Giorgio Armani’s Death Sparks Uncertainty for Fashion Empire

The fashion world is grappling with uncertainty following the death of Giorgio Armani, who passed away on March 15, 2024, at the age of 91. Known for establishing one of the most iconic fashion brands, his departure raises pressing questions about the future of the company he cherished and led for over five decades. Armani was the sole major shareholder of the brand he co-founded with his late partner Sergio Galeotti in the 1970s. He maintained control over both the creative and managerial facets of the business until his final days.

Armani leaves behind a legacy marked by a relatively stable revenue of €2.3 billion ($NZ4.5 billion) in 2024, despite facing shrinking profits due to a broader industry recession. As he had no children to inherit the business, speculation has surfaced regarding potential successors and the company’s future direction. Marco Ortelli, a fashion analyst, noted, “Could Giorgio Armani be an interesting target? The answer is absolutely yes – it’s one of the most recognised brands in the world.” However, he cautioned that any significant changes or transactions are unlikely in the near term.

Over the years, the brand attracted interest from various parties, including a 2021 proposal from John Elkann, a member of Italy’s prominent Agnelli family, and an approach from luxury brand Gucci when Maurizio Gucci was at the helm. Armani, known for his cautious approach to potential deals, consistently rejected offers that would dilute his control and opted against listing the company on the stock market.

In matters of succession, Armani had begun planning more than a decade ago. He established a foundation in 2016 aimed at “safeguarding the governance” of the Armani Group‘s assets, ensuring they aligned with principles he valued deeply. In an interview with Corriere della Sera in 2017, he expressed the need for a mechanism to help his heirs manage the business and prevent it from being sold or broken apart. The foundation currently holds a symbolic 0.1% stake in the company, but this is anticipated to increase following his death.

As the company prepares for a transition, details regarding Armani’s will are expected to provide clarity on the distribution of power among potential heirs. He is survived by his younger sister Rosanna Armani, along with two nieces and a nephew, all of whom occupy significant roles within the company. The foundation also has designated nominees to oversee its operations.

A Private Farewell and a Day of Mourning

A private funeral service took place on March 18, attended by family, colleagues, and close friends at the church of San Martino in Rivalta, located approximately 100 kilometers southeast of Milan, near his birthplace, Piacenza. Reports suggest that Armani will be cremated, with his ashes interred in a family chapel alongside his parents and older brother. In a sign of respect for the designer, Armani boutiques closed early on the day of his funeral, as Milan and Piacenza held a day of mourning for one of their most esteemed figures.

Even in his final days, Armani was busy preparing for a retrospective exhibition and a fashion show to celebrate the 50 years of his brand during Milan Fashion Week in late September. As of now, there have been no announcements regarding changes to this planned event.

Securing the Future of the Armani Brand

Giorgio Armani had long been focused on ensuring a smooth succession while preserving the company’s independence. His foundation, which he established in 2016, aims to maintain governance consistent with his values. Following his passing, the foundation is expected to receive a larger share of the company alongside other heirs.

In addition to the foundation, Armani drafted new company bylaws effective upon his death. These regulations outline future governance principles for inheritors and call for a cautious approach to acquisitions. The bylaws also mandate that any potential stock market listing requires majority support from directors and can only occur five years after the new regulations take effect.

Commenting on his business philosophy, Armani emphasized the importance of maintaining a relatively small scale compared to industry giants like LVMH and Kering. In a statement released in July, he highlighted investments in meaningful projects, such as the renovation of flagship stores and the development of e-commerce capabilities. Europe accounted for nearly half of the Armani Group‘s revenue, with the Americas and Asia Pacific contributing around one-fifth each.

In a previous interview with the Financial Times, Armani expressed his desire for a gradual transition of responsibilities to his closest collaborators and family. His managerial roles, including those of chairman and CEO, will need to be filled, with potential candidates such as long-time associates Giuseppe Marsocci and Daniele Ballestrazzi. The creative leadership structure may present more complexity, as his niece Silvana Armani worked closely with him on women’s collections, while Pantaleo Dell’Orco collaborated on men’s designs.

As the fashion industry reflects on Armani’s remarkable contributions, the future of the brand he built remains uncertain. The next few weeks are likely to reveal more about his succession plans and the direction in which the Armani Group will move forward.