ARMANI SPLITS WITH GFT, ENDS LICENSE

Byline: Samantha Conti

MILAN — It’s the end of the affair: GFT and Giorgio Armani have parted ways after more than two decades.
Following months of speculation, Italian clothing manufacturer GFT has confirmed plans to sell two men’s wear factories and a distribution company to Giorgio Armani SpA, and an Armani spokesman said the Le Collezioni men’s license would not be renewed after it expires on Dec. 31, 2000, confirming reports in these columns on page 2, March 31.
GFT said in a statement Monday it had signed a preliminary, nonbinding agreement to sell one manufacturing plant in Settimo Torinese, outside Turin, and one in Matelica, in the Marches region, to Armani. GFT also said it planned to sell GFT America Fashion Corp., its wholly owned company distributing Armani’s lines in North America, to the designer.
An Armani spokesman declined to comment on the preliminary agreement. “We are still in discussions with GFT. When and if a final agreement has been reached, we will make an announcement,” he said. Industry sources said GFT still had to hammer out various terms of the sale — including layoffs — with Italian unions, and the process was taking time.
The planned sale and the termination of the license signals the end of an era for both companies: GFT’s former owner — and founder — Marco Rivetti helped launch Armani on an industrial scale, putting the manufacturing engine behind Armani’s creativity.
“We had a great adventure together in fashion,” Armani told WWD in 1996 when Rivetti died. “When we started the diffusion business…a lot of people said it would never work, that it was too close to the main boutique label. …With Marco’s vision, we proved them wrong.”
Lately, like many other Italian designers, Armani has been focusing on taking production and distribution in-house in a move to tighten control over quality and increase his company’s margins. “Protecting the Armani name and brand image means taking control of manufacturing and distribution,” said Robert Triefus, Armani’s corporate vice president of communications, in an interview last month.
The death knell for the Armani-GFT relationship first sounded in February 1999, when Armani announced plans to terminate the license for the Le Collezioni women’s collection, which GFT had produced since 1980. The designer began producing that line in-house with the fall-winter 2000 season.
Now, Emporio Armani and the Le Collezioni women’s line are both produced by the designer’s wholly owned factory Antinea outside Milan. The jeans line is produced by Simint, which Armani controls. Last September, the designer decided to start up an accessories line and create that in-house, too, with production coming mostly from small factories near Florence.
GFT said it expects the sale of the factories and distribution company to be finalized by the end of July. A GFT spokesman confirmed that GFT’s last season for Armani was spring-summer 2000. GFT had produced the Le Collezioni men’s line since 1979.
According to industry sources, sales of Armani’s men’s wear reached $120 million in the U.S. alone and are said to account for as much as 40 percent of GFT’s sales. In an interview in December, GFT chief executive officer Roberto Jorio Fili told WWD he hoped to hold onto the Armani license.
“We have been working with Armani for 22 years, and the relationship has been one of reciprocal respect. We sincerely hope that [Armani] stays with us,” Fili said at that time.
In 1999, GFT posted a net loss of $78.1 million, attributed to costs sustained by the company for the termination of the Emanuel-Emanuel Ungaro bridge line and the reorganization of the group. GFT’s sales last year dropped 7.3 percent to $642.6 million.
Last week, GFT said its first-quarter sales dropped 14.1 percent to $163.4 million, while operating profit rose 22.1 percent to $14.6 million. All dollar figures have been translated at current exchange rates.
GFT is a wholly owned division of Italy’s giant Holding di Partecipazioni Industriali (HdP), which also owns Valentino, Fila and the Rizzoli Corriere della Sera publishing group. GFT has been undergoing a major restructuring over the past two years and plans to build a stable comprising a mix of wholly owned companies and licensees.
Earlier this year, HdP reviewed Calvin Klein’s books for a possible acquisition, but decided to pass on it to focus its energies on its media holdings.
GFT has recently changed its name to GFT International Network SpA, or GFT Net, to reflect the international makeup of the brands in its stable. GFT currently produces collections under license for such designers as Calvin Klein, Valentino and Joseph Abboud.