Armani details succession plans

Italian designer Giorgio Armani (centre) at the spring/summer 2018 show at Milan Fashion Week last month.
Italian designer Giorgio Armani (centre) at the spring/summer 2018 show at Milan Fashion Week last month.PHOTO: REUTERS

MILAN • Giorgio Armani does not want his fashion empire to unravel at the seams when he is no longer around.

His succession plans include a transfer of part of his high-end fashion business to his charitable foundation in a bid to prevent any takeovers or a break-up of the group, the designer told a newspaper.

Last year, the 83-year-old created a foundation in his name and said that he planned to lead it for the rest of his life.

With an estimated fortune of close to US$6 billion (S$8 billion), he is still active in what is Italy's second-largest fashion group.

He has not named a successor.

"What has been created is a mechanism that will encourage my heirs to maintain harmony and will avoid the group being bought or broken up," Armani told Corriere della Sera daily in an interview published early this week.

He does not have children.

His nieces, Roberta and Silvana, work at the group while their cousin, Andrea Camerana, recently left but is still a board member.

Long-time assistant Pantaleo Dell'Orco heads the men's lines and sits on the foundation's board.

"Believe me, it is horrendous having to decide what to leave, whether it's fair or not, and every five minutes having to confront the reality of a man to whom something could suddenly happen," he said.

Under his succession plan, the foundation, which already owns 0.1 per cent of the Giorgio Armani holding company, will take a bigger stake, the designer noted.

The remaining shares will be held by his heirs who can sell their holdings only to the foundation.

Management will not be given shares in the group, Armani added.

The veteran designer said last month that the image of his brand might benefit if he picked a successor, who did not necessarily have to be Italian.

But although he added that he would designate three people to succeed him at the foundation, it still remained unclear as to who would replace him at the helm of the Armani group.

Armani said the foundation, which will also be investing in charities, will have the final say in case of hung decisions by the company's board.

After a 5 per cent fall in revenues last year, he added that he expected sales to dip by the same amount this year and next.

However, he predicted a turnaround would come after 2019.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 26, 2017, with the headline 'Armani details succession plans'. Print Edition | Subscribe