Elegan:a non significa essere notati, ma essere ricordati.

Elegance is not about being noticed, but about being remembered.

Giorgio Armani
Agenda
ompany Presentation
Business Model
International Distribution Strategy:
Retail
Wholesale
Licensing
SWOT Analysis
onclusion
Giorgio Armani
Giorgio Armani was born 11 July 1934 in
Piacenza, Italy
Worked in a department store, La Rinascente,
as a window dresser
A designer in the well-known Iashion house
Nino erruti
In 1974, with assistance oI his partner, Sergio
Galeotti, he established his own company
One oI the world's most recognizable brands,
and the sole owner oI the $7 billion label
Company History
oundation oI Giorgio Armani S.p.A through Giorgio
Armani and Sergio Galeotti
Licence Agreement with
GT (Gruppo inanziario Tessile)
Armani orporation in the USA
1970s
1980s 1990s 2000 2001 2002 2003 2004
Company History
Agreement with LOreal
Breakthrough in Hollywood through
American Gigolo
Opening oI the Iirst Armani store in Milan
Licensing with Luxottica Group S.p.A, a producer oI
spectacles
Joint Venture in Japan
Death oI long time Iriend and business partner Sergio
Galeotti
1970s 1980s 1990s 2000 2001 2002 2003 2004
Company History
Share control in Antinea S.r.L
Simint S.pA
Intai S.pA
Opening oI Iree standing stores in Milan,
London and Tokyo
License Agreement with ossil Inc.
New Accessories Divison
E-ommerce start in the USA
1970s 1980s 1990s 2000 2001 2002 2003 2004
Company History
Acquirement oI GT manuIacturing Iacilities
Launching oI global website
Joint Venture with Zegna Group
Opening oI the Iirst Armani asa store and Armani
multi brand store in Milan
1970s 1980s 1990s 000 2001 2002 2003 2004
Company History
Establishing oI Borgo 21- joint venture with
Vestimenta S.pA
Opening oI Armani theatre
ull acquisition oI manuIacturer SIMINT
1970s 1980s 1990s 2000 001 2002 2003 2004
Company History
Acquisition oI manuIacturer Deanna S.pA
Purchase oI shares oI Guardy S.pA
Opening oI multibrand store in Hong Kong
1970s 1980s 1990s 2000 2001 00 2003 2004
Company history
New license agreement with SaIilo S.pA,
Luxottica agreement ends
Armani Prive introduced
1970s 1980s 1990s 2000 2001 2002 003 2004
Company history
License Agreement with WolIord
Agreement with EMAAR Group to establish luxury
hotels and resorts worldwide
1970s 1980s 1990s 2000 2001 2002 2003 004
Company history
License with SaIilo extended until 2012
Joint Venture with omo Holdings Ior the
expansion oI ARMANI Exchange Brand
005 006
%he Armani Business Model
%he Strategy
Developing a Iully diversiIied, yet coherent worldwide Iashion
and luxury brand
Brand Positioning: maintain prestige and develop masstige conjointly
Presence in all the lucrative segments oI the Iashion market
reate an Armani liIestyle
Direct control over all the aspects oI the design,
manuIacturing, distribution and retail processes.
Extension oI the worldwide direct retail network
Geographic Expansion into New and Emerging Markets
3 staple principles
Brand stretching
Vertical integration and licensing
International retail investment program
Brand Stretching Strategy: a lifestyle brand
ont fust wear Armani' Live Armani'
Brand Extension
Leveraging its strong brand equity in the Iashion apparel market,
Giorgio Armani has ventured into other related categories like
eyewear, watches and cosmetics.
Giorgio Armani Occhiali, leg end body wear, cosmetics, proIumi, gioielli,
orologi
But Armani has not stopped at just these product categories: He
has extended the brand into multiple other categories such as
Armani asa (up-market Iurniture), Armani-branded Dolci
(conIectionary), and Armani-branded iori (lowers).
In addition to this wide portIolio oI brands, Armani has also
entered the services market: restaurants, nightclubs and caIIe
under the Armani Brand. He also recently struck a deal with
Dubai-based property group Emaar to come up with a chain oI 14
Armani branded hotels and resorts by 2011.
Brand Extension: the philosophy
"If you think of a woman in an Armani suit in her house, why should she be sitting on
a chair that has nothing to do with her spirit?" Giorgio Armani
Armani Casa
"When I think about fashion, I think about something intrinsic in my life. When I
think about style, I think of it as the only real luxury that anyone can afford to indulge,
with or without money. When I think about elegance, I think of how one achieve this
only by silencing loud trends." Giorgio Armani
Style as a luxury everyone can afford
"We sell everything from jeans to dresses worth thousands of dollars. 1hat
means the brand has to remain untarnished and credible at every level of the
market." Giorgio Armani
Strong internal coherence and importance of nourishing the brand equity
!roduct portfolio
Wlothing accounts Ior the
majority oI the wholesale
turnover
WLicenses are gaining more
and more importance.
ParIumes and osmetics in
particular.
WIncreased importance oI the
accessory line (other)
004
Brand !ortfolio
004
inancial Soundness
Armani Group
WPrudent inancial
Management to produce
enough cash Ilow to support
the expansion objectives
Wontinuous Investment
Program in Retail
WInvestment in plants,
machinery and IT Systems to
increase the eIIiciency oI
production activities
004
'ertical Integration
The group has chosen to
take direct control over
almost all aspects oI design,
manuIacturing, distribution
and retail.
