ARMANI

A PROJECT REPORT

Submitted by

Prajakta S Kaje

in partial fulfillment for the award of the degree

of

BACHELOR OF SCIENCE

in

FASHION DESIGNING

INTERNATIONAL INSTITUTE OF FASHION DESIGNING,

PUNE

ANNAMALAI UNIVERSITY

MAY 2010

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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 support

staff of many friends & colleagues with gratitude. I wish to acknowledge all
of them. However, I wish to make special mention of the following.

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

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

I am also very thankful to all my class mates who have been very supportive
to 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 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.

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GIORGIO ARMANI BIOGRAPHY

Giorgio Armani, 74, is the President and Chief Executive Officer of the Armani Group
and sole share holder of Giorgio Armani S.p.A., one of the world’s leading fashion and
lifestyle design houses, with 5,000 direct employees, 13 factories, and a direct network of
500 exclusive retail stores in 46 countries worldwide. Under Mr. Armani’s 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 the
worldwide power and potential of the Armani brand name.

Born on July 11, 1934, Giorgio Armani grew up with his sister and brother in the
northern Italian town of Piacenza. In 1957, following two years of study in medicine at
the University of Piacenza, Giorgio Armani decided to leave in order to pursue his
interest in fashion, accepting a job as a merchandiser at Milan’s well-known department
store, La Rinascente. Thereafter, Mr. Armani worked as a fashion designer for Nino
Cerruti, and then as a freelance designer for various companies, an experience that
resulted in an exceptionally rich and varied evolution of his style.

After several years of working as a freelance designer, Mr. Armani was ready to devote
his energy to his own label and followed his friend Sergio Galeotti’s suggestion that they
open a company together. On July 24, 1975, the two business partners founded Giorgio
Armani S.p.A. and launched a men’s and women’s ready-to-wear line.

Mr. Armani’s 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 company’s
strategic direction and all aspects of design and creativity. Perhaps best known for
revolutionizing fashion with his unstructured jacket in the Eighties, after thirty years of
running his own label, he now presides over a stable of collections, including his
signature Giorgio Armani line, Giorgio Armani Privé, Armani Collezioni, Emporio
Armani, AJ | Armani Jeans, A/X Armani Exchange, Armani Teen, Armani Junior,
Armani Baby, and Armani Casa home interiors, offering a choice of lifestyles to the
marketplace. Today, the company’s product range includes women’s and men’s clothing,
shoes and bags, watches, eyewear, jewellery, fragrances and cosmetics, and home
furnishings.

In May 2005 Giorgio Armani S.p.A. signed an agreement with Emaar Properties to create
a series of Armani Hotels & Resorts. Under the terms of this agreement Giorgio Armani
undertook responsibility for originating and implementing design concepts that would
define the style and mood of a new international chain of hotels, resorts and luxury
residences scheduled to open in the world’s leading cities and tourist destinations.
Elegance and harmony were to be the keynotes of the project, offering guests the
opportunity to enjoy a total experience rooted in the Armani lifestyle. The first of these
Armani hotels will open in Dubai during 2009, and will be followed by another in Milan
in 2010.

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During his career Mr. Armani has received many local and international awards. These
include the Commendatore dell’Ordine al Merito della Repubblica, and Grand’Ufficiale
dell’Ordine al Merito della Repubblica (Italy’s highest government awards), and the
Award for Best International Designer, Lifetime Achievement Award for men’s wear and
for art and fashion from the Council of Fashion Designers of America. He has, in
addition, been recognised with an Honorary Doctorate from London’s Royal College of
Art, and has an Honorary Degree from Milan’s Accademia di Brera. In 2006 he was
awarded an Honorary Degree from London’s Central Saint Martins College of Art and
Design, and in 2007 he received an Honorary Degree in Industrial Design from the
Politecnico University of Milan.

Mr. Armani has served as Goodwill Ambassador for the United Nations High
Commission for Refugees. In 2003 he was honoured with the inaugural Rodeo Drive
“Walk of Style” Award for his pioneering role in bringing the worlds of fashion and
cinema 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” presented
to Mr Armani by the Italian Presidente della Repubblica, Giorgio Napolitano, in
recognition of his status as a major representative of “Italian Quality” worldwide. In
2008, in Paris, the President of the French Republic, Nicholas Sarkozy, conferred the
order of the Légion d’Honneur on the designer.

