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Giorgio Armani, the king of timeless elegance and founder of one of Italy’s last remaining independent fashion brands, denied on Friday that he was in talks to hire the French designer Hedi Slimane.

Slimane left Celine last month after more than doubling the French label’s sales to €2.5 billion – roughly the size of Armani’s fashion business. In the past few weeks, there has been speculation that Armani, who turned 90 in July, could be preparing to pass the design baton to Slimane.

Several industry sources said Slimane was looking to buy a flat in Milan and this fuelled rumors that he could be preparing to join Armani. Although Slimane’s record is strong and he is seen as a good fit, Armani denied it was talking to the French designer.

“These are unfounded rumors,” a spokeswoman for Armani told Miss Tweed in an email.

Several senior industry sources said this week they heard there had been talks between Slimane and Armani and this made sense.

Like Armani, Slimane’s fashion involves a lot of tailoring and black and white. No matter how talented Giorgio Armani may be and how popular his designs and shows, he is not immortal.

PRADA EXAMPLE

Some industry sources said it would be wise for the Italian couturier to prepare for the future in a way similar to Miuccia Prada. Four years ago, Prada stunned many in the industry when she hired Raf Simons to co-design Prada’s collections with her.

The duo has defied doubters who believed Miuccia Prada would struggle to work with another designer. The new ethos of co-design at the heart of Prada has been highly successful, helping Prada beat the industry’s worst downturn in recent history. Prada’s retail sales were up 4 percent in the nine months to Sept. 30.

Simons, 56, has given Miuccia Prada more freedom and mindspace to focus on the smaller sister brand Miu Miu and develop it with gusto. Every major brand has suffered a drop in sales this year but Miu Miu’s revenue was up 97 percent in the first nine months of the year. An impressive feat. Miuccia Prada, 75, is confident Prada’s creative direction will be in good hands when she decides to retire and leaves Simons in charge.

Miuccia Prada, Italy’s female fashion authority, could inspire Armani himself to consider hiring an experienced pair of hands, as she did, such as Slimane, to prepare for the day when he can no longer design and work.

CHANEL MISTAKE

Chanel’s owners, the Wertheimers, made the mistake of not looking for a proper replacement for many years before Karl Lagerfeld died in 2019. They opted for the easy solution of continuity by appointing his right-hand woman Virginie Viard as Chanel’s creative director instead of hunting for someone who could bring a strong new creative vision into the brand and keep it relevant.

Viard helped the French powerhouse muddle along and continue to grow sales, albeit more thanks to steep price increases in leathergoods than to higher volumes. Stepping into the big shoes of Lagerfeld, a visionary and a genius, was never going to be easy. It turned out Viard did not have that much to say from a cultural point of view and her last collections appeared out of sync with the times, fashion critics said. Last week, Miss Tweed was first to report that Bottega Veneta’s Matthieu Blazy, a Franco-Belgian designer with roots in Antwerp’s creative design cauldron, was the top contender to replace Viard. His appointment could be announced as early as next month.

Giorgio Armani may not want to repeat the Wertheimers’ strategic mistake and prepare for the future better. The designer has several people in-house whom he has trained to replace him should he keel over tomorrow. He regularly invites them to take a final bow at his side after his shows. However, he is not only a talented couturier but also a shrewd businessman.

He is one of the few people in this industry said to have “a right brain and a left brain,” in other words business acumen as well as fashion vision. This is rare. Normally, two different people embody such skills – the CEO and the designer. Armani has both. This dual talent enabled him to create a fashion juggernaut and conquer the world in spite of his humble origins in a provincial town outside Milan.

LOSS OF RELEVANCE

No doubt the nonagenarian knows that the day he is no longer in charge, and the brand continues to be designed by people in-house, it risks losing relevance over the years unless he finds a rare talent with a strong point of view.

Should the company be sold, Armani would be worth much more with a designer in place, ready to take it to the next level, than without a designated successor, which would create uncertainty about the company’s future. Slimane, who is 56, has a big fan club. Among his admirers was Lagerfeld. The late German designer liked to say he forced himself to lose 42 kilos to fit in Slimane’s tight-fitting suits after he started as creative director of Dior menswear in 2000, a job that would propel him to stardom and which he kept for seven years.

In an interview with Le Figaro in 2013, when Slimane was the creative director of Saint Laurent, Giorgio Armani had said he admired Slimane’s work. “Hedi is a poet,” he told the French daily. “But our business is measured in concrete terms, and obviously his Saint Laurent is selling very well,” he added. That’s important for the Italian couturier.

Every brand Slimane has worked for has seen its sales grow significantly. The French designer would make Giorgio Armani feel more relaxed about the future of the company he founded in 1975. Armani’s sales in 2023 totalled €2.44 billion, up6percent at constant exchange rates.

However, license revenues from products such its as perfume, cosmetics and eyewear were down, the company said,declining to provide precise details. Armani said this was a sign of weaker demand for accessible luxury. Armani also declined to disclose how bad the decline was in fashion sales in the first half of this year and in the second half of 2023. When the company released its 2023 and first-half statement for 2024 in July, it would only say that the decline was “in single digits” in percentage terms. However, its profitability last year remained stable, it said.

