Armani reports “better performance” than forecast in 2019
Italian fashion group Giorgio Armani has reported a return to growth in 2019, a year in advance following the rollout of its strategic plan to upgrade its brand portfolio and streamline its distribution network.
In 2019, the Armani Group reported consolidated net earnings totalling 124 million euros on net sales revenue of 2,158 million euros, up 2.3 percent. This result made it possible for the Group to achieve the goal of returning to revenue growth a year in advance of its plan.
This was in part due to the positive performance of comparable sales, which were up 7 percent compared to the previous reporting period, in the directly managed store and e-commerce network, after a three-year period of planned overall turnover reduction as part of a strategy to streamline and upgrade the brand portfolio and distribution network.
Overall 2019 revenues, including licences, rose by 9 percent to 4.157 billion euros.
Earnings before tax declined around 12 percent to 175 million euros and net earnings totalled 124 million euros.
Armani group sales rise in 2019
The strategy, announced in 2017, to operate under just three labels, Giorgio Armani, Emporio Armani and A|X Armani Exchange brands, and integrating and merging diffusion lines, including Armani Collezioni and Armani Jeans into the Emporio Armani and A|X Armani Exchange lines, has resulted in a “better performance” than it forecast, added the company.
In addition, the Armani Group, significantly reduced and selected the wholesale distribution network from a qualitative standpoint, expanded the direct distribution network through the acquisition of points of sale in a number of Chinese provinces (mainly Guangdong and Sichuan), in Macao SAR and in Mexico. At the end of 2019, the number of directly managed stores totalled 598, an increase of around 70 compared to the end of 2018.
With a view to supporting the next relaunch phase, the Armani Group added that it has already implemented investments totalling 105.5 million euros in 2019, in line with the 2018 level of 105.7 million euros.
The group also reported that it has strong liquidity of 1.2 billion euros at the end of last year compared to 1.3 billion in 2018, as a result of greater investment in working capital represented by collection and store renewal projects and by the stock of goods offered in the group's broader network of directly managed stores.
With regards to the ongoing coronavirus crisis, the luxury group said that it was not yet possible to accurately estimate the ultimate economic impact of the Covid-19 pandemic, while adding that it has “both the resources and a solid capital and financial structure” to enable it to cope with uncertainties.
Image: courtesy of the Armani Group