Updated at 4:16 p.m. ET Sept. 12
MILAN — Now that the late designer Giorgio Armani‘s wills have been released, three of the companies that have long been mooted as potential buyers of his company, and that he mentioned himself in his wills — LVMH Moët Hennessy Louis Vuitton, L’Oréal and EssilorLuxottica — have issued statements praising the brand, and potentially setting up an eventual bidding battle for one of fashion’s iconic labels.
“Giorgio Armani honored LVMH by naming us as a potential partner for the exceptional fashion house he built,” said Bernard Arnault, chairman and chief executive officer of LVMH. “I am a great admirer of his talent. Giorgio Armani, whom I had the pleasure of knowing personally, was a true genius; the only great couturier, along with Christian Dior, who built and led a global brand in terms of both style and industry. If we were to work together in the future, LVMH would be committed to further strengthening its presence and leadership around the world.”
Asked for a comment, EssilorLuxottica said: “We are proud of the trust that Mr. Armani has placed in our group and in our management. We will carefully evaluate, together with the board, this evolutionary prospect, which deserves thorough consideration in light of the deep ties that already unite the two groups.”
L’Oréal in a statement said that “for almost 40 years, together with Mr. Armani, we have built one of the most beautiful and iconic beauty brands in the world. We are touched and honored that Mr. Armani considered L’Oréal to acquire a stake in his beautiful company. We will study, with great consideration, this opportunity building on our long-shared history.”
Giorgio Armani left not one but two wills, one dated March 15 and the other April 5.
They were made public on Friday morning on several media outlets. Accordingly, Armani, who died on Sept. 4 at 91, decided that his namesake foundation will manage the fashion group.
After 12 months from the opening of the will and within 18 months at the most, an initial 15 percent of the his namesake company could be sold to either LVMH, EssilorLuxottica or L’Oréal, according to the wills.
Armani does not rule out other companies besides LVMH, EssilorLuxottica or L’Oréal as potential buyers, as long as they are operating in the world of fashion and luxury and of equal standing.
Between the third and fifth year, the foundation and the heirs could choose to sell a stake of between 30 and 54.9 percent to the same buyer of the first group of shares, or in five years and within eight, to consider a public listing in Italy as a priority but also on other markets of equal standing. Even following the potential listing, the foundation would keep a 30.1 percent stake of the group to ensure its control.
Pantaleo Dell’Orco, known as Leo, Armani’s longtime partner in charge of the men’s division, has a key role with 40 percent of voting shares.
Dell’Orco is part of the tight-knit circle of friends and collaborators that Armani called family. The designer’s closest relatives include his nephew Andrea Camerana, the son of Armani’s sister Rosanna, who also works in the company, and Roberta Armani, who is the daughter of the designer’s late brother, Sergio, and who has been in charge of the group’s celebrity relations for years, often acting as Armani’s deputy on social occasions around the world as the face of the company. Her sister Silvana is part of the design team.
More specifically, the Giorgio Armani Foundation has 10 percent of shares and 90 percent of bare ownership of the shares. Life tenancy is assigned to Dell’Orco with a 30 percent stake and 15 percent each to Camerana, Roberta, Silvana and Rosanna Armani.
As for the governance of the foundation, Camerana takes his seat on the board succeeding Armani, with Dell’Orco and Irving Bellotti, partner of Rothschild & Co. Notary Elena Terrenghi, whose studio opened the will, is now also on the board. Roberta and Silvana Armani are also indicated as part of the Surveillance Committee to operate along Armani’s guidelines.
The Armani company stated it did “not consider it appropriate to comment on choices that pertain strictly to the private sphere.”
Such details appeared in the will detailing Armani’s personal properties. It shows 75 percent of a company called L’Immobiliare Srl, comprising the real estate properties in Saint-Tropez, Antigua, and Broni and Pantelleria, Italy, is destined to his sister and 25 percent as bare ownership to Andrea Camerana and Silvana Armani.
Dell’Orco was left a life tenancy of the Via Borgonuovo palazzo in Milan, where the designer lived and there is a mention of a Matisse painting, an Andy Warhol portrait of the designer and a Rayman photo.
Separately from L’Immobiliare, the bare ownership of the Saint Moritz home was left to Camerana and the life tenancy to Dell’Orco, who also inherits one of the two New York apartments.
Armani’s stake of almost 2 percent in EssilorLuxottica goes to Dell’Orco (40 percent) and to his family (60 percent).
There is also a provision of 480,000 euros for designer Graeme Black, who worked with Armani early on in his career, in addition to shares left to executives, collaborators and friends including Michele Morselli, Daniele Ballestrazzi, Giuseppe Marsocci, Laura Tadini and Luca Pastorelli.
The designer revealed details about the future of his company for the first time in 2016, confirming he had established the long-rumored Giorgio Armani Foundation, which, while aiming to fund social projects, also ensured that his fashion group would live on.
Never leaving anything to chance, Armani carefully detailed the foundation’s guidelines in his will.
The foundation is expected to ensure that the activities will be managed “ethically, with moral integrity and correctly.”
The priority is to continue to develop the Armani name at a global level and abide by a “careful diversification strategy and segmentation of the different company brands maintaining consistency in design, image, product and communication.” It is expected to stay true to “an essential modern, elegant and not ostentatious style with attention to detail and fit,” paying “attention to innovation, product excellence, quality and research.” The approach to acquisitions must be “cautious” and “aimed solely at the development of competences that do not exist internally from a market point of view, by product or channel.” The level of investments should be maintained adequate “for the continuous development of the brands,” and financial management should be “balanced” with limited access to debt. Finally, profits should be adequately reinvested in the company with the goal to support cash generation in time.
Later on Friday, the executive committee of the Armani company issued a statement underscoring that “it is immediately clear” that the designer’s “intention to safeguard strategic continuity, corporate cohesion and financial stability for long-term development is confirmed at every stage, in line with what he had repeatedly shared with the press and his closest collaborators.”
While “all short- and medium-term strategic decisions” will be taken by Dell’Orco and the family, supported by the foundation, the statement highlights that “these decisions were guided by Mr. Armani himself, both in terms of the brand’s mission and in possible actions with implications for the group’s medium- and long-term structure. In this light, the will makes reference to a stock market listing as well as the opening to a minority partner of recognized standing and genuine interest in the brand. The responsibility for decisions and management of this process will remain with Mr. Dell’Orco and the family, under the guidance of the fondazione, but always within the principles and rules defined by Mr. Armani.”
The foundation’s first duty will be to propose the name of the new CEO.
“In the coming days, with a thorough reading of the documents and the publication of the company’s new Articles of Association, the remaining details of Mr. Armani’s wishes will be clarified,” concluded the statement. “However, even now, we affirm, also on behalf of employees and collaborators, our commitment to supporting this path in full respect of his wishes, united by the shared goal of securing the best possible future for the company and the brand, in accordance with the principles he established.”
Back in 2016, Armani explained that he decided to create the foundation “in order to implement projects of public and social interest. The foundation will also safeguard the governance assets of the Armani Group and ensure that these assets are kept stable over time, in respect of and consistent with some principles that are particularly important to me and that have always inspired my activities as a designer and an entrepreneur.”
While vocal over the years about his aversion to sell, take on a business partner or publicly list the company, rumors about Armani contemplating forming a foundation first emerged in 2012. The foundation reflected a key priority for Armani — independence, which he sought to maintain over the years, especially since 2000 when rumors about a possible sale to LVMH Moët Hennessy Louis Vuitton or the-then Gucci Group and L’Oréal swirled around the fashion house.
— With contributions from Jennifer Weil (Paris)
