What Will Happen To Armani Group In The Face Of Declining Sales?

According to the world clothing shoes and hats net, Giorgio Armani SpA

The group is experiencing its own downturn in the past 42 years.

In 2016, the group's revenue was 2 billion 510 million euros, down 5.2% from 2 billion 650 million euros in 2015, the first decline since 2006.

And the flagship brand of the group is also known as the flagship brand.

The growth rate of the same name brand Giorgio Armani was also the slowest in several years.

In fact, we can see some clues from the previous news. In April this year, the Giorgio Armani Milan plant announced that it will reduce 110 employees, which is responsible for producing Giorgio Armani.

There are 180 employees in the garment industry, and only 70 employees will be laid off after the layoffs.

Armani is currently the second largest luxury goods group in Italy after Prada, and has recently heard news of possible listing.

But within a few years, Armani group is facing a downturn in sales.

What happened to it?

Why do they get bogged down in the mire?

To be honest, in addition to the design we talked about at that time, you can see from the marketing part that Giorgio Armani is not only a designer but also a smart businessman.

The master knows very well that since the name of "Armani" has been heard, how to make use of this name to make money.

So in addition to the flagship brand and the Giorgio Armani of the formal dress style, he later launched a less expensive Emporio Armani than Giorgio Armani and joined the leisure style Emporio Armani, which is priced lower, Armani Exchange mainly aimed at young people, and Armani Collezioni and Armani Collezioni, which are relatively suitable for pricing, but also for sports and leisure. Those brands just mentioned are extending further to the market. On the upwards extension, Giorgio Armani has launched a custom series, "of course," and, of course, home and interior design brands.

By the end of 2015, Armani group has developed a total of 2983 sales outlets in more than 60 countries, including 165 Giorgio Armani, 338 Emporio Armani, 754 Armani Collezioni, 238 AXArmani, 880 Armani Jeans, 198 Armani Junior and 56 Jeans stores.

Some analysts say that it is this multi line strategy that dilutes the attractiveness of Giorgio Armani as a luxury brand. John Hooks, former chairman of Armani group, has also revealed that the rapid expansion of the group in the middle end is one of the reasons why he left in 2011.

The evidence is, of course, a relatively low price. Armani Exchange, which is aimed at young people, announced that it closed most of the UK stores early this year. It even opened in London in 2007 and was then the world's largest Amarni Exchange flagship store.

The situation has come to a bad end: the customers of the main line brand Giorgio Armani do not want to see so many people who simply can not afford Armani wear Armani, and those who should aspire to Armani have lost interest in the brand which has been lacking in innovation for many years.

More like an American brand.

It is true that we have to accept that, but the old man has expanded so many product lines. Now it seems that there are some missteps, but at that time, it was a popular and effective way of making money. After all, Armani is a modern luxury brand. It is different from Hermes or Chanel, or has a royal royal lineage, or has a long story. Armani's business breath is stronger than traditional luxury brands, and it is more like a more commercialized American brand.

In the 80 and 90s of last century, through the authorization of brands to various channels (such as stores, department stores, supermarkets), the launch of different product lines is a practice of many American brands, such as Calvin Klein with CK, CK Calvin Klein, CK Jeans, Calvin Klein Collection and other brands.

Another example is Ralph Lauren. I believe everyone who has been to Ortles has bought at least one Polo Ralph Lauren, which is the most popular product line of Ralph Lauren, and its selling price in Ortles is even less than more than 100 RMB.

Later, Michael Kors and Donna Karan also developed their own secondary lines.

Donna Karan is slightly conservative, only DKNY and DKNY Jeans two lines, and ambition expansion Michael Kors, like Armani's father, has launched Michael Kors Collection, Michael Michael, and a lot of sub lines.

Pierre Cardin, a senior French custom designer, continues to sell trademarks to various product categories today, and even to the Pierre Cardin DVD.

The designer seems to be proud that he has thousands of categories of authorization lines, and there are 200 thousand people around the world who work on Pierre Cardin's trademark.

But look at the list of mainstream luxury brands, and there is no place for Pierre Cardin.

Luxury brands later saw the disadvantages of having too many side lines.

The age has been very different. In the 70 and 80s of last century, the Internet was still underdeveloped. Social media was envisaged, and the degree of pparency of information was not high. The brands could still earn a little bit of money by relying on information asymmetry and asymmetric information. But nowadays, information is so clear that consumers can easily learn about brand information.

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At the same time, globalization not only lets goods circulate, but also people flow. What brands do you wear represent what kind of people you are, so that the brand identity labels are more clear, brand must have a distinct brand image and logo, and too many sub line brands will only obscure the image and logo.

Another important reason is that the popular and affordable sub line brands are facing the embarrassment of having wolves behind them.

In the past ten years, there are light luxury brands such as Sandro, Maje, Pinko and Liu Jo in the mid-range market. The Armani group and Ralph Lauren, which are the main players, are the challenges.

YSL has also gone through the authorized route, up to thousands of items, including cigarettes and slippers.

Later, after being accepted by Kai Yun group, all kinds of empowerment were recovered and focused on making shoes and accessories and accessories.

There is another example, D&G.

Dolce & Gabbana soon closed the second line after taking control of D&G, and the two designers wanted their brands to have only one main brand like Chanel and Dior.

If the main line of Dolce & Gabbana is good enough, there is no need to support the subsidiary line's financial resources.

In 2013, the two lines of CK Calvin Klein and Calvin Klein also merged into the Calvin Klein of the golden character logo, which was cut off a secondary line; the secondary Kors of Michael Kors was also closed, including the Kors Kors, the young vice card, and the Hon.

Burberry Brit, once an independent store, is now sold to Burberry's flagship store with Burberry Prorsum, Burberry Brit and Burberry London.

There are also rumors that Prada is also discussing whether to cut off the Miu Miu brand. If you pay attention to the latest two seasons of these two brands, you will find that these brands are becoming more and more alike.

Now it is finally the turn of Armani group. At the beginning of this year, Armani announced that it will terminate the two sub brands of Armani Collezioni and Armani Jeans, and retain only the top three Giorgio Armani, mid-range Emporio Armani and the lowest priced AX Armani Exchange brand.

Emporio Armani will absorb Armani Collezioni and Armani Jeans, and some Armani Jeans products will also be integrated into Armani style street brand brand Armani Exchange. As for the advanced custom series, the products will be part of the brand.

Who is the heir?

Another important question for Armani group is, who will take over the luxury group?

After all, as the rare founder of the world's luxury brand, Giorgio Armani is more than 80 years old. Although he is still energetic and eyed, he is still the man of the age. It is difficult to adapt himself to the new era of luxury development.

For example, Armani group is very slow in social media contact.

It was not until September 2016 that the group announced that it would set up special accounts for Giorgio Armani, Emporio Armani and Armani Exchange on Facebook, Instagram and Twitter respectively.

In the last century of Armani's rapid development, the commandment everyone knows is that over exposure will only dilute the brand value.

But now the times are different, brands are scrambling to show the brand image and the way of life through social platforms.

Can you tell us that Armani's highly commercialized luxury brand in Italy has failed to catch up with this trend?

We still need Giorgio Armani -- no one knows his brand better than he does, but the strong control of the old man should let go of the young managers to fight freely in the more complex market of competition.

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