In the 12 months ended Dec. 31, after the contribution from financial operations and tax charges, the group reported consolidated net profits of 169.9 million euros, a 43 percent increase compared to 2019, which Armani on Tuesday said confirms the effectiveness of the “less is more” principle he embraces.
Consolidated net revenues reached 2.02 billion euros, a 26.3 percent increase compared with 1.6 billion euros in 2020. While this represented a 6.3 percent decrease compared with 2.16 billion euros in 2019, sales surpassed 2019 levels in the second half of last year.
In 2021, total revenues from Armani-branded products worldwide, including licensing revenues, amounted to 4.05 billion euros, a 23.7 percent increase compared with 3.28 billion euros in 2020.
As reported, the goal Armani set last year was to return to pre-pandemic levels by 2022, with more than 4 billion euros in revenues that include licenses and more than 2 billion euros in directly consolidated revenues.
Despite the “grave geopolitical crisis in Eastern Europe, between Russia and Ukraine, which threatens to exert a profound depression and distortion on the global economy,” and the reemergence of COVID-19 outbreaks, particularly in China, causing extensive lockdowns in key markets, the Milan-based fashion group also saw growth in the first six months of 2022, as revenues rose 20 percent compared to the same period last year, exceeding pre-pandemic levels.
In light of these results, Armani, who holds the role of chairman and chief executive officer of the group, said he felt “cautiously optimistic” and that he would pursue his “medium- to long-term strategic path, staying true to the principles that have always underpinned my creative and business philosophy, and applying them to all aspects of our strategy.”
The designer, who turned 88 on July 11, said, “This solid and consistent approach has proven to be efficient, even, and especially during these last few years, which have been so complicated for our personal and professional lives. Our group proved to be healthy, from a capital and financial perspective, and this provided some relative respite, even in the face of a potential aggravation of the international scenario.”
In a joint statement, Giuseppe Marsocci, deputy general manager and chief commercial officer, and Daniele Ballestrazzi, deputy general manager and chief operating and financial officer, said the results “are even more encouraging given that they were achieved without undue pressure on sales opportunities, but rather by streamlining the size of the collections, implementing an attentive selection of the distribution network, in line with the brand’s founding principle — ‘less is more’ — and improving the quality of the Armani experience offered to the end consumer.”
As reported, Armani has been vocal about choosing to limit the offer of new collections, responding to the current moment, aligning collections in stores to the seasons.
This decision followed a previous one taken in 2017 to streamline his portfolio of brands, planning to focus on the Giorgio Armani, Emporio Armani and Armani Exchange labels, effective with the spring 2018 season. That meant that the Armani Collezioni and Armani Jeans brands were integrated and merged into the Emporio Armani and Armani Exchange lines, respectively. The goal was to strengthen the individual brands and maximize their potential in an increasingly competitive and changing market.
Marsocci and Ballestrazzi underscored “a relentless work and focus on brand equity,” which together with the group’s financial performance, “confirms the effectiveness of the medium- to long-term strategic framework to which we are committed.”
Revenues from the group’s directly operated stores, which totaled 650 at the end of December, climbed 37 percent over 2020, accounting for more than 50 percent of the total.
The U.S. performed well in 2021 and in the first six months of this year. In the first half of 2022, China slowed down due to the lockdowns but Europe’s performance improved.
Earnings before interest, taxes, depreciation and amortization in 2021 amounted to 435.2 million euros, up 65 percent compared with 263.1 million euros in 2020.
Operating profit amounted to 171.2 million euros in 2021, compared to an operating loss of 29.5 million euros in 2020.
The company expects “a substantial improvement” in operating profitability for the year, subject to potential risks in the second half, including “possible increase in recessionary impacts related to the conflict between Russia and Ukraine; possible new waves of the pandemic, and the tightening of restrictive policies by central banks, aimed at containing inflationary dynamics.”
The group can rely on a cash pile of 1.12 billion euros at the end of 2021, up 21 percent compared with 925 million euros at the end of 2020.
Net assets also grew by about 98 million, amounting to 2.108 billion euros at the end of 2021, compared with 2.01 billion euros in 2020.
Armani last October staged his latest One Night Only in Dubai, back in the city after 11 years to mark the 10th anniversary of his first hotel, located within the Burj Khalifa and developed with Emaar Properties. The hotel actually opened in 2010, but the anniversary event in 2020 was twice postponed due to the COVID-19 pandemic. Armani’s second hotel, based in Milan, opened in 2011.
His need for continuity and timeless designs was reflected by his choice to avoid creating a new collection for the runway show in Dubai, held outdoors at the Armani Hotel Pavilion, and which comprised looks from the spring 2022 men’s and women’s signature collections and a selection of his Privé couture looks from the fall 2021 Shine collection.
“I don’t want to seem like I’m lecturing anyone, but I do feel like a voice in the desert,” Armani told WWD at the time. “There’s this exasperated need to be present around the world, with brands wanting to prove their power, but this can be demonstrated in different ways, with a valid product that is wearable, not necessarily designed to cause a sensation and quickly forgotten. We really do need to slow down and I don’t think much has changed after the pandemic.”
Earlier this year, Armani appointed his nephew Andrea Camerana sustainability managing director, unveiling a new Armani/Values site where “the intention is to engage the entire organization at a global level in the implementation of the sustainability strategy,” the designer said at the time. Values will also post the group’s annual sustainability report.
Camerana has contributed to creating a sustainability strategic committee to analyze and integrate the objectives in the company’s strategies. He is the son of Armani’s sister Rosanna and first joined the Armani Group in 2000. A counselor and formerly a licensing director at his uncle’s fashion house, he exited the group in 2014, while remaining on the board. He has often been mentioned as a possible successor to Armani and, as a relative of the Agnelli family (his father, Carlo, was the cousin of Gianni and Umberto Agnelli), he has been seen as a link with the Exor holding company when rumors last year swirled around its potential interest in the fashion house.