After Sofia (Bulgaria), Giorgio Armani SpA, announced early this week the closure of its Emporio Armani store in Buenos Aires, the only Armani store in the Argetinian capital. The series of difficulties seems to multiply for the Italian group, especially due to its excessive diversification of its brand, from mobile phones, flowers, cafes to hotels. Recently, even its hotel arm partnered with Dubai based giant Emaar is experiencing major delays in the advanced projects of Armani Hotel Dubai and Armani Hotel Manzoni (Milan).
We believe the Armani group should re-think its entire strategy of the difussion lines, especially considering the impact these lines have on the Armani brand overall. The excessive low quality products made in China labelled Armani Jeans, Emporio Armani or Armani Exchange are to be blamed for the current crisis facing the group. Some Armani labelled products are made in the same factories as H&M and Zara, at the same quality standard, yet the latter are 30% to 40% cheaper than the Armani products.
An emphasis on its first line (Giorgio Armani) and the Armani Prive lines would be able to reshuffle the current image of the brand. We would even agree with many who believe the Italian brand should cease some of the difussion lines and even the troubled Armani Collezioni line and focus on its core assets – exceptional design and quality products made in Italy.
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