OPEN TO A DEAL

Armani said total brand turnover, with fashion revenues and including those generated by its licenses with L’Oréal and Luxottica, stood at about €4.5 billion in 2023-- a 2.6 percent decrease comparedwith2022. In its statement, the company pointed out that the total retail value of Armani-branded products worldwide stood at approximately €6.5 billion for 2023.

So, would Giorgio Armani be open to a possible deal?

For decades, the patriarch of Italian fashion flatly refused to countenance a merger or a sale of his company. However,this year, on the cusp of his 90th birthday, the billionaire tycoon, who started out as a window dresser in Milan department stores, told Bloomberg he “couldn't rule anything out.”

In his written interview with Bloomberg in April, the veteran couturier said that he “currently did not envisage a takeover by a large luxury conglomerate” but stressed that he did not “want to exclude anything a priori because that would be an ‘unentrepreneurial’ course of action.” Asked about a potential IPO, he said: “Listing is something we have not yet discussed, but it is an option that may be considered, hopefully in the distant future.”

Senior bankers in Milan say that, should Armani consider even selling a stake, “everyone” would be interested. That ranges from LVMH to Kering to Prada to Mayhoola, the Qatari investment fund that controls Valentino and Balmain. John Elkann, the Fiat scion behind family office Exor, has spoken at least twice with Armani about buying the company but talks,which started in 2021, never amounted to anything because of disagreements over prices, industry sources have said. Still, one veteran fashion executive in Milan who knows Armani well, says it is widely expected Elkann will want to try again to negotiate with Armani's heirs after the tycoon's death.

There is some speculation a foundation could lock up Armani's ownership once he dies, but bankers say they expect heirs will be able to make their own decisions once any lock-up expires, if there is one. Expectations are that the sale of Armani is likely to take place once Armani himself is no longer in the driver's seat. However,given he rules Armani as a dictatorship, bankers are all “at the window” ready to jump should the man suddenly decide, even in his waning months and years,that he would like to do a deal after all.

CORPORATE GOVERNANCE

Armani would benefit not only from new design blood, but also from clearer and more transparent corporate governance. The company is run by managing director Giuseppe Marsocci, to whom regional bosses and different Armani sub-brands report, and Daniele Ballestrazzi, who is finance director and chief operating officer.

Giorgio Armani likes to keep power split within his company. A spokeswoman would not disclose who was in charge of production, an important position within the company. She said: “There are no other management figures we are disclosing.”

On the board of Armani sit several members of the founder’s family, including Andrea Camerana, his nephew and John Elkann’s cousin via their grandmother. A potential deal with Elkann would allow Armani to“remain in the family,” industry sources said, and preserve its independence.

Camerana, who founded the Italian publishing house Pelledoca Editore, returned to work full-time for Armani in 2021 as sustainability managing director. Camerana had left in 2014 following a spat with management but he never left the board, on which he sits with Armani cousins Roberta and Silvana and his mother Rosanna.

Also on Armani’s board is Federico Marchetti, Yoox-Net-A-Porter (YNAP) former CEO and founder of Yoox. Giorgio Armani recruited him in 2020 to help craft the company’s digital strategy. Marchetti, who made tens of millions of euros by offloading his lossmaking company to Richemont, was once eyeing the CEO job at Armani.

He is no longer very involved with the company, several industry sources said. The YNAP disaster has not reflected particularly well on Marchetti, they said. Marchetti and Armani did not respond to requests for comment on that point.

Strange that Marchetti would have advised Armani on digital matters, since it is one of the few Italian brands of its size and importance that does not sell on online fashion retail websites such as Farfetch, or NAP or rival Mytheresa, which has just been promised a big cheque from Richemont once regulatory authorities clear its acquisition of YNAP. Armani, however, sells on the discount website Yoox, which Marchetti founded in 2000. Armani declined to confirm whether Yoox was still powering its e-commerce business and what would happen once the business belonged to rival Mytheresa.

Also on Armani’s board sits Leo Dell'Orco, a close associate of Armani who has worked for his company for more than four decades and is head of the men's styling department for the Giorgio Armani, Emporio Armani and Armani Exchange collections. Together with Marchetti, they are the only non-family board members.

REPUTATION SUFFERED

The Armani Group is run in a top-down, paternalistic fashion. The company provides jobs for life and is known for taking good care of its staff and business partners. However, like LVMH’s Dior, it is in dire need of tighter control over its supply chain. Armani and Dior’s reputations suffered this year after they were both busted by the Italian police for relying on underpaid Chinese immigrants to produce some of their expensive handbags. The police told the media that Chinese subcontractors were paid €93 for an Armani handbag, which the fashion house would sell for about €1,800 in its boutiques.

Italy’s last independent megabrands such as Armani, Prada Group, Zegna and Dolce & Gabbana all want to be king of their own patch and resent the fact that LVMH is much bigger and the French group and its archrival Kering have snapped up many big Italian brands in the past 20 years. Giorgio Armani may deny he is in talks with Slimane but he has not said his last word yet.