By  on January 31, 2005

Since 1957, when Giorgio Armani dropped out of university and started dressing windows at La Rinascente department store, the designer has had close ties to the world of retail and, more specifically, his customers. That’s how he’s managed to grow a couple of Milan shops into a 310-store empire stretching from Boston to Beijing.

“When I was 30 years old and working at La Rinascente, I can remember thinking I’d like to have a store like this someday,” Armani said in 2000 as he unveiled his first sprawling megastore on Milan’s Via Manzoni, a nearly $73 million investment. “I want there to be a sense of discovery and surprise every 15 meters throughout the store,” he said.

Armani commercial and market director John Hooks, who has been with  the house for five years, said the company’s early foray into retail proved to be a shrewd move. Armani and his partner, the late Sergio Galeotti, founded the design house in 1975, licensing production and selling apparel to wholesale clients. In the early Eighties, the pair opened their first freestanding stores — an Emporio Armani and a Giorgio Armani boutique — both in Milan.

“We started as a fashion house — but as the business spread out, [Armani] became involved first in retail before manufacturing. I think [that] was stimulating for Armani and it was also a commercial opportunity,” Hooks said.

Whether he’s expanding his product range or amplifying his retail concepts, Armani has made it possible to sleep in his sheets, sit on his chairs, buy his flower arrangements, leaf through his favorite art books and even eat his chocolates.

“If you think of a woman in an Armani suit in her house, why should she be sitting on a chair that has nothing to do with her spirit?” the designer said in 1992, planting the seeds of Armani Casa.

In fact, Armani has long strived to make his name affiliated with more than clothes. He’s transformed stores into hangouts, adding cafes and eateries.

In 1989, he opened an Emporio Armani Express restaurant in London. For his first freestanding Armani Jeans store, which opened in Rome in 1997, he stocked an in-shop bookstore with titles on fashion, art, film and design, enticing shoppers to linger. The Milan megastore on Via Manzoni is home to no less than a cafe, a Nobu restaurant and a club. A hotel on the top floor is also being considered.“The megastore concept more than any other thing tests the limits of a brand,” said Andrea Ciccoli, vice president of consultancy Bain & Co.

Even more brand diversification could be on the way.

“We’re interested in brand extension and we’re interested in lifestyle,” said Hooks, noting that Armani has always been one to think of fashion’s potential relations with other facets of life. “I think Armani has been an innovator in many ways. Obviously, he was the first to link fashion with spectacle, Hollywood, films and show business.”

Through a combination of branching out in fashion with jeans or children’s apparel and entirely new categories like Armani Casa home furnishings, Armani has built a network of 310 freestanding stores and 397 in-store shops. Hooks said those numbers are destined to grow through initiatives like opening more Emporio Armani stores in the U.S., introducing the A|X business to new markets and setting sights on China.

As for Emporio, Hooks said that the company is looking at various cities like Chicago. A new Emporio will open in Miami this spring. Armani recently renovated Emporio stores in Hawaii, Houston, New York, Los Angeles and Boston. Hooks added that the company is also flirting with e-commerce for Emporio, possibly with a “virtual store.”

 Still, Emporio’s expansion plans aren’t U.S.-specific. A St. Petersburg, Russia, store is due to open this spring, and Hooks said there’s plenty of growing room for units in Germany and Eastern Europe.

“We’re not pioneers in the emerging markets. We’re not the first to go in,” he said, noting that Armani uses a hybrid retail approach of directly operated stores and franchisees, when it’s appropriate or local knowledge is critical. “We’d like to study the market and if possible, make a statement with a freestanding store.”

In fact, franchising accounts for a large portion of Armani’s store count. Of Armani’s 310 freestanding stores, 212 are franchises.

Armani is also studying the possibility of expanding the young mass market-

oriented A|X to new areas like the Middle East and Asian countries where it’s not already present, such as Japan.In terms of growth, Armani is placing its bets on China in a big way. Last April, the designer made his first visit to China to fete a new Shanghai store, Armani/Three on the Bund, his fourth multibrand store in the world. Unlike similar retail formats in Milan, Munich and Hong Kong, the Shanghai version sells the Black Label Giorgio Armani collection, reflecting a corporate choice to focus on the two top lines — Giorgio Armani and Emporio Armani — in China.

Hooks said there are about 15 stores open in China, and the goal is to have 25 by the end of 2005 and 30 by 2008. For now, the group is focused on rolling out freestanding stores with a few franchise partners, since department stores and shopping centers are still evolving in the country.

Handel Lee, co-chairman of the House of Three Ltd., which owns the historic building that houses the new Armani boutique and other tony restaurants and shops, said Giorgio Armani has the same level of iconic status in China as he does in the rest of the world. Anxious to meet a legend in the flesh, thousands of journalists and followers flocked to see the designer during his visit.

“People in China follow what’s going on in Hollywood,” Lee said. “If you go to the markets where knockoff products are sold, you see a lot of Armani.” 

Although China, in sheer volume, will stay a small part of Armani’s business for now, the buzz there seems palpable enough to create a whole new crop of Armani shoppers.

Lee added, “The Chinese said, ‘Yes, the emperor is here.’”

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