In 2000, New York’s Solomon R. Guggenheim Museum celebrated the social and
cultural influence of Mr. Armani’s career, placing special emphasis on his pioneering
design work for the cinema, by staging an exhibition that has since been seen at some of
the world’s most prestigious museums, including the Guggenheim Bilbao, London’s
Royal Academy of Arts, Berlin’s Neue Nationalgalerie, Rome’s Terme di Diocleziano,
Tokyo’s Mori Arts Museum and Shanghai’s Shanghai Art Museum. On February 20th,
2007, the exhibition reached its eighth venue at the Triennale di Milano in an expanded
and enriched version with a striking new display over two floors.

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

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

In 2007, on the occasion of the 79th Annual Academy Awards, Giorgio Armani
presented an exclusive showing of his new Haute Couture Giorgio Armani Privé
Spring/Summer 2007 collection to a specially invited audience in the grounds of Ron
Burkle’s 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/Ginza
Tower, his fourth concept store after Milan’s Armani/Manzoni 31, Munich’s

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Armani/Theatiner 12, and Hong Kong’s Armani/Chater House. The Armani/Ginza Tower
features magnificent spaces in which the complete Armani fashion and lifestyle
philosophy can be discovered under a single roof.

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HISTORY AND BACKGROUND

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HISTORY AND BACKGROUND

The Giorgio Armani Group is one of the leading fashion and luxury goods groups in the
world today with over 5,000 direct employees and 13 factories. It designs, manufactures,
distributes and retails fashion and lifestyle products including apparel, accessories,
eyewear, watches, jewellery, home furnishings, fragrances and cosmetics under a range
of brand names: Giorgio Armani Privé, Giorgio Armani, Emporio Armani, Armani
Collezioni, AJ | Armani Jeans, A/X Armani Exchange, Armani Junior, Armani Teen,
Armani Baby and Armani Casa.

With approximately 500 stores worldwide, the Group's exclusive retail network currently
comprises: 81 Giorgio Armani boutiques, 171 Emporio Armani stores, 17 Armani
Collezioni stores, 165 A/X Armani Exchange stores, 16 AJ | Armani Jeans stores, 6
Armani Junior stores e 33 Armani Casa stores in 46 countries.

Giorgio Armani S.p.A. was founded in Milan on July 24th, 1975 by Sergio Galeotti and
Giorgio Armani - the company’s current President, Chief Executive Officer and sole
shareholder - and later that year, the first Giorgio Armani Borgonuovo 21 ready-to-wear
collection (S/S 1976) was presented.

After a successful first year of operations, Giorgio Armani S.p.A. began to broaden its
portfolio of clients and expanded its European presence. The year 1978 marked an
important turning point in the company’s history when it established a licensing
agreement with GFT (Gruppo Finanziario Tessile), giving Giorgio Armani S.p.A. the
opportunity to invest in a new headquarters that included showrooms and press offices.

In 1979 the business started its overseas expansion by establishing the Giorgio Armani
Corporation in the United States. By the end of the 70s Giorgio Armani S.p.A. had
emerged as one of the leading international fashion house and had launched several new
lines: Le Collezioni, Mani, Armani Junior, Giorgio Armani accessories, underwear and
swimwear.

In the early 80s Giorgio Armani S.p.A. established an important licence agreement with
L'Oreal (formerly H.Rubinstein) for fragrances and also launched the Emporio Armani
and Armani Jeans collections. In the same period Giorgio Armani S.p.A. opened the first
Emporio Armani store (Milan) followed the next year with the opening of the first
Giorgio Armani boutique (Milan). The company also began to strengthen its commercial
and marketing divisions, while building the values of its brands and the philosophy of
management, which continue to be fundamental to the success of the business today.

In the second half of the 80s, Giorgio Armani S.p.A. continued its overseas expansion by
opening Giorgio Armani Japan in 1987 through a joint venture with Japanese Itochu
Corporation and the Seibu Department Store, followed by the signing of a licensing
agreement for eyewear with Luxottica Group Spa in 1988.

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As part of its strategy to maintain control over product quality and distribution, Giorgio
Armani 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%), the
complete acquisition of which was finalized in 2001 through an OPA.

