“I decided to create the Giorgio Armani Foundation in order to implement projects of public and social interest,” said Armani. “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.
“These founding principles are based upon: autonomy and independence, an ethical approach to management with integrity and honesty, attention to innovation and excellence, an absolute priority to the continuous development of the Armani brand sustained by appropriate investments, prudent and balanced financial management, limited recourse to debt and a careful approach to acquisitions,” he added.
In 2012, speculation was that the designer would decide how to appoint members of the board in way that would be fixed in time and that he would place the company’s shares into a foundation. Without a hereditary successor, the foundation’s administrators would call the shots.
A few days ahead of Friday’s announcement, images of Armani, 82, sailing off the coast of Formentera, Spain, were posted on Instagram.
Asked about his decision to opt for a foundation, Prof. Dr. Stefano Grilli, partner in the tax department at legal firm Gianni, Origoni, Grippo, Cappelli & Partners, explained that, since the designer has no children, he would have to designate heirs in his will and those heirs could also inherit shares in the fashion group.
“One thing is to manage a company, the other is to own it,” said Grilli. “With ownership, there is an ethical and social responsibility toward employees, and the foundation would allow to protect the employees from any strange idea the heirs could have [in regards to the company].”
Grilli said a foundation is fiscally equivalent to a trust, which would designate the managers based on criteria defined by Armani himself. In addition, the foundation would channel resources from dividends at the Armani company into philanthropic and social projects.
“The Armani Group would have no owner, and the Armani Foundation would have no owner. Shares of the Armani Group would be part of the foundation’s assets,” Grilli observed. The foundation would allow the Armani Group to continue to “live on, be prosperous and employ workers. It would protect the company from possible quarrels among heirs, who could also decide to sell the company to cash out.”
Armani isn’t the first luxury or designer brand to establish a foundation. Rolex founder Hans Wilsdorf set up a trust in 1944 after the death of his wife and called it the Hans Wilsdorf Foundation, placing his shares in the luxury watch firm in the trust. The objective of the trust is to perpetuate the company, although it also has a mandate for charity work. It is understood the foundation’s trustees are “custodians” and not owners or shareholders, and they decide how to reinvest the profits, and hire or fire managers.
Two years ago, asked about the company being a potential acquisition target, Giorgio Armani said: “My name always pops us but it’s because my situation is curious and unique. I myself am curious. In the end, this is a small family and there is a group of people that are like family. The company is a family one. I don’t know if there will be a corresponding [situation after me].”
adapted from WWD
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