani store (Milano).

1982: Giorgio Armani becomes the first fashion designer after Christian Dior to appearon the cover of 'Time' magazine.

1982: Opens first Giorgio Armani boutique (Milano).

1986: Opens first Armani Junior store (Milano).

1987: Establishes a Joint Venture in Japan.

1988: Signs Licence agreement with Luxottica Group S.p.A.

1989: Opens first Emporio Armani Express restaurant (London).

1989: Giorgio Armani declines offer by maison JEANNE LANVIN.

1989: Initial acquisition of Simint S.p.A.

1990: Acquires share control in Antinea S.r.l.

1990: Initial acquisition of Intai S.p.A.

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1991: Opens first A/X Armani Exchange store (Soho-New York).

1996: Acquires share control in Simint S.p.A.

1997: Opens first Giorgio Armani Collezioni stores (Milano, London, and Tokyo).

1997: Opens first Armani Jeans store (Roma).

1998: Acquires of share control in Intai S.p.A.

1999: Creates new Accessories Division.

1999: Starts e-commerce with armaniexchange.com in the United States.

2000: Acquires manufacturing facilities of Armani Collezioni men's line and control ofsales and distribution of the Armani Collezioni and Mani labels in the United States.

2000: Launches Giorgio Armani global web site, including giorgioarmani.com,armanicollezioni.com, emporioarmani.com, armanijeans.com, armaniexchange.com,armaniparfums.com, armanipress.com.

2000: Establishes a Joint Venture with the Zegna Group (51% Armani, 49% Zegna) forthe production and distribution of the 'Armani Collezioni' men's line.

2000: Opens first Armani Casa store (Milano).

2000: Opens Armani /Via Manzoni 31, including Emporio Armani, Armani Jeans,Armani Casa, Sony Gallery, Parfums, Emporio Armani Caff, Nobu, Arte, Fiori, Libri.

2001: Establishes a joint venture company with Vestimenta S.p.A. for the production anddistribution of the men's and women's Giorgio Armani lines.

2001: Opens first Giorgio Armani Accessori store (Milano).

2001: Presents the new ARMANI/TEATRO in Milan designed by Architect TADAOANDO.

2001: Successfully completed acquisition of apparel manufacturer SIMINT,manufacturing company.

2002: Starts e-commerce with Emporio Armani watches with giorgioarmani.com in theUnited States.

2002: Completes acquisition of highly-respected Reggio Emilia-based knitwearmanufacturer, Deanna S.p.A.2002: Acquires share control of "Guardi S.p.A.", a factoryspecialised in the production of both women's and men's shoes.

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2002: Opens Armani/Chater House, Hong Kong, including Emporio Armani, AJ|ArmaniJeans, Emporio Armani Caff, Armani Libri, Armani Fiori and Giorgio ArmaniCosmetics areas.

2003: The Armani Group awards Safilo S.p.A. a multi-year license for the worldwideproduction and distribution of its Giorgio Armani and Emporio Armani eyewearcollections.

2003: Opens Armani/Priv (Milan), an exclusive lounge bar created withinArmani/Manzoni 31 store.

2003: Opens Armani/Funf Hofe in Munich, the third multibrand store including EmporioArmani, AJ|Armani Jeans, Emporio Armani Caff, Armani Fiori Libri, Armani Dolci andGiorgio Armani Cosmetics areas.

2004: The Armani Group awards Wolford AG, a multi-year license for the worldwideproduction and distribution of a new line of Giorgio Armani hosiery and bodywear.

2004: Giorgio Armani S.p.A. and EMAAR Properties PJSC signed a Letter of Intent forthe establishment of an innovative worldwide collection of 'Armani luxury hotels andresorts'.

2004: Opens Armani/Three on the Bund in Shanghai, the fourth multibrand storeincluding Giorgio Armani boutique, Emporio Armani, Emporio Armani Caff, ArmaniFiori and Armani Dolci areas.

2004 A formal contractual agreement is signed between Giorgio Armani S.p.A andEMAAR Hotels & Resorts LLC., foreseeing the opening of at least seven luxury hotelsand three vacation resorts within the next ten years.

