Giorgio Armani Asia suffers in China
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Italian fashion house Giorgio Armani Asia is the latest luxury retailer to cite greater China as the cause of a downturn in sales.
Burberry and Hugo Boss have also been hit by China’s economic slowdown, leading to Hugo Boss cutting its prices in Asia.
Armani says revenues grew 4.5 per cent last year, a 16 per cent drop from the year before. Revenues totalled €2.65 billion (US$ 2.95 billion). Prada had sales of €3.55 billion.
The Milan-based group, whose products include accessories, cosmetics and furniture, and the more affordable Armani Exchange range, says earnings before interest, tax, depreciation and amortisation edged up 1 per cent to €513 million last year, from €507 million in 2014.
Despite the slowdown, the firm says its cash reserves of €640 million allowed it to step up investments in its brands to “further strengthen its competitive market position”.
“These results are the outcome of an attentive diversification policy for the group’s lines, paired with the co-ordination of distribution channels and enhancement of the role that our trade partners play,” says president Giorgio Armani, who founded the company in 1975. The 81-year-old designer is still actively involved in the business.
Questions & Answers
Q.Which other luxury retailers have also been affected by the economic slowdown in China?
Which other luxury retailers have also been affected by the economic slowdown in China?
Burberry and Hugo Boss have also experienced a downturn due to China's economic situation. Hugo Boss has responded by reducing its prices in the Asian market.
Q.How did Giorgio Armani's revenues change last year compared to the previous year?
How did Giorgio Armani's revenues change last year compared to the previous year?
Giorgio Armani's revenues grew by 4.5 per cent last year, which represents a 16 per cent drop compared to the growth rate from the year before.
Q.What initiatives did Giorgio Armani undertake despite the challenging market conditions?
What initiatives did Giorgio Armani undertake despite the challenging market conditions?
Despite the slowdown, the company used its cash reserves of €640 million to increase investments in its brands. This was done to strengthen its competitive position in the market.
Q.What was the total revenue for Giorgio Armani last year, and how does this compare to Prada?
What was the total revenue for Giorgio Armani last year, and how does this compare to Prada?
Giorgio Armani's total revenues last year were €2.65 billion (US$2.95 billion). In comparison, Prada's sales reached a higher figure of €3.55 billion.
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