MILAN — Giorgio Armani, who died last week, left a surprise in his will, indicating that his closest confidant and heirs must sell a 15 percent stake in the company to another luxury company within 18 months or hold an initial public offering.
LVMH, L’Oréal and EssilorLuxottica are to be given priority as potential investors, according to the will, which is dated March 14, 2025, and signed by Armani.
What Does the Will Stipulate?
The will says a 15 percent stake must be sold to LVMH, L’Oréal, EssilorLuxottica or another fashion or luxury company of equal standing between 1 year and 18 months after Armani’s death. If the sale doesn’t go through to one of the three named companies, priority is to be given to other luxury companies that have existing partnerships with Armani.
Pantaleo Dell’Orco, Mr. Armani’s closest collaborator and the head of the men’s style office who has been with the company since 1977, must approve the sale. If Dell’Orco is no longer alive, Armani’s niece, Silvana Armani, or his nephew, Andrea Camerana, will have to approve the eventual sale.
Another stake of between 30 percent and 54.9 percent is to be sold to the buyer of the initial stake between three and five years after Armani’s death. That could ultimately give the buyer majority control of Armani.
“It is immediately clear that Mr. Armani’s intention to safeguard strategic continuity, corporate cohesion and financial stability for long-term development is confirmed at every stage,” the Armani executive committee said in a statement after the publication of the will.
The executive committee, which is made up of Dell’Orco, Armani family members and the company’s senior management, said its first duty will be to name a new chief executive. Mr. Armani at the time of his death held that role and was also chairman. The executive committee didn’t give any indication about naming a new chairman.
100 percent of the company is now owned by Fondazione Armani, which Armani set up in 2016 to ensure that ownership and governance of his company would remain stable after his death. The foundation also funds development projects, including some to improve access to clean water, sanitation and hygiene in India, Zambia, Uganda and other countries.
While the foundation will own all the shares in the company, it will only have 30 percent voting rights. The rest will be distributed among Mr. Armani’s heirs. Dell’Orco will have 40 percent of the voting rights while Silvana Armani and Andrea Camerana will each have 15 percent. Silvana and her sister are the daughters of Sergio Armani, Mr. Armani’s late brother. Camerana is the son of Rosanna Armani, Mr. Armani’s sister. Mr. Armani had no children.
Mr. Armani may have drawn inspiration for the arrangement from Rolex, whose founder left 100 percent of the company’s shares to the Hans Wilsdorf Foundation, which reinvests in the brand as well doling out hundreds of millions of Swiss francs to charity each year.
Retail giant Ikea and Ozempic-maker Novo Nordisk are also controlled by charitable foundations.
Why Was the Will a Surprise?
Armani jealously protected the independence of the company he founded 50 years ago and never indicated publicly that he wanted a part to be sold to outside investors after his death.
Armani resisted many and varied attempts by potential investors who tried to gain a portion of his company. John Elkann, the Agnelli scion who controls his family’s finances through the Exor holding company, approached Armani in 2021 to see if they could pool their companies to create an Italian luxury conglomerate. More than 25 years ago, Gucci approached Armani, who also had investment bankers seeking to convince the designer to hold an IPO.
Armani’s desires for the future of his company have always been somewhat mysterious and guesses abounded on what the will might hold, but few industry observers floated the idea of a partial sale to another fashion company or an IPO.
How Much Is Armani, the Company, Worth?
In 2024, Armani’s operating profit fell by a quarter to €398 million ($463 million), not including licences, while revenue dropped about 5 percent to €2.3 billion.
Since the company isn’t listed, there is no official market value and no stake has ever been sold. Analysts at Berenberg value the company at up to €7 billion. Forbes estimates Mr. Armani’s net worth, the majority of which is tied up in the value of the company, at about $12.1 billion.
Despite years of declining sales, Armani remains one of fashion and luxury’s most famous names. Potential buyers will need to gauge the value of Armani’s brand awareness and archive alongside the hefty investments that may be required to reinvigorate growth.
Who Is the Likely Buyer?
The will doesn’t indicate if LVMH, L’Oreal and EssilorLuxottica were aware they would be named, or if Mr. Armani held informal discussions with his counterparts at the other three companies.
Armani is one of the last sizeable global luxury brands that is still independent and would be a big catch for LVMH, which was long rumoured as a potential suitor.
There is a big opportunity for Armani to expand its leather goods offering and LVMH has the heft to help make that happen. But LVMH would likely seek a radical repositioning of the brand and business — cutting lower-priced sub-brands that are no longer a part of the group’s model and slashing its exposure to wholesale. That’s a costly endeavour to take on in a down market for luxury goods.
“Giorgio Armani honored LVMH by naming us as a potential partner for the exceptional fashion house he built,” Bernard Arnault, Chairman, CEO and main shareholder of LVMH said in a statement. “If we were to work together in the future, LVMH would be committed to further strengthening its presence and leadership around the world.”
The rationale for L’Oréal and EssilorLuxottica could be different. Both are existing Armani licensing partners on eyewear and beauty, respectively, and already have a big vested interest in the future of the brand.
L’Oréal dipped a toe in fashion in recent years via its acquisition of Mugler (miniscule by comparison), while competitor Estée Lauder set a precedent for how a beauty group could ensure control of a prize asset while limiting its involvement in the tricky apparel business: The American group paid $2.8 billion for its perfume unit Tom Ford, but partnered with Zegna to operate the Tom Ford fashion business.
It’s worth noting that L’Oréal has already locked down rights to the billion-plus Armani beauty business with a licensing deal that runs through 2050; EssilorLuxottica’s deal won’t expire until 2037.
L’Oreal declined to comment.
“We are proud of the trust that Mr. Armani has placed in our group and in our management,” EssilorLuxottica said in a statement. “We will carefully evaluate, together with the board, this evolutionary prospect, which deserves thorough consideration in light of the deep ties that already unite the two groups.”
What About an IPO?
Should Armani’s heirs fail to find a suitable buyer, a public listing would have to be held, according to the will.
Like listed rival Burberry, a publicly traded Armani may struggle to balance plans to reinvigorate demand with protecting its bottom line. Shoemaker Tod’s recently delisted in the hopes it could accelerate its turnaround using private investment. By contrast, several Italian independent brands have opted to raise capital through IPOs: Zegna joined the New York Stock Exchange in 2021 via a SPAC deal, while Hong Kong-listed Prada Group has explored a secondary listing in Milan.
What Will Happen With Mr. Armani’s Other Assets?
Mr. Armani also had many properties, including in Milan, New York and Saint Tropez, the ownership of which has been split between his heirs.
True to his reputation of being extraordinarily attentive to every detail, the will indicates how a long list of individual objects in Armani’s house are to be distributed. The will proceeds floor by floor. Armani says those receiving the objects can decide to exchange them with another person.
Rosanna Armani is to get a green leather table, two elephant tusks and a desk designed by Ettore Sottsass, among various other objects. Dell’Orco got many things in the house, including a bronze bear, metal animals, a Japanese rug and an Andy Warhol portrait of Mr. Armani.