MILAN — Giorgio Armani lifted its full-year 2004 sales by 3.5 percent, but higher advertising spending bit into profits. The firm also boasted double-digit jumps in first-quarter retail sales and fall-winter orders.
Armani said Thursday that net profits for the 12 months ended Dec. 31, 2004, slipped 5.7 percent to 126 million euros, or $156.2 million. Revenue rose 3.5 percent to 1.3 billion euros, or $1.61 billion, but the company said sales would have climbed 6.5 percent at constant exchange rates.
(Dollar figures have been converted from the euro at average exchange rates for the 2004 year.)
"Over the last four years we have learned to manage the business in trading conditions that have never been straightforward,' chairman and chief executive officer Giorgio Armani said in a statement. "Whether it has been the decline in the U.S. dollar, the absence of tourism, or the inconsistency of the leading world economies, we are constantly tested.'
The company said it spent an additional eight million euros, or $9.92 million, on advertising last year to push new products in accessories, home furnishings and eyewear. Those expenses contributed to a 7.3 percent slide in earnings before interest, taxes, depreciation and amortization of 238 million euros, or $295.12 million.
But Armani boasted a 16 percent increase in retail sales worldwide in the first quarter of 2005, boosted by double-digit increases in China, Japan and the European Union. A spokesman noted that weaker tourist flows to Europe have forced the company to reach out to local customers, a tactic many luxury players are employing.
First-quarter store sales in the U.S. advanced 3 percent, reflecting a slowdown from the 15 percent growth Armani saw in the first three months of 2004.
"The U.S. market continues to be what we describe as 'cautious," the spokesman said. "The environment is certainly much improved from its condition two to three years ago and we are once again investing in that market with new freestanding store openings and new shop-in-shops.'
He also noted strong sales of men's fragrances like Acqua Di Gio and the recently launched Armani Black Code.
The spokesman said global wholesale orders for fall-winter 2005 are up 10 percent. In particular, orders for Armani Collezioni are up 8 percent; AJ Armani Jeans up 6 percent; accessories up 22 percent; Emporio Armani watches and jewelry up 24 percent, and Armani Casa up 17 percent."The initial indications are strongly positive, with first quarter wholesale and retail sales showing double-digit growth in the majority of our product categories and geographical regions, indicating that the Armani Group is once again on track for another year of increased growth,' Armani said in the statement.
Returning to the 2004 numbers, Armani said strategic investments for the year totaled 50 million euros, or $62 million. Of that sum, 35 million euros, or $43.4 million, went toward opening 16 directly owned stores and renovations of 20 stores.
The company also provided a breakdown of its 1.67 billion euros, or $2.07 billion, in wholesale revenues by brand, product line and geographic market.
The top-tier Giorgio Armani label generated 32 percent of wholesale turnover, while Emporio Armani accounted for 26 percent. Armani Collezioni is the third-biggest revenue-generating brand, comprising 18 percent. AJ/Armani Jeans made up 16 percent, while A/X Armani Exchange generated 7 percent.
Apparel accounted for 53 percent of wholesale turnover, while fragrances and cosmetics were the next biggest contributor, making up 27 percent. Eyewear generated 8 percent and watches and jewelry comprised 6 percent.
European countries generate more than half of the more than $2 billion wholesale business. Italy made up 18 percent, while the rest of Europe accounted for 37 percent, North America comprised 24 percent, the Far East made up 12 percent of sales, and the rest of the world accounted for the remaining 9 percent.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews