On Friday, the company won the bid for the rental of a 3,250-square-foot store in the city’s Galleria Vittorio Emanuele II. According to a statement released by the municipality of Milan, the fashion house beat the competition of Prada and Tod’s with an offer of 1.9 million euros a year to secure the 18-year lease of the space, which was formerly occupied by Italian telecommunications firm TIM.
The group already counts a store dedicated to Giorgio Armani accessories in the renowned shopping arcade, but the lease on that unit will expire in 2020. The company said the space will be dedicated to the Giorgio Armani line but has not disclosed which product categories will be available in the store.
The deal for the location came at the end of an auction that saw the offer raised 24 times after a starting price of 670,440 euros. This was the first time the municipality did not operate through a blind auction to sell leases in the arcade, given the unit’s prominent position, which overlooks the central octagon of the gallery.
“This is a virtuous example of how the ability to innovate, introduced by the public administration, in this case represented by the open auction, can bring economic benefits to the city and, consequentially, to its citizens,” commented Roberto Tasca, Milan’s assessor of state property. “The auction’s income will be reinvested in the city, as usual. It’s also pleasing to witness the competition between prominent Italian and international investors that want to secure a presence in the Galleria. This confirms the moment of positive vivacity Milan is living.”
Over the last decade, the shopping arcade has proven to be a cash cow for the municipality. According to media reports, thanks to the auctions, the city of Milan is expected to cash in 40 million euros just from the rents in the Galleria, while in 2011 the income registered was about 8 million euros.
With the latest auction, the Armani Group broke the record amount for an annual rental registered last year, when Sl Luxury Retail srl, which operates Saint Laurent’s retail network in Italy, offered 1 million euros a year for a one-window, 883-square-foot space in the arcade, now showcasing the accessories range of the French label. Back then, the offer resonated in the Italian media as the local Michelin-starred chef Carlo Cracco pays the same amount annually for a 12,034-square-foot space that houses his “Cracco in Galleria” restaurant over three levels.
Also last year, Moncler secured a 8,051-square-foot space located almost at the corner with Piazza Scala that formerly housed the Urban Center, a multimedia venue promoting activities and information about Milan. Earlier this week, the space was unveiled as a Moncler House of Genius pop-up concept store, celebrated with a Vanessa Beecroft performance.
Other luxury companies present in the prominent tourist and shopping destination include Prada, Louis Vuitton, Versace, Gucci and Chanel, which launched a standalone beauty store here last year.