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

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

In 2001, continuing with the Group’s strategy to take greater control over all aspects of
its manufacturing, distribution and retail activities and to further focus on the ‘Made in
Italy’ content of its brands, a joint venture company with Vestimenta SpA (one of the
Armani Group’s licensees since 1979) was formed for the production and distribution of
the men’s and women’s Giorgio Armani top line. The company also opened the first
Giorgio Armani Accessori store (Milano) and worldwide commercial offices and
showrooms, including the Armani/Teatro realized in collaboration with architect Tadao
Ando.

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

The year 2003 once again saw the Group investing significantly in its retail network with
11 renovations and a further 30 new openings, including the third Armani multi-brand
store covering 1,000 square meters at Theatiner 12 in Munich (the first Emporio Armani
store in Germany). In addition, the world-wide roll-out of exclusive Giorgio Armani
Cosmetics counters in select specialty and department stores is accelerated as a result of
the outstanding sales performance in existing outlets. Giorgio Armani Men’s fragrances
are 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 Euro
600 million of internally generated funds on strategically important activities, including
the evolution of its manufacturing base, the expansion and renovation of its retail
network, 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 the
worldwide production and distribution of a new line of Giorgio Armani hosiery and
bodywear.

Giorgio Armani S.p.A. and EMAAR Properties PJSC signed a Letter of Intent for the
establishment of an innovative worldwide collection of ‘Armani luxury hotels and
resorts’.

Giorgio Armani opens Armani/Three on the Bund in Shanghai, which includes Giorgio
Armani boutique, Emporio Armani, Emporio Armani Caffè, Armani Fiori and Armani
Dolci areas.

In 2005, Giorgio Armani S.p.A. announces new important strategic initiatives which
underline the company’s continued approach to expansion: the launch of Armani Privé
couture collection reflecting the increasing desire for customization and personalization
at the top end of the market; and at the end of the year, the exclusive world of
Armani/Privé expands its frontiers with the launch of Borgo 21 timepieces; a formal
contractual agreement is signed between Giorgio Armani S.p.A. and EMAAR Hotels &
Resorts LLC for the development of an exclusive collection of ‘Armani Hotels and
Resorts’, foreseeing the opening of at least seven luxury hotels and three vacation resorts
within the next ten years. At the end of October, the Armani Group using the TWFA
Exhibition in Cannes as a platform announces its plans for a ‘fast-track’ expansion in the
Duty Free and Travel Retail marketplace, declaring its future planned openings at
London Heathrow airport, in Guam’s prestigious redevelopment of the DFS Galleria and
at Japan’s Narita airport. Meanwhile, another agreement is also established between
Giorgio 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 Armani
Exchange brand throughout the world. Finally, a global beauty website
www.giorgioarmanibeauty.com is launched, demonstrating the company’s commitment
to embrace fashion and beauty within the online sphere.

In 2006, the Armani Group announces his support of the (Product) RED, the pioneering
global business initiative launched by Bono and Bobby Shriver for The Global Fund in
the fight against AIDS in Africa. In support of RED, Armani is designing an Emporio
Armani (Product) RED capsule collection, including clothing, accessories, eyewear,
watches, jewellery and fragrances. Also casual wear is still going strong and becomes
more popular than ever: while Armani Jeans celebrates its first 25th Anniversary, a
special series of athletic shoes for Spring / Summer 2007 season is created by a
collaboration 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 to
develop and strengthen the retail network and was entirely self-funded.

The world’s 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 women
and Skin Minerals for men.

Also in 2007, Armani’s fourth concept store after Milan, Hong Kong and Munich, was
opened in Tokyo’s Armani/Ginza Tower; the store covers 6,000 square meters and
includes the first Armani/Spa.

During the same year, a strategic marketing agreement was signed between Giorgio
Armani and Samsung to develop high-end electronic and consumer products, including
the launch of a Giorgio Armani mobile phone, the Armani/Samsung Television and the
Emporio Armani Samsung mobile, “Night Effect “.

The end of the year saw the launch of Emporio Armani’s US e-commerce website, with
services to be extended to Europe in 2008.

In 2008, Giorgio Armani S.p.A. and Como Holdings, Inc. announced the Armani Group’s
acquisition of a further 25% of the joint venture company Presidio Holdings Ltd, with
both shareholders now enjoying equal holdings in the company.