2005 Giorgio Armani Japan signs lease for Ginza building which will be the new Tokyoflagship store and corporate headquarters.

2005 Opens a new Armani Casa store in Via Manzoni 37 in Milan.

2005 An agreement is established between Giorgio Armani S.p.A. and Como Holdings,Inc. to create a new joint venture company for the management and expansion of the A/XArmani Exchange brand throughout the world.

2005 Armani Group, using the TWFA Exhibition in Cannes as a platform, announces itsplans for a fast-track expansion in the Duty Free and Travel Retail marketplace.

2005 Launches Global Beauty website at www.giorgioarmanibeauty.com

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2005 Giorgio Armani announces his support of the Product RED, the pioneering globalbusiness initiative launched by Bono and Bobby Shriver for The Global Fund in the fightagainst AIDS in Africa.

2006 The Armani Group signs a licensing agreement with Mirella S.r.l Industria

Calzature, for the production and distribution of childrens footwear.

2006 Opens his first flagship Armani / Casa store in London.

2006 Giorgio Armani announces a new collaboration with Mizuno to create a specialseries of athletic shoes.

2007 Opens his new signature collection boutique at 18, Avenue Montaigne, Paris.

2007 The Armani Group and Como Holdings announce the Japan launch for A/X ArmaniExchange

2007 Opens new Emporio Armani store in Charles de Gaulle Airport, France, in ongoingprogramme of expansion in travel retail and duty free market

2007 Opens the first Armani/Casa store in Singapore

2007 Giorgio Armani launches his online Emporio Armani store in USA atwww.emporioarmani.com

2007 Giorgio Armani and Samsung announce new strategic alliance for the creation ofinnovative products

2007 Armani Residences are unveiled in Burj Dubai

2007 Armani Hotels and Resorts launches official website at www.armanihotels.com

2007 Opens Armani/Ginza Tower, the fourth multibrand store including Giorgio Armaniboutique, Emporio Armani, Armani/Casa, Armani/ Ristorante and the first Armani/SPA

2007 Giorgio Armani launches Armani / Ginza tower official website atwww.armaniginzatower.com

2008 Giorgio Armani launches the new Armani/Casa website at www.armanicasa.com

2008 Giorgio Armani launches European online store at www.emporioarmani.com

2008 Opens Emporio Armani flagship store in Beijing

2008 Opens first Giorgio Armani boutique and first Emporio Armani store in New Delhi,India

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2008 Giorgio Armani in partnership with Emaar Properties PJSC S.p.A announces theArmani Residences in Marassi.

2008 Opens first Emporio Armani flagship store in Moscow

2008 Opens his largest boutique in Milans Via Montenpoleone

2008 The Armani Group and the Molteni Group announce the formation of a jointpartnership for the future production and distribution of kitchen systems under the brandname Armani/Dada.

2008 Giorgio Armani S.p.A. and Como Holdings, Inc. announce the acquisition of anadditional 25% of the joint venture company, Presidio Holdings Ltd. by the Armanigroup.

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CURRENT STAGES

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CURRENT STAGES

The Brand 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 quiteunique 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 thepersonality of the founders. As design is the most important ingredient of fashion andluxury apparel, the individual style of these designers becomes crucial to creating andsustaining the fashion brand strategy. It is these unique designs and patterns that reflectthe personality of their creator that gives an identity to the brand and helps to differentiateit from the crowd.

The Giorgio Armani fashion house, like many other fashion houses, has been builtprimarily 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 ofdifferentiation that can be conveyed in a tangible and visual form, it also poses a seriousthreat. 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 thedemise of the founder, something many of the fashion houses have realized in the recentpast.

The Giorgio Armani Brand Architecture

Whenever a brand gains popularity and acceptance from its target customers in its corebusiness, the next obvious step for the brand is to charter a new course by venturing intodifferent product lines, different segments, and ever different markets. This phenomenonseems common across industry sectors.

Giorgio Armani with its iconic popularity amongst the elite of the society and the fashionliterate segment of the market has followed similar steps by extending the brand. Todaythe 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-premiumprice 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. Thisbasically caters to the segment of people who aspire to wear Armani apparel but cannotafford the ultimate signature line, or to those who crave to add extra products to theirexisting portfolios. The Armani Collezioni brand, with a price point of almost 20% lowerthan the main line, provides an excellent line of affordable fashion.

