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Giorgio Armani added a few more numbers to the uptick in luxury Friday as his company released financial data showing net profits and earnings before interest and taxes each rose around 7 percent for 2002, and overall profitability soared 14 percent over the past five years. And Armani is continuing with his retail renovation and expansion plans, a sign of his confidence that the appetite for luxury product shows no signs of abating.
In Armani’s opinion, “there are no shortcuts to success.”
In publishing his company’s 2002 annual report, which confirms preliminary financial data released in April, Armani said this “holds true more than ever before.” In the report, Armani cited “a disciplined approach to growth,” vertical integration and cost-cutting as his guidelines, and expressed his pride in the group’s results, which, he said, “show an increase in all profitability indicators and have led to a compound annual growth rate of 14 percent over the last five years.”
In 2002, the company reported a 7.1 percent growth in net profit to $133.9 million, or 117.4 million euros, from $125 million, or 109.6 million euros, the previous year. EBIT grew 7.2 percent to $211.4 million, or 185.3 million euros, from $197.1 million, or 172.8 million euros, the year before. As reported, sales advanced 2.3 percent to $1.4 billion, or 1.3 billion euros, compared with 2001. Dollars are converted from euros at current exchange.
The report said the designer sits on a potential cash pile of $1.3 billion, or 1.2 billion euros. In addition to the company’s net financial position, amounting to $121.2 million, or 106.3 million euros, Armani can rely on financial reserves of $729 million, or 639 million euros, real estate assets and other properties totaling about $536.2 million, or 470 million euros.
In a separate development, a company spokesman said Armani is extending the Emporio Armani reach through distribution in selected, high-end department stores — a new direction for the designer, whose strategy until now for this line was to sell only through freestanding, branded boutiques. The first step is to open a corner in Paris at the Printemps store in spring 2004. That said, the designer also will inaugurate a two-story, 10,800-square-foot Emporio store in Munich, Germany, in December. Modeled on the Milan Via Manzoni megastore here, the boutique will sell the Emporio and Jeans lines, and includes a café, a bookstore and a flower shop.