mainly as a result of his successful blending of the delicate combination of
creativity and commercial know-how. As a fashion designer and business-
man, Giorgio Armani has earned a pristine reputation worldwide. He has
been heralded as ‘The Indispensable’, ‘The King of the Catwalk’, ‘The
Fashion Maestro’ and ‘The Most Fabulous Italian Miracle’, by the interna-
tional press.
The Giorgio Armani brand (Figure 10.1) has retained unparalleled prof-
itable status in the 32 years of its existence. In the first half of 2004, the
group sales turnover was €644m, a year-on-year increase of 8 per cent. Its
pre-tax profits for the same period was €89m, a year-on-year increase of 23
per cent. Recent financial records of the company shows that it has zero
debts. Also, at the end of 2000, which was a boom year for the luxury sector,
the company had $300 million in its cash reserves. The brand also made its
debut on the annual Interbrand/Businessweek Top 100 Global Brands
Scoreboard in 2004 with a brand value of US$2.613 billion. This value
increased by 2 per cent in 2005, to US$2.677 billion and again by 4 per cent
to US$2.783 billion in 2006. The brand value represents the intangible asset
worth that the company accrues as a result of its brand. The brand value
figure is an intangible asset that is represented minus other company assets.
The company operates 300 boutiques worldwide and employs a staff of
4,800 people.
The achievements of the brand are remarkable particularly as it is fully
owned by one man, Giorgio Armani. In an industry that has gravitated
towards acquisitions and conglomerates, the Armani brand is an exception in
leadership and brand style.
chapter 10 279case illustrationsFigure 10.1 The Armani brand portfolio
Giorgio Armani Emporio ArmaniArmani Collezioni Armani jeans Armani CasaArmani Exchange Armani Junior