Armani: What’s Next for the Sleeping Beauty Mega-Brand?

Welcome to High Margin: Perspectives on creativity and business in the world of luxury — from fashion and watches to art, wellness, travel and more — from BoF’s chief luxury correspondent-at-large.

Today’s edition of The Business of Fashion was a special issue dedicated to Giorgio Armani — our favourite biographer Eric Wilson, critics Tim Blanks and Angelo Flaccavento and our new Milan correspondent Eric Sylvers all included thoughtful reflections on this legendary aesthete and entrepreneur, who was a pioneering author of a global industry that keeps the lights turned on for far more people than anyone could have imagined when he started the brand 50 years ago. With his all-encompassing, adaptable aesthetic, Armani pushed the limits of what a fashion brand could be: extending his vision to eyewear, home decor, hotels, apartments and more.

Since I started going to fashion shows I’ve been awed by the uncanny lightness of the Armani aesthetic: the aura of suspended elegance that surrounds the models as they shuffle down the runway in his stripped down Milan show spaces. The weight of history built up during decades of iteration, the pressures of operating a multi-billion-dollar business within the confines of an ultra-exacting, centralised vision — that stuff just floats away. And then there’s the richness of his palette, the depth Armani could create with greys, beiges and blues using play of the light on lustrous velvet or crisp silk blends.

Still, I’m aware that as tributes like these pour out from across the industry, a lot of people may be wondering what fashion people are going on about. Today, and probably for decades, you’re as likely to encounter the Armani name via an EA7 logo tee, a satchel in line at the airport or a perfume ad as you are through a runway image or by trying on one of his iconic deconstructed blazers. The brand has worked hard to refocus its message on its main luxury collection, Giorgio, and to update and elevate the image of its biggest diffusion business, Emporio. But Armani Exchange, EA7 sneakers and underwear, and other sub-brands and licenses with varying price points and aesthetics continue to cast a shadow over the brand. Thanks to the internet, any product with your name on it can be seen by anyone, anywhere. It’s all a part of the same story. The same customers now shop high and low.

Armani began to realise this in recent years. But cutting business lines always meant cutting jobs and cutting ties with suppliers that had depended on the brand for years. This was anathema to his mindset as a pioneering industrialist.

Armani was also fiercely committed to independence, and I think as fashion evolved it was hard for him and his teams to tell the difference between changing Armani’s vision — which would have defeated the whole purpose of the brand — and making necessary changes to the way they executed that vision in order to keep up with today’s world.

Mr. Armani and I had a dustup over some of these questions back in 2019. I was profiling the company for Bloomberg when it was embarking on a creaky, incomplete restructuring plan that seemed unlikely to restore its crystalline founding vision or reverse years of sales decline.

A few days before we went to print, Mr. Armani came through with a heartfelt, open letter in response to many of my questions about his life and business — surely thinking the piece was going in a much more flattering direction.

He also laid out plans for placing the brand in a strictly governed trust that would effectively allow him to keep controlling his company after his death. It sounded like a surefire way to tank his legacy, making it even harder for his heirs to adapt to a fast-changing world.

In the end, Mr. Armani and his team were really disappointed by the story we published. He had liked my face (then close-shaven and in its 20s) and my big pleated pants. I think my enthusiasm made them forget just how hard-nosed Bloomberg (and I) could be, especially when we tasted blood in the water. But Armani and his team were gracious about it, and never bothered to punish me the way some of his competitors might have.

Since then Armani has hinted he might loosen up those restrictions on his succession: The Covid crisis made him realise how important it was that the company be free to adapt.

PE funds and fashion conglomerates are surely licking their lips thinking about what they could do with the Armani name. In many ways the brand is a “sleeping beauty” despite still doing €2.3 billion ($2.7 billion) in sales: The name is far bigger than that; its archive far more valuable. Plenty of A-list creative directors would kill for a shot at putting their spin on its collections and image.

In addition to Armani’s heirs and employees, licensees like L’Oréal (whose Armani beauty unit crossed €1 billion in revenue back in 2017) and eyewear maker Luxottica have a vested interest in how the brand’s succession shakes out.

The biggest opportunity in Armani’s succession would be to radically cut out parts of the business that don’t serve its brand. His heirs also need to define the values for how they want to operate as a company at every level, including stores, storytelling and production (Its suppliers were recently exposed for labour abuses; Italian prosecutors say the brand turned a blind eye.) Ideally, its corporate values would be as rigorous and uncompromising as Giorgio’s philosophy for design and style, while making room for more innovation and agility.

The company could avoid doing this under the tutelage of private equity or a French supergroup if they foster a deeply rooted, idiosyncratic culture — like France’s independent giants Hermès and Chanel. An IPO, which would put its sales under short-term scrutiny and make radical changes even trickier, shouldn’t even be on the table.

The biggest challenges for achieving this will be governance — only bringing in investors with an ultra-long-term vision — and finding the right talent, as Milan’s default is to operate as a closed system: with many of the same executives and ideas circulating amongst a short list of corporate brands. I hope Armani’s next chapter won’t just be grounded in its rich fashion archive, but in its founders’ iconoclastic, globally minded spirit.