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Armani Exchange’s Brand Plan

A|X Armani Exchange plans to expand its 94-unit retail operation, concentrating on the Sunbelt.

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DALLAS — A/X Armani Exchange, the licensed retail chain that offers the style of Giorgio Armani at lower prices, is gearing up for a multiyear new store rollout.

Harlan Bratcher, president of New York-based A/X Armani Exchange, said in an interview that the goal is to capture young urban shoppers with sexy fashions, sleek shops and the allure of the Armani brand.

“Our target customer is contemporary, focused, modern and fast,” Bratcher said as he prepared to open stores in Austin and San Antonio, Tex., his hometown. “The A/X Armani Exchange customer is not a traditional customer. We’re going for the 18- to-28-year-old shopper who is young, urban and sexy. She goes out at night to clubs and is very social. Music culture is important to her. But she also wears our brand to work, as well. It’s part of her lifestyle.”

The company, which has 94 stores, intends to focus on the Sunbelt, although units in Palo Alto, Calif., Chicago and New York are also planned for spring 2006.

“We’re enjoying great success with our stores in Dallas and Houston,” Bratcher said. “There are plenty of customers and plenty of business to be done with more stores. Plus, our target audience is a part of the populations of San Antonio and Austin, both of which are young and cosmopolitan towns. Potentially, we can look at El Paso, New Orleans and Oklahoma City. And we’re also very strong on the West Coast.”

Asia, especially China, and Australia are also components of A/X Armani Exchange’s growth plans. Bratcher views them as relatively untapped by competitors.

The company will have 97 stores worldwide by the end of this year, including 57 in the U.S., he said.

The strategy is driven partly by statistics showing there are more than 40 million U.S. consumers aged 15 to 24, a group with annual purchasing power of $350 billion, according to MarketResearch.com and Simmons Market Research Bureau. The demographic includes students and young professionals who are closely influenced by music, fashion and culture, and who have a strong passion for brands.

This story first appeared in the June 28, 2005 issue of WWD.  Subscribe Today.

Other brands staking a claim on youth and the twentysomething crowd range from more streamlined and sophisticated labels such as CKCalvin Klein, Marciano, Guess, Benetton, Club Monaco, Sisley and Diesel to urban hip-hop lines Baby Phat, JLo and other celebrity labels.

A/X Armani Exchange introduced a new store concept two years ago that reflects Giorgio Armani’s signature style, with soft, natural colors such as cool gray and beige; warm, ambient lights; gray bleached wood floors; lots of texture, including aluminum walls, and advertising campaign images in light-box billboards behind cash registers to reflect the seasonal trends. The stores average about 3,500 square feet and are in malls as well as freestanding, depending on market demographics. Three to five new units per year are planned during the next few years. Upbeat dance and club music will play throughout the stores.

“It’s an edgy look and approach, but still relates to the A/X Armani Exchange collection,” Bratcher said. “Flexibility is key.”

He declined to release sales figures for the privately held company, but said the chain’s 5,411-square-foot New York flagship is the top-volume unit. The brand is not sold at wholesale.

Women generate 45 percent of sales at A/X Armani Exchange. Fashion is masterminded by Armani, who has major creative control of every aspect.

“The beauty of A/X Armani Exchange is that Mr. Armani is clearly behind it, and the brand reflects his vision and sensibilities,” Bratcher said. “Even though we’re a licensee, Mr. Armani personally approves every item in the collection and each image used in marketing and advertising campaigns, including the models.”

For fall, key women’s trends include a darker color palette with an emphasis on glamour. “There’s lots of luxe in the fall collection,” Bratcher said. “Styles are tailored, cleaner and more fitted. There will be more leathers, fitted jackets, military-influenced officers’ coats, high collars, pencil skirts and a few more dresses. It’s a bit more luxurious for us with the use of the fabrications and the presentation. It’s a little more grown up and sophisticated, and speaks for our customer because it goes from day to night. We’re offering both long and short hemlines to meet lifestyle needs.”

Retail prices range from $40 for a top to $295 for leather or faux fur pieces. Jeans retail from $88 to $128.

The summer advertising campaign was shot by Enrique Badulescu and features tanned models lounging in and near a flower-filled swimming pool wearing a brightly colored sheer tunic, a white crocheted tank dress and distressed denim jeans.

The A/X Armani Exchange business is owned by Presidio International Inc., Singapore, which pays royalties to Armani Group. The group includes licenses for apparel, accessories, eyewear, watches, jewelry, home and beauty under the brands Giorgio Armani, Armani Collezioni, Emporio Armani, AJ/Armani Jeans, A/X Armani Exchange, Armani Junior and Armani Casa.

Armani Group’s retail network includes 60 Giorgio Armani boutiques, 11 Collezionio stores, 122 Emporio Armani stores, 94 A/X Armani Exchange units, 13 Armani Junior stores, one Giorgio Armani Accessori store and 16 Armani Casa stores in 37 countries.

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