Giorgio Armani - The Businessman, the Designer and the Brand

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Case Details:

Case Code : LDEN033
Case Length : 09 Pages
Period : 1970-2004
Pub Date : 2005
Teaching Note : Available
Organization : Giorgio Armani
Industry : Fashion
Countries : Italy

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Giorgio Armani - Superstar Contd...

The house had been steadily profitable since it was set up in 1975. It was also one of the few stand-alone fashion houses in an industry moving toward huge multi-brand luxury conglomerates. Armani's fashion house had long resisted bids from bigger institutions like Mot Hennessy Louis Vuitton (LVMH) and Gucci, who were eager to add the profitable brand to their portfolios. In addition, Armani was one of the rare cases where a designer was also involved with the business side of his enterprise.

The Beginnings

Born on July 11, 1934, in the small northern Italian town of Piacenza, Armani had a difficult childhood, growing up as he did during the Second World War. He initially aspired to become a doctor and in pursuit of his childhood ambition, he attended two years of medical school at the University of Bologna near Milan.However, he soon found that he was not cut out for the medical profession - the sight of blood sickened him. In 1953, he was called to fulfill his military obligations where, because of his medical training, he was assigned to the infirmary. His work at the infirmary cemented his decision of dropping out of the medical line.

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Because he was often alone in the infirmary, Armani spent a lot of time polishing his painting skills (which stood him in good stead when he became a designer). After completing his military service in 1954, Armani joined La Rinescente, Milan's largest department store, as a window dresser. He was later promoted as a buyer, in which capacity he made regular trips to London, where he sharpened his sense of style and fashion.

In the early 1960s, he joined Nino Cerruti (Cerruti), a prominent fashion designer, as an assistant designer for his men's wear brand, Hitman. Over the next few years, Armani took up freelance work for several clothing companies (while still in Cerruti's employment). He even did some designing for top fashion houses Ungaro and Zegna. The turning point in Armani's life came in 1966, when he met architect Sergio Galeotti (Galeotti). Galeotti had immense confidence in Armani's talents as a designer and encouraged him to set up his own label. Eventually, in 1970, Armani left Cerruti and established his own freelance business. He brought out his first line of men's wear under his own name in 1974. 

The designs became so popular that he officially launched his own label, Giorgio Armani, in 1975 with the setting up of Giorgio Armani SpA in Milan. Giorgio Armani SpA was set up with an investment of $100,000, part of which was raised by selling Armani's Volkswagen car. In the mid-1970s, a greater number of women began entering the work force and Armani was quick to tap this market. In 1975, he brought out a women's wear line using men's fabrics, and this proved to be a huge hit. Analysts later said that he was the pioneer of power dressing for women.



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