Italian fashion house Armani is set for a phased sale following the wishes of its founder, Giorgio Armani, who passed away in September. His will stipulates that heirs sell a 15 percent stake in the company within 18 months.
Between three and five years after Armani’s death, an additional 30 to 54.9 percent will be sold to the same buyer. Alternatively, the will suggests pursuing an initial public offering in Italy or another equivalent stock exchange.
Preferred Buyers Identified
Priority as potential buyers will be given to luxury goods conglomerate LVMH, home to brands including Louis Vuitton, Christian Dior Couture, Fendi, and Celine, with L’Oreal, the cosmetics giant, and eyewear manufacturer EssilorLuxottica – known for brands like Ray-Ban – as alternative options. Armani maintained business relationships with these companies, according to the will.
The new leadership now faces the challenge of revitalizing a fading luxury brand amid a market downturn while as well securing a respectable valuation during a sale, as recently reported by the Economist. The situation highlights the pressures facing established luxury brands in a shifting consumer landscape.
Board Divided on Future Strategy
A division has already emerged within the company’s board. Some members are determined to precisely execute the designer’s will, while others advocate for focusing on the company’s turnaround. This decision will likely shape the future of the luxury brand.
Financial figures released shortly before Armani’s death revealed a 6 percent decrease in revenue for 2024, coupled with a 24 percent drop in operating profit (before depreciation). “The power of the brand will diminish if nothing is done,” warned Flavio Cereda-Parini of GAM, an asset manager. “The clock is ticking.”
