Giorgio Armani founded one of the best -known fashion brands in the world in the last five decades and his death inevitably raises questions about the future of an Italian company whose independence appreciated.
Giorgio Armani, who died this Thursday at age 91, was the only majority shareholder of the company he founded together with his late partner Sergio Galeotti in the 70s and on which he maintained a iron control – both in the creative aspects such as those of management – until the end.
He did not leave children that inherited the business, which generated relatively stable income of 2.3 billion euros (2,700 million dollars) in 2024, but whose profits had been reduced in the middle of a large recession of the sector.
Despite the deceleration, the company is still extremely attractive, they say experts in the sector such as Mario Ortelli, director of the Ortelli & Co luxury advisory firm.
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“Could Giorgio Armani be an interesting objective? The answer is flatly yes: it is one of the most recognized brands in the world, with a clear and unique stylistic vision,” said Ortelli, adding, however, that an agreement in the medium term would be unlikely.
Over the years, the manufacturer of the popular unstructured costumes received several proposals, including one in 2021 by John Elkann, descendant of the Italian family Agnelli, and another of the Gucci luxury brand, when Maurizio Gucci was still in charge.
Armani, who according to experts in the sector was especially cautious about his French rivals, repeatedly ruled out any possible agreement that would have diluted his control and refused to quote his group on the stock market.
He implemented measures to guarantee the continuity and independence of his business, which he directed with confidence relatives and a network of colleagues of many years.
His younger sister, Rosanna, two nieces, Silvana and Roberta, and a nephew, Andrea Camerana survive. Both they and their nephew play important roles in the group. His right hand, Dell’orco Pants, is also considered a family member, and the five are possible heirs.
It is possible that in the coming weeks, when Armani’s will opens, greater clarity arises over his plans.
Ensure your legacy through a foundation
Giorgio Armani began thinking about a plan to guarantee a fluid succession and conserve the independence of the company more than a decade ago, which led him to create a foundation in 2016.
His declared objective was to “safeguard the governance” of the assets of the Armani group and ensure that they were consistent with the principles that were “particularly important” for him.
In 2017, the designer declared the Italian newspaper Corriere Della, it would be necessary for a mechanism of this type to help his heirs to get along and prevent the group from being bought by others or dissolved.
The Foundation currently has a symbolic participation of 0.1% in the Milanese group, but after its death it was expected to obtain a greater participation, along with the other heirs, he said in the same interview.
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He also said that three candidates that he had designated would direct the Foundation.
Armani also drafted new statutes of the company that will enter into force after his death and describe the future guiding principles that will govern the group.
The statutes demand a cautious approach to the acquisitions and divide the company’s share capital into several categories with different voting rights and faculties. The document does not clarify how the different shareholders will be distributed.
They also point out that any potential contribution in stocks would require the support of most directors and could only take place “after the fifth year following the entry into force of this statute.”
Small but beautiful
When commenting on the previous financial results, Giorgio Armani stressed his determination to continue developing a business that is relatively small in a scale compared to the French giant LVMH and other rivals such as Kering, owner of Gucci and the Italian luxury house Prada.
“In any case, I have chosen to invest in projects of great symbolic and practical transcendence, fundamental to the future of the company,” he said in the July declaration.
These investments included the renewal of flagship stores such as their Madison Avenue building in New York and Emporio Armani in Milan, as well as spending in the new Palazzo Armani in Paris and the internal management of electronic commerce.
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Europe generates almost half of the revenues of the Armani group, a proportion much greater than that of other luxury brands, while America and Pacific Asia represent around a fifth each.
The group had 570 million euros of net cash in the late 2024 after intensifying investments.
Armani’s lieutenants could take a step forward
In his last interview with Financial Times, Giorgio Armani said he wanted a gradual transfer to his closest collaborators and his family.
“My succession plans consist of a gradual transition of the responsibilities that I have always handled to the people closest to me … as Leo Dell’orco, the members of my family and the entire work team,” he told the ft to spend it to the FT.
At the managerial level, the group will need to cover the roles of president and CEO occupied by Giorgio Armani himself, with long -experience veterans such as Giuseppe Marsocci and Daniele Ballestrazzi among the possible options.
Choosing the appropriate creative structure can be more complicated.
Armani’s niece, Silvana, worked with her uncle in the design of the women’s collections, while Dell’orco collaborated with him in the male collections.
“Will the company have a single creative director? Or will there be several creative leaders or specific directors of each line? This is something that Giorgio Armani has probably already delineated in the guidelines that the Foundation will implement,” said Ortelli.
With Reuters information
