Armani: King of Italian Fashion

2 06 2009

Giorgio Armani and the business he developed provide the perfect example of the evolution of the Italian Fashion System from the perspective of the designer. He began as a pure designer, and then gradually acquired various production facilities into his company on his route to becoming a fashion and lifestyle powerhouse.

The Man

Giorgio ArmaniThe following is a general timeline of the designer’s life and business achievements through the end of the 20th Century:

1934: Armani is born in Piacenza, Italy, where he grows to study medicine

1957: Armani abandons his medical studies and begins work as a visual merchandiser and buyer for Italy’s leading department store, La Rinascente

1964: Armani begins working for Nino Cerutti, where he learns tailoring and materials in menswear

1970: Armani and Sergio Galeotti establish a freelance fashion design studio, doing contract design for various manufacturers including Gibo, Sicons, Boulevard and Montedoro. Armani learns what works and what doesn’t work for industrial production.

1974-5: The first Giorgio Armani menswear collection is produced under license from GFT, followed by his first womenswear collection. Jackets and evening dresses were an instant hit.

1975-82: Armani establishes vast line extensions, including Giorgio-Armani-Borgonuovo 21 (men’s and women’s); Giorgio Armani-Le Collezioni (men’s worldwide and women’s N. America); Mani (men’s N. America and women’s ROW); Armani Junior; Armani Underwear, Swimwear and Accessories; Emporio Armani; Armani Jeans; and, Armani Bridal Collection

1982 TIME cover1982: TIME Magazine dedicates a cover to Armani, who is the first designer to be featured on the cover since Christian Dior

1984: Armani ventures into brand extension through the launch of Armani Fragrance, the license of which is ongoing with L’Oreal

1987: Armani continues brand extension in Armani Eyewear through a licensing agreement with Luxottica, which was canceled 3 years ago and moved to competitor Safilo

1991: Armani offers further brand extension on the US market through the launch of Armani Exchange

1990-2000: Armani practices business consolidation and vertical integration by acquiring production facilities and direct retail ownership, and establishing additional Joint Ventures in production and distribution

2000: Armani launches his first online store, www.armaniexchange.com, on the US market, as well as his line extension into housewear with Armani Casa

2005: Among his numerous line extensions, Armani launches Armani Prive, his first haute couture collection. He provides live online streaming of the collection’s first runway show via MSN.com

2006: Armani gets ahead of the game in Corporate Social Responsibility by joining (RED), an organization committed to fighting AIDS in Africa

2007: Armani launches another online store – this time for the Emporio Armani line – on the US market, along with associated blogazine and soundtracks at www.styletraxx.com

2008: Armani launches one of the first online luxury stores for a singular brand on the European market with Emporio Armani

Armani’s Brand Signifiers

Roots

In the 1970s and 80s, as Armani’s sisters and female friends were heading into the business world, he noticed a common complaint that there was no practical business wardrobe available for women. Since Armani was coming from menswear and tailoring, he took the men’s jacket and deconstructed it from a rigid and straight form into a soft form, fitted for women. This seemingly gender-ambivalent form was exactly what professional women were looking for. Now with businesses in men’s and womenswear, Armani continued to develop his brand through product and line extension, always focusing on his brand codes and the roots of the brand for consistency.

Female Prototypes

Marlene DietrichArmani, like many designers (and marketers), had an image of the ideal customer whom would wear his clothing, and later buy his additional products. Actresses Marlene Dietrich, Lauren Bacall and Greta Garbo were referenced for their supreme confidence and understated beauty bursting with sexuality, in addition to more modern actresses such as Lauren Hutton, whom he dressed in American Gigalo, along with Richard Gere.

Of course, his ideal woman is also very tall and slim. Nothing typical there, right?

Home Town Colors

milan's galleriaLike Dolce & Gabbana to Sicily, Armani drew inspiration from the business center of Italy, the City of Milan. In addition to the classy dress code of the Milanese, Armani used a color pallet derived from the industrial, polluted, Gothic city.

He incorporated the drab colors of black, white, blue, grey and beige (and his favorite blend, dubbed “greige”) to create a distinct selection that would unify his various product categories and lines.

In later years, Armani would take more than influence from another adopted home: he used a chemical composition from the Obsidian native to the Italian island of Pantelleria, where he has long kept a vacation home, for his cosmetics line.

An Evolving “Core Business”

Brand Extension (Moving into other product categories- remember this began in France)

Over the decades, Armani has amassed capabilities for the design, production and retail arms of his company, allowing the core of his business to expand while maintaining control over the total brand image. Throughout the years, brand extension has grown the company as follows:

armani chocolate1975: Ready-to-wear (RTW)

1980s: RTW + Accessories

1990s: RTW + Accessories + Men’s Accessories + Home

2000s: RTW + Accessories + Men’s Accessories + Home + Home Expansion + Watches & Jewelry + Hospitality (Hotels & Resorts) +Restaurants + Nightclubs + Chocolates (!)….

Line Extension (Moving into other retail channels, target markets or price ranges; this began largely with Armani)

Armani has developed more than ten different lines under his brand. Some have been very successful (like Emporio Armani, which has the same target market as Dolce & Gabbana or Gucci), while others were less successful (Mani, which was a lower-priced line, now essentially replaced by Armani Exchange). Below you will find a graphic I made to illustrate the quality/style differences in the main Armani lines, based on a discussion I had with the marketing manager of Emporio Armani.

Armani brand architectureContesting the King

As Armani developed his brand structure, he continued to add only lower-level lines to his portfolio, with his original Giorgio Armani line (ready-to-wear) at the top. In order to avoid diluting the line too much with the constant reduction of quality, he finally added his haute couture line in 2005 as a balance.

While Armani is the uncontested master of Italian brand and line extension, and there is no question of brand uniformity, he has had a challenging time conveying the unique characteristics between his lines, particularly when dealing with certain product categories.

For example, would you know the difference between the two lines, based on these ads? For some, the distinctions are vague. (For others, not so much!)

ea shades

ga shades

In addition, Armani has had problems developing bags and shoes. He never quite nailed the category’s design, and didn’t find a good licensing partner to assist him. As he has acquired many other production capabilities and know-how from former licensees, this gap in ability presents a major set-back. In the future, with many high-end designers depending on accessories sales, Armani may suffer greatly.

Founder’s Dilemma

Additional problems Italy’s reigning King of Fashion is facing is known as the “Founder’s Dilemma” – how to hand down the brand after retirement, without losing the relevance of the brand. This si a typical challenge seen in businesses where the founder is the life and personality of the brand. As we have seen, many of the French brands have achieved a successful brand transition through rock-star designers with their own distinct personalities (such as Lagerfeld at Chanel, or Galliano at Dior), while other brands have a quieter approach (Maison Martin Margiela silently designs for Hermes).

Financial Independence

As the financial burdens inherent to the fashion industry continue to rise, requiring constant innovation both on product design, business and communication strategy, Armani remains the only major fashion player to be the only shareholder of his company. He has never even taken out a bank loan! This has afforded him total control over his business and design decisions, however, one must question what will happen when he retires or the economic downturn and extensive company expansion catches up with him.

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