MILAN — The first effects of Giorgio Armani’s new brand strategy are materializing.
At the designer’s manufacturing plant Giorgio Armani Operations in Settimo Torinese, about 83 miles East of Milan, 110 employees are expected to be laid off out of a total 180. The company is specialized in manufacturing men’s jackets and coats.
“For us, this decision is not acceptable and we will definitely work to limit the layoffs,” said Simona Lancellotti, the representative of the Filctem CGIL trade union. The cuts are a consequence of the designer’s decision to reorganize his brands, revealed in February. As reported, the company will cease the Armani Collezioni and Armani Jeans brands and use only the Giorgio Armani, Emporio Armani and A|X Armani Exchange names. The new strategy will be effective starting with the spring 2018 season. Armani Collezioni and Armani Jeans will be blended into those three main lines. Lancellotti observed that this obviously “affected the volumes of the production.”
The factory’s employees were on strike for two hours on Thursday and may suspend work all day on Friday. The workers at that plant were hit by two years of solidarity contracts, which expire in September.
The Armani company had no comment.
Globally, the company counts 9,068 employees.
The restructuring will also affect the group’s giant network of stores. At the end of 2015 according to the last available figures, there were 2,983 points of sale, composed of 165 Giorgio Armani stores, 338 Emporio Armani stores, 754 Armani Collezioni stores, 238 A|X Armani Exchange stores, 880 AJ Armani Jeans stores, 198 Armani Junior stores and 56 Armani/Casa stores in more than 60 countries across the globe.
The designer opened his first Emporio store in Milan in 1981 — before his Giorgio Armani venue in the city in 1982. The designer launched his diffusion lines early. In 1979, just four years after founding his company and his signature Borgonuovo label, he started his first diffusion lines, then called Giorgio Armani Le Collezioni and Mani. In 1981, he created the Emporio Armani and AJ/Armani Jeans collections. Ten years later, an even more mainstream A/X Armani Exchange was born. Over the years, the Emporio Armani image was tweaked from that of a younger diffusion line to that of a trendier, more fashion-oriented complement to the top-tier Giorgio Armani line.
For a vertically integrated group to reduce overlap among the brands, the company over the years brought production in-house rather than relying on past licensees such as those with GFT and Simint. There are now seven Armani manufacturing plants.
Emporio Armani will become “a cluster of ideas,” the designer said after his show in February, referring to distribution both at retail and wholesale. “We are rethinking our stores. I don’t believe in a strict separation of categories, jackets all in one place, skirts all in another, pants in yet another.” He also pointed to the decision as to avoid confusion between the labels.
In 2015 — a milestone 12 months that marked the 40th anniversary of the namesake designer’s company — Armani reported revenues of 2.65 billion euros, or $2.94 billion, up 4.5 percent compared with 2.53 billion euros, or $3.36 billion, in the previous year, lifted by organic growth in all of the group’s brands and distribution channels.
Wholesale revenues, including licenses, amounted to 4 billion euros, or $4.44 billion, compared with 3.7 billion euros, or $4.92 billion, the previous year.
As reported last year, Armani confirmed he had established the long-rumored Giorgio Armani Foundation which, while aiming to fund social projects, also ensures that his fashion group will live on.