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Emporio Armani: Targeted especially at the young professional segment in the 25-35year old age group, the Emporio Armani brand provides contemporary designs that arerelevant to the target customers.

Armani Jeans: This is the lowest range of Armani apparel. This is to the value segmentwhat the signature line is to the premium segment. Catering necessarily to the youngadults in the 18 to 30 year old age group, the Armani Jeans collection provides a trendyyet fashionable and luxurious line of apparel.

A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armanifashion house. This serves as the ultimate testimony to the power of the brand. Byproviding the entire range of its apparels and accessories, Armani Exchange providescustomers 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 oftenquite insignificant. Furthermore, in January 2005 the Armani group launched ArmaniPrive to stands for its haute couture collection. Giorgio Armani and Armani Prive cancross borders creating confusion in the mind of the buyer.

These sub-brands help Giorgio Armani to operate in many segments of the fashionapparel market. But this is not all. Not only does Armani straddle many segments of thesame product category, but also many different product categories.

Leveraging its strong brand equity in the fashion apparel market, Giorgio Armani hasventured into other related categories like eye wear, watches and cosmetics. These aremade available in each of the above-mentioned brand categories to ensure that it isavailable 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 isnatural for fashion houses to extend their brands into these categories. Giorgio Armani isa very strong example for this argument. By leveraging its expert knowledge of thefashion and luxury industry, Armani has been able to come up with winning concepts inthe other product lines of cosmetics, watches, jewelry and eye wear.

But Armani has not stopped at just these product categories: Armani has extended thebrand into multiple other categories such as Armani Casa (up-market furniture), Armani-branded Dolci (confectionary), and Armani-branded Fiori (Flowers). And to add to thiswide portfolio of brands, Armani very recently struck a deal with a Dubai-based propertygroup 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 toleverage its brand equity to be present in most of these lucrative sectors.

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Today, Armani group has a retail network of 60 Giorgio Armani boutiques, 11Collezioni, 122 Emporio Armani, 94 A/X Armani exchange, 13 Armani Junior , 1Giorgio 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 ofchallenges to the Giorgio Armani brand strategy in the future.

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Giorgio Armani's future brand challenges

The founders' dilemma: This phenomenon is classic and occurs for any company that isbuilt 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 thecompany would think of life after the founder. Moreover, whenever the companies'success and survival depends very heavily on the existence of a single person, suchcompanies and its leaders should take proper action from an early stage so that properleaders 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 companyseems 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 asuccessor 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 standup and live after the demise of their founders, those are the rarities. Armani shouldformulate a structure in his company along with his key management people to put inplace a definite structure that identifies and nurtures future and upcoming leaders whocan carry on the business even after the demise of any single individual. This aspect gainsa bit more importance in the fashion industry as the personality, concept and ideas ofindividual designers prove to be real competitive advantages. Keeping this in mind,Giorgio Armani should tackle this challenge when there is still a considerable amount ofleeway 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 reasonsthat businesses invest in branding and brand management is for the same reasons. Strongbrands, as is well known, provide companies with a very powerful tool to enter newermarkets with limited investments by leveraging their strong brand equity. It givescompanies numerous revenue streams. Given this simple but strong fact, it is not asurprise that most of the strong brands in the world have leveraged their brand equity andextended their brands into newer product categories, newer markets and even newermarket 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. Theexamples 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 theyused their brand names on a very wide range of products. One of the main factors thatmake fashion houses and their products premium are their exclusivity. By franchisingtheir brand names to literally everything, these brands lost a significant portion of theirstrong brand equity.

