NEW YORK — Giorgio Armani's strategy to open a sprawling, 47,000-square-foot, multifaceted retail destination here signals the designer's commitment to substantially boost his U.S. business.
Over the next three years, Armani will spend up to $100 million to significantly expand his company's U.S. wholesale and retail operations, which account for 25 percent of its worldwide volume. In addition to building the megastore, appropriately called Armani/Fifth Avenue, the capital expenditures are earmarked for several key U.S. growth initiatives.
Among them are:
-- Opening additional Giorgio Armani, Emporio Armani and A|X Armani Exchange stores throughout the U.S.
-- Renovating existing Giorgio Armani boutiques in American cities, as well as 155 Giorgio Armani and Armani Collezioni women's and men's shops-in-shops in U.S. department stores.
-- Launching emporioarmani.com this fall, which will offer e-commerce capabilities.
-- Re-launching Armani Jeans, a sportswear and denim line, in U.S. department stores, beginning this spring at Nordstrom and Bloomingdale's.
-- Expanding accessories, fragrance and skin care products in directly owned stores, wholesale accounts and online.
Although the U.S. market is the company's most important in the world in terms of revenues, Armani, chairman and chief executive officer of Giorgio Armani SpA, told WWD, "There remains great potential for further expansion. This investment in the creation of a completely new shopping experience and a new way of looking at the world of Armani demonstrates the very significant commitment we are making to the long-term growth of the Armani brand in the U.S."
For the year ended Dec. 31, Armani earned $310 million, before interest and taxes, on consolidated sales of $1.85 billion — quite a hefty payday for the designer, who completely owns his company. Worldwide, the Armani brand, including licensed products, generated retail sales of more than $6.8 billion. After the U.S., the next four largest markets, in order, are Italy, Japan, the U.K. and Spain.
The centerpiece of the U.S. expansion will be the fall 2008 opening of the New York flagship at 717 Fifth Avenue, a space currently occupied by Hugo Boss. The space, on the southeast corner of 56th Street, will be converted into a multifaceted retail destination based on a concept Armani pioneered on Via Manzoni in Milan (Armani/Manzoni), and has since built in Hong Kong (Armani/Chater House) and Munich (Armani/Munich). There are plans for a fourth complex in Tokyo's Ginza district (Armani/Ginza Tower) in November.
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