Giorgio Armani's business booms in China

Celebrations all-round at Giorgio Armani with their latest financial results.

Ahead of his trip to one of the hottest fashion destinations right now, Beijing, Giorgio Armani said China posted a 45 per cent gain in sales last year, which helped increase profitability and revenues of his namesake fashion company in 2011.

WWD reports that in the year ended Dec. 31, Giorgio Armani SpA’s operating profit rose 23.2 per cent to €281.8 million, or $US391.7 million, compared with €228.6 million, or $US301.7 million, the previous year. Sales grew 13.6 per cent to €1.8 billion, or $US2.5 billion, from €1.59 billion, or $€2.11 billion, in 2010. The company, which is privately held by Armani, did not disclose its net profit

Armani, who is also chairman of the Milan-based company, said, “The excellent results achieved in 2011, both in terms of turnover and profit margins, confirm yet again the soundness of the group’s strategies, particularly given the current period of uncertainty.”
Armani also expressed a “clear, balanced industrial strategy aimed at creating positive, long-lasting value,” as much as the “significant support” of the group’s partners.

This year has also kicked off on a positive note, as the group saw a double-digit increase in revenues in the first quarter, both at retail and wholesale. The company plans to pursue expansion in both emerging and mature markets.

“On the basis of these results we look with cautious optimism to 2012 and beyond, and reconfirm our long-term strategic development plans,” said Armani.

Clothing remains the strong product category for the company, accounting for 57 per cent of turnover, whilst perfumes and cosmetics is the second largest, responsible for 26 per cent of sales. Eyewear accounted for 6 per cent of revenues, compared with 7 per cent in 2010. In November, the group said it was not renewing its eyewear license with Safilo and returning to Luxottica for a 10-year agreement for the production and distribution of eyewear for the Giorgio Armani, Emporio Armani and A|X brands, beginning in January.

Geographically, Europe excluding Italy was the biggest market for the group, accounting for 31 per cent of sales, versus 33 per cent the previous year, followed by North America, representing 23 per cent of revenues, up from 22 per cent in 2010. The Far East accounted for 18 per cent of sales, compared with 17 per cent the previous year.

Sales in directly operated stores grew 10 per cent, lifted by gains in established markets, such as Europe, despite the unfavourable economic context, and in the U.S.

Asia also showed strong growth, boosted by a 45 per cent jump in sales in China. The designer, whose first signature boutique opened in Beijing in 1998, has an established business in the region. Today, there are 289 group stores in 50 cities in Greater China, including 16 Giorgio Armani, 62 Emporio Armani, 60 Armani Collezioni, 60 AJ Armani Jeans, one AJ Armani Jeans Accessories, 15 Armani Junior, 39 A|X Armani Exchange and nine Armani Casa.

Globally, there are 751 group stores in 46 countries, of which 89 are Giorgio Armani boutiques.

Image credit: forbes.com

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