MILAN — A|X Armani Exchange is ready to go global.
Giorgio Armani SpA announced Thursday that it is forming a joint venture with billionaires Christina Ong and her husband, Ong Beng Seng, to grow the A|X Armani Exchange business worldwide, doubling the number of retail stores and introducing the brand to new markets such as Japan, China, the United Kingdom, the Middle East and Latin America.
Giorgio Armani will form a joint venture with the Ongs, Armani's longtime business partners and the licensees of the A/X Armani Exchange brand, which does the bulk of its business in the U.S. but has a small international presence in select Asian countries, Canada, Australia and Venezuela. The Ong-controlled Como Holdings will own 75 percent and Giorgio Armani will own 25 percent of the new company, Presidio Holdings Ltd. Giorgio Armani has the option to increase its stake to 50 percent in November 2008.
"I think that Mr. Armani, by buying a part of the company, is showing his trust and belief in the brand and its growth," A|X Armani Exchange president Harlan Bratcher said in an interview.
The new joint ownership of A|X Armani Exchange will enable it to expand to areas where there is already evidence of an untapped customer base, like Japan, Bratcher said. The company has data showing that Japanese travelers are shopping at A|X Armani Exchange elsewhere in Asia and in the U.S.
"These are markets that are ready for us," he said. "We know who our customers are as we are part of a masterbrand."
Financial terms of the agreement were not disclosed. The company, however, said business plans call for A|X Armani Exchange's revenue to grow 83 percent during the next three years to $550 million at the end of 2008 from a projected $300 million this year. The retail expansion calls for the number of A|X Armani Exchange stores to double in three years from its current 95 units.
Armani did not release an overall investment figure, but Bratcher said the company spends about $1 million per new store in the U.S., a figure that is likely to change depending on the costs of the local market.
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