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Though Armani might have extended its brand to hotels because luxury travel is catchingup fast as a fad with elite travelers, managing the brand along these different dimensionscould 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 thisportfolio of brands will prove to be the biggest challenge in the future. As the brandmoves into different territories, interacts with different sets of customers, and representsdifferent personalities, it becomes quite a task for maintaining consistency across all of itsmarketing communications and other activities. Though Armani has been using thecorporate brand name in all its sub-brands, and across all its offerings, it is indeed adouble-edged sword. On one hand, this gives Armani a great opportunity to build a verystrong corporate brand but on the other, it gives rise to a huge risk of diluting the brandequity. Given this strategic dilemma, Armani has to tread carefully in the future. Armanishould also realize that its existence is mainly due to its strength in the fashion apparelbusiness. 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 aswell. Giorgio Armani has been the only shareholder of the company from its inception tillnow. Armani has not taken any bank loans either. It has been one of those rare companieswhich has managed to have very healthy operating profits and ploughed back almost 700million Euros into the business since 1999. Having this financial independence hashelped Armani immensely as the company tests newer territories. With no pressures fromshareholders and without having to bother about meeting quarterly targets, Armani hasbeen able to operate quite successfully. As is commonly known in the fashion industry, ittakes a considerable time for the concept and products to take root in the market. For anycompany to sustain this gestation period, it needs to operate in an environment wherethere are no day-to-day financial pressures. Having this kind of financial independence tooperate in has been one of the key success factors for Armani.But to continue as a one man company in the future could be quite difficult. Withconsolidation happening in many industries, it might just be a matter of time that itcatches up with the fashion industry as well. When such a thing happens, it could pose abig 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 isthrust upon it.

Sustaining consistent brand personality: One of the main aspects of a fashion brand isits personality and its identity in the marketplace. Building and sustaining a personalitythat is relevant and one that resonates with the customer base is one of the most difficultaspects of building a strong brand. Armani, with its presence in diverse markets, a verywide brand portfolio, and interacting with diverse set of customers, faces this hugechallenge of building a relevant and resonant personality. With the ever growingcompetition in the fashion industry and ever growing brand portfolio, building andnurturing this personality will prove to be a very big challenge for Armani in the future.

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CONCLUSION

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CONCLUSION

When Giorgio Armani's business partner died in 1985, leaving their Italian fashion housewithout a commercial manager, the future seemed bleak. Mr. Armani, who for thecompany's first 10 years had concentrated on design, stepped into the void.

Since then, the 71-year old Piacenza native has become a rarity in the fashion industry: adesigner who also controls the business side of his empire. Other designers have tried tofollow in Mr. Armani's footsteps, but no one yet has embodied the two facets of theluxury-goods industry as successfully.

If Mr. Armani's design acumen was visible early on -- ripping the traditional stiff liningout of jackets to create a casual suit -- he has had to prove himself as a chief executive.To expand his business, Mr. Armani has created less-exclusive spin-offs of his luxuryGiorgio Armani label, introducing lines such as Armani Jeans for casual clothes andArmani Exchange for trendy urban wear. He has expanded the Armani brand into a rangeof product categories such as accessories, home furnishings, restaurants, car interiors,

chocolates and, most recently, hotels. Giorgio Armani SpA has become one of theworld's biggest fashion groups, with 126 million euros, or about $152 million, in profitson 1.3 billion euros in sales in 2004. The company reports 2005 results Wednesday.Though his clothes are now considered by fashion critics to be more conservative thanavant-garde, as a businessman Mr. Armani has been willing to take risks. He was one ofthe first designers to make an event of dressing Hollywood stars, paving the way forcelebrity marketing. When, during the late 1990s, luxury-goods companies like LVMHMoet Hennessy Louis Vuitton and Gucci Group frantically bought up small fashionhouses to become multibrand conglomerates, Mr. Armani stayed solo. He snubbed anacquisition overture by LVMH chief Bernard Arnault.

The perennially tanned, white-haired designer owns 100 percent of his company, has nodirect heirs, and hasn't groomed any one manager to succeed him. Dressed in a charcoal-gray cashmere-and-polyester jacket, he sat down in his Milan home to discuss the Armaniuniverse and how it will survive without him.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

www.giorgioarmani.com

www.venturerepublic.com

www.fragrancex.com

www.infomat.com
http://www.giorgioarmani.com/http://www.venturerepublic.com/http://www.fragrancex.com/http://www.infomat.com/http://www.giorgioarmani.com/http://www.venturerepublic.com/http://www.fragrancex.com/http://www.infomat.com/

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