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

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

Armani/5th Avenue in New York will be the fifth Armani concept store and inaugurated
in 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 Florence
celebrated 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 concept
was 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 appear
on 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 of
sales 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) for
the 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 Caffè, Nobu, Arte, Fiori, Libri.

2001: Establishes a joint venture company with Vestimenta S.p.A. for the production and
distribution 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 TADAO

ANDO.

2001: Successfully completed acquisition of apparel manufacturer SIMINT,

manufacturing company.

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

2002: Completes acquisition of highly-respected Reggio Emilia-based knitwear

manufacturer, Deanna S.p.A.2002: Acquires share control of "Guardi S.p.A.", a factory
specialised 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|Armani
Jeans, Emporio Armani Caffè, Armani Libri, Armani Fiori and Giorgio Armani
Cosmetics areas.

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

2003: Opens Armani/Privè (Milan), an exclusive lounge bar created within

Armani/Manzoni 31 store.

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

2004: The Armani Group awards Wolford AG, a multi-year license for the worldwide
production 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 for
the establishment of an innovative worldwide collection of 'Armani luxury hotels and
resorts'.

2004: Opens Armani/Three on the Bund in Shanghai, the fourth multibrand store
including Giorgio Armani boutique, Emporio Armani, Emporio Armani Caffè, Armani
Fiori and Armani Dolci areas.

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

2005 Giorgio Armani Japan signs lease for Ginza building which will be the new Tokyo
flagship 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/X
Armani Exchange brand throughout the world.

2005 Armani Group, using the TWFA Exhibition in Cannes as a platform, announces its
plans 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 global
business initiative launched by Bono and Bobby Shriver for The Global Fund in the fight
against AIDS in Africa.

2006 The Armani Group signs a licensing agreement with Mirella S.r.l Industria
Calzature, for the production and distribution of children’s footwear.

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

2006 Giorgio Armani announces a new collaboration with Mizuno to create a special
series 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 Armani
Exchange

2007 Opens new Emporio Armani store in Charles de Gaulle Airport, France, in ongoing
programme 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 at
www.emporioarmani.com

2007 Giorgio Armani and Samsung announce new strategic alliance for the creation of
innovative 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 Armani
boutique, Emporio Armani, Armani/Casa, Armani/ Ristorante and the first Armani/SPA

2007 Giorgio Armani launches Armani / Ginza tower official website at

www.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 the
Armani Residences in Marassi.

2008 Opens first Emporio Armani flagship store in Moscow

2008 Opens his largest boutique in Milan’s Via Montenpoleone

2008 The Armani Group and the Molteni Group announce the formation of a joint
partnership for the future production and distribution of kitchen systems under the brand
name “Armani/Dada”.

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

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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 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.

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.

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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
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.

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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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BUSINES VALUES AND POPULARITY

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BUSINES VALUES AND POPULARITY

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 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
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.

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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.
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.

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CONCLUSION

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CONCLUSION

When Giorgio Armani's business partner died in 1985, leaving their Italian fashion house
without a commercial manager, the future seemed bleak. Mr. Armani, who for the
company'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: a
designer who also controls the business side of his empire. Other designers have tried to
follow in Mr. Armani's footsteps, but no one yet has embodied the two facets of the
luxury-goods industry as successfully.

If Mr. Armani's design acumen was visible early on -- ripping the traditional stiff lining
out 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 luxury
Giorgio Armani label, introducing lines such as Armani Jeans for casual clothes and
Armani Exchange for trendy urban wear. He has expanded the Armani brand into a range
of product categories such as accessories, home furnishings, restaurants, car interiors,
chocolates and, most recently, hotels. Giorgio Armani SpA has become one of the
world's biggest fashion groups, with 126 million euros, or about $152 million, in profits
on 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 than
avant-garde, as a businessman Mr. Armani has been willing to take risks. He was one of
the first designers to make an event of dressing Hollywood stars, paving the way for
celebrity marketing. When, during the late 1990s, luxury-goods companies like LVMH
Moet Hennessy Louis Vuitton and Gucci Group frantically bought up small fashion
houses to become multibrand conglomerates, Mr. Armani stayed solo. He snubbed an
acquisition overture by LVMH chief Bernard Arnault.

The perennially tanned, white-haired designer owns 100 percent of his company, has no
direct 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 Armani
universe 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

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