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Armani Conquers China, Chastises the Pope June 01st, 2012 @ 11:53 AM



 
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Armani Scores 23% Rise in 2005 Profits; Sales Gain 10%

Godfrey Deeny
September 05th, 2006 @ 00:34 AM

Terming 2005 “a record year,” Giorgio Armani, president of the fashion empire bearing his own name, trumpeted a hefty 22.7% increase in net profit for the 12 months of that year.

For the year ending Dec. 31, the company, which is fully owned by Armani himself, scored net profit of 154.8 million euros, or $196.5 million at current exchange rates.

The results “confirm the efficacy of our strategy of creating a diversified portfolio of fashion labels using the name Armani,” the designer said in a letter from the president released this week with his house’s annual report.

Net profit was bumped up by 39.8 million euros, or $50.5 million, in extraordinary income from real estate and stock market deals, yet the results underlined that Armani is easily the most profitable designer label in Europe today.

Giorgio highlighted the launch of the couture line Giorgio Armani Privé and the late 2005 signing of a new joint venture to globally build the A|X Armani Exchange division. In a classic example of Armani’s mass with class strategy, these deals alternatively moved the Italian designer into the rarefied world of haute couture, and accelerated his drive into the mass teenager market.

Introducing the Giorgio Armani Privé couture label and inking the new A|X Armani Exchange joint venture “effectively closed the circle on our unique multi-brand approach, so that we are now able to reach all levels of the marketplace with carefully differentiated lifestyle fashion collections under the Armani master brand," the designer said in his president’s letter.

His company’s operating profit and turnover figures hewed closely to provisional figures released this spring. Earnings before interest and taxes grew 17% to 191.4 million euros, or $243 million, while total sales rose 10% to 1.43 billion euros, or $1.82 billion.

The house’s bottom-line was improved by a real estate deal where Armani sold 49 percent of ManzoniUno, the company owning his giant Via Manzoni flagship, to another firm controlled by the designer, producing a gain of 18.4 million euros, or $23.4 million.

The Armani company also netted 21.1 million euro ($26.8 million) from the sale of its 1.5 percent stake in the giant Italian eyewear company Safilo.

Armani did not release any figures for the opening six months of 2006, but spokespeople indicated that the house had notched a double-figured percentage sales increase.

The annual reports also made clear how bullish Armani is about the future. In 2005, his fashion house invested a whopping of 104 million euros, or $132 million mainly on store openings and renovations, expanding production facilities. Armani also spent 67 million euros, or $89 million, on advertising, promotion and fashion shows, an 8% increase on 2004. And, the designer spent 36 million euros, or $45 million opening 41 stores and renovating 22 existing boutiques.

Defining A|X Armani Exchange as “fast fashion,” where collections are continually updated and replenished in stores, Armani said he plans to double the size of the 96-store strong A|X Armani Exchange chain over the next three years.

Along with partners, Christina Ong and her husband, Ong Beng Seng, Giorgio intends accelerating A|X Armani Exchange’s presence in key markets like the UK, China, Japan and the Middle East.

His home decor division Armani/Casa notched a 40% rise in sales to 30 million Euros, or $38.1 million, at retail, as he opened 30 new sales points, bringing the global network to 75, of which 23 are stand alone stores and 52 shop-in-shops.

“Today there is no other company in our sector who has done anything like this in this important area of modern lifestyle,” he bragged.

Moreover, Armani stressed that worldwide his company had opened over 270 new sales points, boosting the global reach to some 1,270.

His next big project is teaming up with Bobby Shriver and Bono in RED, their project to raise funds to fight against AIDS, tuberculosis and malaria in Africa.

Armani plans to present various RED products in a giant gala catwalk show featuring several of his key lines on Sept. 21 in London during this month’s British fashion season.

“It’s a simple but powerful initiative to unite global brands for a charity. I really hope that in the coming years through Emporio Armani RED we will succeed in making our contribution to the growth in awareness and the gathering of funds for this vital cause,” Armani stressed.

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