Giorgio Armani at the inauguration of the new Armani Casa flagship in Milan.

MILAN — The reorganization of the Giorgio Armani company dented profits and margins last year, but the designer is confident growth will return in 2020. One thing is sure: Armani need not worry about liquidity, sitting on an all-time high cash pile of 1 billion euros, earmarked for further investments in the group’s brands.

In the 12 months ended Dec. 31, the Armani Group saw its net profit decrease 10.5 percent to 242.4 million euros compared with 271 million euros in 2016.

Revenues in 2017 totaled 2.33 billion euros, down 7 percent compared with 2.51 billion euros in the previous year.  At constant exchange rates, sales dropped 5.8 percent.

The results, the company said, were not unexpected, fitting “in the context of a cycle of anticipated and contained decline in net revenues and operating margins,” attributed to the consolidation and rationalization of the group’s international distribution network and the simplification of the portfolio of brands. In February last year, Armani, who not only owns his fashion house but is also its chairman, announced he was planning to focus on the Giorgio Armani, Emporio Armani and Armani Exchange labels, effective with the spring 2018 season. In this context, the Armani Collezioni and Armani Jeans brands have been integrated and merged into the Emporio Armani and Armani Exchange lines, respectively. The goal is to strengthen the individual brands and maximize their potential in an increasingly competitive and changing market.

“This reorganization is expected to result in a gradual and temporary decrease in net revenues and proportionally in related margins, over the next two years, to definitively leave the way open for a new phase of development and growth in 2020, achieved on more focused and selective distribution bases, consistent with the mission of all three brands.”

Last year, indirect revenues, including licenses, amounted to 3.92 billion euros, in line with 3.94 billion euros in the previous year.

Earnings before interest, taxes, depreciation and amortization totaled 438 million euros, or 18.7 percent of revenues, down 5.4 percent compared with 462.9 million euros in 2016.

In 2017, the group invested 82.5 million euros, a decrease of 1.6 percent compared with 83.9 million euros in 2016.

At the end of 2017, the group’s net equity for the first time reached and exceeded the level of 2 billion euros and amounted to 2.02 billion euros. Net cash and cash equivalents increased 14 percent to reach 1 billion euros, compared with 883 million euros in 2016. “This substantial level of liquidity offers the group the opportunity to make increasing investments in its own brands with confidence, in order to further strengthen its competitive position in global markets and support the strategy of simplification and repositioning of its brands, which became fully operational in 2018.”

The Giorgio Armani umbrella includes the signature line, the couture line Giorgio Armani Privé and the home and interior design collection Armani/Casa. Last year, the designer unveiled a store in Milan dedicated to the home line, which covers more than 14,040 square feet and has 16 windows, occupying the space that formerly housed design firm and furniture retailer De Padova — a pillar in the history of the city’s design.

Marking the new course of Emporio Armani, the designer is planning to hold a coed show the evening of Sept. 20 during Milan Fashion Week in a still-undisclosed location, with a performance.

The group has been gradually introducing the A|X Armani Exchange collection, which has a strong foothold in the U.S., into Europe, managed directly as part of the relaunch and repositioning plan initiated in 2014. Armani himself stepped back in the studio to front the fall ad campaign for the A|X Armani Exchange label, emphasizing the new strategies for the brand. The designer, clad in youthful, distressed white denim pants although toned down with a black V-neck T-shirt and black blazer, was lensed by self-taught American photographer Billy Kidd alongside three young talents, including Dutch DJ, record producer and musician Martin Garrix; Chinese singer and actor Li Yifeng, and Selah Marley, daughter of Lauryn Hill and Bob Marley’s granddaughter. The designer at the time explained he decided to enlist “three versatile talents, capable of speaking to their peers. And then there’s me, representing the continuous dialogue between the Armani world and new generations, in pursuit of a free, casual and creative style.”

To fuel this dialogue and create engagement with his customers, Armani has been bringing its “Giorgio’s” private members’ night out concept outside of Milan. Introduced at the company’s Armani/Privé nightclub in Milan at the end of 2016, the one-night format, including a mix of performances with DJ-sets, will hit Munich on Sept. 13. The event, which will be hosted at Munich’s Park Café, a neoclassic hip venue, will mark the reopening of the company’s flagship, located on Munich’s Maximilianstrasse. Previously, the “Giorgio’s” pop-up night concept was exported to London in April to fete the opening of the Armani and Armani/Casa boutiques on Sloane Street and to Florence, where the fashion house inaugurated a boutique on the city’s prestigious Via Tornabuoni earlier this year.

In July, Armani called for applications for the second edition of Armani/Laboratorio. Introduced last August, the project consists of an intensive filmmaking workshop offered free of charge, which will allow participants to produce a short film.

Held at the designer’s Silos space starting from November, the workshop’s second edition will be led by Italian director Luca Guadagnino, whose “Call Me By Your Name” movie received widespread critical acclaim and several accolades, including nominations for an Academy Award for Best Picture and for a BAFTA Award for Best Direction. “Armani/Laboratorio is my idea of a ‘film atelier’ where stories are created by students working together with guidance and support from the most highly skilled key players in the industry,” said Armani at the time.

In 2016, the designer — who turned 84 on July 11 — revealed details about the future of his company, confirming 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 and reflects a key priority for the designer — independence.

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