ARMANI AND ZEGNA FORM JOINT VENTURE
Byline: Luisa Zargani
MILAN — Giorgio Armani SPA and Ermenegildo Zegna Group have formed a joint venture to produce and distribute the Armani Collezioni men’s line.
On Monday, the two companies announced the partnership in a joint statement. Under the terms of the agreement, Giorgio Armani will be the new company’s main shareholder, retaining 51 percent of the shares, against the 49 percent held by Zegna.
There are no plans for women’s wear in this deal. Armani, as previously reported in these columns, has been trimming its licensing ventures — and when starting new projects, like accessories, it is doing it in-house — as part of its effort to better control the brand.
The joint venture is connected to Armani’s purchase in June of two GFT Net men’s wear production plants based in Settimo Torinese, outside Turin, and Matelica, in the central Marche region. An Armani spokeswoman said the Zegna Group, with its expertise in formal wear, industrial know-how and organizational strength, will be an important asset in the management of these production facilities.
According to the statement, the joint venture will help develop the men’s divisions of Armani Collezioni globally and of Mani in the U.S. through the integration of Armani’s and Zegna’s distribution synergies. Armani will continue to be in charge of the lines’ design and styling. Together with Gildo Zegna, chief executive officer of Ermenegildo Zegna Holditalia, Armani will head the board of the new company.
“I am very pleased with this agreement, which brings together two prestigious Italian brands and creates a new force in the international marketplace,” said Armani in the statement. “Through this joint venture, we aim to better respond to the needs of our customers in terms of both product quality and product range.”
Likewise, Zegna expressed great satisfaction in the partnership.
“This is a new and exciting challenge for us, which we will tackle with determination and faith,” he said. “The reputation and high standards of our partner and the strength of this project give us great confidence in the potential for this partnership. We believe that this joint venture will greatly strengthen the two groups.”
Carlo Pambianco, owner of a luxury goods consulting firm here, said the joint venture “makes perfect sense.”
“Ermenegildo Zegna has production experience and know-how, Armani has design and label. It’s a smart partnership,” said Pambianco.
The Giorgio Armani Le Collezioni label was introduced in 1979 with a men’s collection, followed in 1980 by the launch of a women’s collection. At the time, both divisions were produced and distributed under license by GFT. Armani began producing the Le Collezioni women’s line by Antinea, the designer’s wholly owned company, with the fall 2000 collection. The Le Collezioni men’s license will not be renewed with GFT Net after it expires on Dec. 31, 2000, but will be produced by the former GFT plants Armani bought. Both the men’s and women’s divisions are now sold under the Armani Collezioni label as part of the company’s strategy to strengthen the label around the world.
Armani reported wholesale sales of about $222 million for Armani Collezioni. The Armani Collezioni label, which is available in 35 countries around the world, offers a range of tailored ready-to-wear clothing, sportswear, eveningwear, outerwear, furnishings and accessories for men and women.
There are six freestanding Armani Collezioni stores in the world — in Milan, London, Manchester, Madrid, Barcelona and Tokyo. In the U.S., Armani Collezioni is available at main department stores such as Saks Fifth Avenue, Barneys New York, Neiman Marcus and Bergdorf Goodman.
The Ermenegildo Zegna Group reported consolidated sales of $488.5 million (converted from lire at current exchange rates) last year, an 8 percent increase from 1998. The partnership with Armani follows Zegna’s launch of its new Zegna Sport line and the acquisition of Agnona, the women’s fashion and fabrics luxury brand label, last year.
The American market represented 41 percent of total sales in 1999. The group has its own direct network of 263 Ermenegildo Zegna sales points, of which 52 are directly owned. “The first months of the current year have shown good growth on all markets. New directly owned or franchised stores will be inaugurated to achieve the objective of having over 300 stores by the end of 2000,” said Gildo Zegna.
He added that the company plans to develop the Zegna Sport line and open dedicated stores in Miami and Los Angeles. Zegna, founded in 1910, is still a family business and is managed by the fourth generation: Gildo, Paolo, Anna, Laura and Benedetta.