MILAN — The economy isn’t stopping Giorgio Armani from raising his stake in the A|X Armani Exchange venture with Como Holdings Inc. to 50 percent.
This story first appeared in the December 22, 2008 issue of WWD. Subscribe Today.
Nor is the designer slowing his retail expansion, which includes openings of Giorgio Armani flagship stores in Tokyo, Singapore and Doha, Qatar, in addition to the new Fifth Avenue concept store in New York, which will be unveiled in mid-February.
Armani, who already owned 25 percent of A|X Armani Exchange, said Friday his group has acquired an additional 25 percent in the joint venture inked three years ago with Como Holdings Inc., called Presidio Holdings Ltd. Financial terms of the agreement were not disclosed.
The deal Armani signed in 2005 gave him the option to buy the additional stake in November 2008. The venture has helped boost worldwide revenues of the A|X brand, with expected sales in 2008 reaching $520 million, up 74 percent since 2005. In the three-year period, A|X has opened 75 stores, totalling 165 banners in 24 countries.
Armani said the joint venture gave “a fresh impetus” to the brand in new markets and in new product categories. “Fast fashion is a young and dynamic segment of the market which I find particularly stimulating when designing my collections,” said the designer, adding he has “always believed that A|X Armani Exchange has the potential to become one of the world’s strongest youth fashion brands.”
The designer has over the past few years been vocal about reaching out to a younger clientele and “democratizing” fashion. Armani said the venture has helped the company expand “rapidly” in new markets such as the Middle East, South America, China and Southeast Asia. A|X also plans to roll out new stores in the U.S., Canada, South Korea, Japan and the U.K.
“We are determined, as a group, to proceed with our strategic development, in spite of the worrying general economic situation,” said Armani.
Como Holdings is controlled by billionaires Christina Ong and her husband, Ong Beng Seng, Armani’s longtime business partners and the licensees of the A|X Armani Exchange brand. Prior to forming the joint venture three years ago, A|X was mainly distributed in the U.S., Canada, Mexico, Central and South America and the Asia/Pacific region, with the exception of Japan. Through the joint venture, Armani has focused on expanding the brand both in existing and new markets, especially Japan, China, the United Kingdom and the Middle East.
Christina Ong said the joint venture has allowed the brand to expand in new product categories such as accessories, fragrances, eyewear and watches. Ong also noted A|X Armani Exchange was “a pioneer” in online communication and retailing, launching its armaniexchange.com site in 1995 and adding online sales in 1997.
“Our combined forces give us the confidence to look forward to further significant growth in actual and future markets in the years to come,” Ong said.
A|X Armani Exchange was launched in 1991, the same year it opened its first retail store in Manhattan’s SoHo. For 11 years, the Ongs’ Presidio International Inc. subsidiary owned A|X Armani Exchange’s assets and paid royalties to Armani, who owned the trademark. Through the joint venture, Armani owns part of the business and benefits directly from its revenue stream. The A|X Armani Exchange business is just one component of the Ongs’ partnership with Armani. The couple opened the first Armani boutique in 1988 and operate a number of Armani and Emporio stores. In the Nineties, the Ongs helped rescue Simint, Armani Jeans and A|X Armani Exchange’s manufacturer, from bankruptcy.