After increasing annual revenue last year by 16.5 per cent to €2.35 billion, Armani Group recorded positive growth of 18 per cent across all its sales channels in the first quarter of 2023..

By Joseph Low

There is much to celebrate at Italian luxury group Armani as the fashion house reported strong 2022 and Q1 2023 results as per the press release shared on 25 May. The group’s revenue ended 31 December rose 16.5 per cent to €2.35 billion when compared to 2021, and earnings before tax and interest grew 25 per cent to €289 million. As for the first quarter of 2023, Armani Group recorded positive growth of 18 per cent across all its sales channels.

As owners of Giorgio Armani, Emporio Armani and Armani Exchange, the group joins other companies like LVMH, Kering, Richemont and others in displaying resilience despite global and economic uncertainties like the ongoing conflict between Russia and Ukraine and rising prices. “Notwithstanding a global economic environment that is still characterised by multiple crises, all sales channels registered significant growth in 2022 over 2021,” shared the brand in a press release. A balanced breakdown was observed with “direct retail up 17 per cent, wholesale up 16 per cent, and e-commerce up 9 per cent”.

The group further elaborated that in 2022, its key markets were Europe and America as both were the first to relax public health restrictions and travel was reinstated. Performance on these two continents was up by 24 per cent and 19.5 per cent respectively. In contrast, Asia as a whole saw a decline of 6.3 per cent and the group “[attributed it] to extensive lockdowns and the reintroduction of strict mobility limitations, which in China were only lifted at the beginning of 2023.” Despite the shortfall, its constant focus on service quality has enabled the group to achieve a strong performance that contributed to continuous growth.

“The medium-long term strategic path I have chosen to undertake continues to prove effective as is evidenced in the results: 2022 ended with further growth that has continued into the first quarter of 2023, further solidifying the Group’s soundness,” commented Giorgio Armani, Chairman and CEO of the Armani Group.

“I am firmly convinced that operating with a vision aimed at continuity, following a concrete and consistent approach, centred on the values that have always underpinned my creative and managerial philosophy, is the only way to face the challenges and unforeseen events that characterise the current global scenario.”

“In an increasingly difficult and competitive context, I am proud to have been able to maintain my independence and the stability of the Group, also thanks to the work and commitment of my collaborators and employees.”

On the other hand, in Q1 of 2023, the geographical trends showed a significant shift when compared to 2022. Where most of the growth recorded was from Europe and America, its sales were given an additional boost from Asia. Led by China’s reopening, it reported a 14 per cent growth while Europe climbed 22 per cent and America at only 10 per cent. A slowdown in America has been on the horizon, and other luxury companies have also seen its sales from the region turn sluggish.

Just last week, LVMH’s Bernard Arnault, the world’s richest person, had US$11.2 billion wiped out after concerns about a softening US economy which will dampen demand for luxury goods. A report by Bloomberg said that LVMH’s shares fell 5 per cent, and this was amid a broader decline that erased about US$30 billion from the European luxury market. Across the board, CEOs at different companies have acknowledged US’ declining growth but most are hopeful of China’s post Covid-19 recovery to offset these differences in sales.

In a joint statement, Chief Commercial Officer Giuseppe Marsocci and COO and CFO Daniele Ballestrazzi said: “The adjustment period that followed the decision to reorganise the company’s portfolio by focusing on its three main brands, namely Giorgio Armani, Emporio Armani, and Armani Exchange may be considered concluded on a positive note with highly satisfactory sales levels, corroborated by even better growth trends in operating profitability.”

“In 2022, direct brand turnover — represented by sales of Armani branded products made directly by the group and third-party licensees — reached 4.6 billion euros, with estimated retail sales of over 6.5 billion euros. We are advancing, well ahead of schedule, towards the objectives set for 2025, the year that marks the 50th anniversary of Giorgio Armani.”

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