Investments in plants and
Iacilities also served to
reinIorce Armani` Made
in Italy image.
"Only I know what I want. And my
message has to be consistent from
beginning to end," G.A.
Geographical coverage
Italy
18%
Rest of Europe
37%
North America
24%
Far East
12%
Rest of
the world
9%
of total %urnover, 004
Armani`s specificities
ully diversiIied worldwide Iashion and luxury brand
ocus on developing a solid, organized and
consolidated Business
Growth Iuelled by internal business expansion and
not by acquisitions
inancial Independence
%he Armani Distribution Strategy
Evolution of the business model
1975: Armani and Sergio Galeotti Iounded the Iashion house
Licensing oI the production to GT
Apparel sold to wholesale clients
Early 80s: entrance in the retail business
Opening oI the Iirst Iree standing stores: Giorgio Armani and Emporio Armani
boutiques in Milan
90s: Gaining control oI the industrial side oI the business
e started thinking like industrialists. Even then it was clear to us that what
was really important was the quality of the product and how it was distributed
to the stores. It was about controlling the industrial side of the business It was about controlling the industrial side of the business,
%he main reason I didnt get involved in that (acquisitions) was because I still
had a lot to accomplish here. the accessories and home collections, the hotel
business. At the time I was busy with making Ciorgio Armani as solid,
organized and consolidated as possible.
2000- Present: ompleting the transition Irom Iashion and luxury brand to
liIestyle brand and entrance in emerging markets
Distribution Strategy
Two main image brand
distributed mainly
through Iree standing
stores or Iranchises
Sub-brands to widen the
market coverage
distributed mainly
through shop in shops
and wholesale
Licensing to widen
horizontal brand
extension
N
380
DOS 135
ranchises 245
397
ree standing stores
In-store shops
Distribution hannel L|cens|ng
uCS LoLal
81W 42 38
Accessorles 3
Lyewear Safllo (2003)
Poslery and underwear Wolford (2004)
arfums
CosmeLlcs
3 11
81W 46 121
Accessorles 1
Lyewear Safllo (from 2003)
!ewelry
WaLches
arfums LCreal
6 13
70 Cngs
2
6 13
2
2
1
1
Armanl !eans Caffe
Armanl nobu
Armanl llorl
Armanl !unlor
Lmporlo Armanl Caffe
Lmporlo Armanl
Armanl !eans
keta||
A/x Armanl Lxchange
Armanl Casa
lossll
Clorglo Armanl
8rands
LCreal
Armanl Collezlonl
#etail
In order to gain visibility, assert brand identity and enter new
and emerging markets, Armani has launched an aggressive
retail investement program.
Investments in:
New company owned stores
New Iranchise stores
Renovation oI existing stores
4 multibrand megastores to better comunicate the brand
Directly owned subsidiary who manage distribution activities
in diIIerent markets
International Distribution
Armani/Chater House
Honk Kong
Armani/Fnf Hfe
Munich
Armani/Via Manzoni 31
Milan
Armani/Three On The Bund
Shanghai
Armani Multibrand Megastores in the World
Wholesale
Strong use oI Shop in Shops to widen market
coverage
US Department Stores
Armani asa has added to his direct retail network 90 Shop
in Shops in 2005 and is now present in more than 39
countries
Strong use oI wholesale in Italy
Distribution License to enter the Russian market
A/X Armani Exchange case
icensing
Licensing is mainly used to support Brand and product
extension
Licenses account Ior more than 40 oI the turnover
ManuIacturing & Distribution licenses kept under tight control
The ParIumes and osmetics license to L`Oreal
27 oI turnover
Most important brand in the male luxury parIumes segment
3 most important brand Ior Iemale luxury perIumes
Huge success oI the Armani osmetics Line launched in 2000 and now
selectively distributed worldwide (Armani megastores, department
stores and travel retail)
E-commerce in the US
icensing
Eyewear is also one oI the most strategic licenses:
8 oI the turnover
Ensure brand`s accessibility while mantaining the dream Iactor
Importance oI selective distribution
rom Luxottica to SaIilo
EA Watches and Jewelry license to ossil Inc
6 oI the turnover
Emporio Armani Stores, ossil Stores, selective distribution
E-commerce in the US
Armani Leg and Bodywear license to WolIord
Started in 2004
Distribution in Giorgio Armani and Armani ollezioni Boutiques,
department stores, specialty stores.
International Distribution Strategy
Hybrid retail approach to distribution in new and emerging markets:
Directly operated stores
ranchises, expecially when local knowledge is critical
Licenses
Not Pioneers in emerging markets: aIter extensive market analysis
they entered the hinese and Russian markets.
hina is now the second Asian market aIter Japan with 2 megastores 40
stores and 35 store in-store. Expansion is managed by directly owned
subsidiary Giorgio Armani Hong Kong.
Russia:
Entered the market in 2001 with a Giorgio Armani store in Mosca
Distribution License: Mercury Distribution S.A.
SWO% Analysis
Bibliography
www.giorgioarmani.com
www.emporioarmani.com
http://Ir.wikipedia.org/wiki/Armani
http://hoovers.com/armani/--ID54529--/Ireeuk-co-
Iactsheet.xhtml
L`express du 3 janvier 2005
%hank you for your attention!