Case illustration 1 the Armani brand extension success story

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The brand Giorgio Armani is considered to be Italy's most glamorous luxury brand. The founder and designer of the brand, Giorgio Armani, is also widely viewed as one of the most talented fashion designers in the world. He is the source of much of the brand's allure and intrigue. His personality and disposition in addition to his creative talent and business acumen have contributed to establishing the Armani brand as a global fashion empire and one of the most valuable brands in the world. Giorgio Armani is also one of only a handful of fashion designers with full control of their companies. This is

Giorgio Armani

Emporio Armani

Armani Exchange

Armani Junior

Giorgio Armani

Emporio Armani

Armani Exchange

Armani Junior

Armani Brand Extension

Figure 10.1 The Armani brand portfolio

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Figure 10.1 The Armani brand portfolio mainly as a result of his successful blending of the delicate combination of creativity and commercial know-how. As a fashion designer and businessman, 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 international press.

The Giorgio Armani brand (Figure 10.1) has retained unparalleled profitable 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.

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100 Fashion Tips

100 Fashion Tips

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