One year after founder's death, Armani needs to find a new fit

One year after the death of Giorgio Armani, the Italian fashion house finds itself at a critical juncture. The company spent the past year focused on governance, with Armani stipulating in his will that a first stake sale of around 15 percent should occur between 12 and 18 months after his passing, followed by the potential disposal of a larger stake or a listing on the stock exchange.

Industry experts warn that as the year progresses, the heir and advisers of the late designer must now shift their focus to evolve the brand to ensure its relevance.

Francesco Fiorese, a partner at consultancy Simon Kucher, suggests that while continuity is wise in the initial year, turning it into inertia could become a risk. The real challenge for the company will be transitioning from a succession model based on Armani's legacy to an autonomous system capable of making its own decisions while preserving the brand's identity.

Sales have declined by 2.8 percent at constant currencies to €2.2 billion over the last year, casting caution among investors about the health of the luxury sector amid geopolitical tensions and faltering Chinese consumer spending. CEO Giuseppe Marsocci, who took the helm, announced in July that Armani would not pursue short-term fixes, remaining committed to the founder's vision of essential and elegant style with meticulous attention to detail.

The fashion house is exploring a joint venture to develop new Armani Hotels & Resorts, indicating future strategic moves. Armani's will lists France's LVMH, licensees EssilorLuxottica and L'Oréal as potential buyers or another comparable luxury group. The company holds €500 million in net cash at the end of 2025, and there is no pressure to finalize a sale, as the deadlines set in Armani's will are not strictly binding. The valuation of the group is estimated between €5 billion and €7 billion.