In surprise twist, Armani’s will sets stage for sale of fashion empire

Heirs told to sell 15% stake in 18 months, then up to 54.9%; priority buyers include LVMH, L’Oréal, EssilorLuxottica

Late designer Giorgio Armani instructed heirs to gradually sell the revolutionary fashion house he created 50 years ago or seek a market listing, his will said, setting off a race to control one of the world’s best-known brands and a major shift for a company highly protective of its independence and Italian roots.

The will says that priority should be given to luxury conglomerate LVMH, beauty heavyweight L’Oreal , eyewear leader EssilorLuxottica or another group of “equal standing” identified by a foundation the designer set up to preserve his legacy with the agreement of Armani’s business and life partner Pantaleo Dell’Orco.

The designer, known in the industry as “King Giorgio”, died on September 4 at 91 with no children to inherit his fashion empire, which industry analysts value at between €5-12 billion. All three companies named issued statements suggesting they were open to the possibility of a deal.

The explicit mention of stake sales and of France-listed players as potential buyers came as a surprise, given Giorgio Armani’s persistent refusal to dilute his control or list his fashion group, which industry experts say retains appeal despite a global luxury slowdown.

LVMH, controlled by French billionaire Bernard Arnault, said it was honoured to be named as a potential partner.”Giorgio Armani honours us by naming us as a potential partner for the exceptional fashion house he has built,” Arnault 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.”

EssilorLuxottica, controlled by the heirs of Italian entrepreneur Leonardo Del Vecchio and with commercial ties to Armani, said in a statement it would consider a possible deal. French cosmetics group L’Oreal, which holds a licensing agreement with the Armani group until 2050, also said on Friday it will study the opportunity.

The Armani group has commercial partnerships with both L’Oreal and EssilorLuxottica. But with a market value of €240 billion and a reputation for being a patient and supporting minority investor, LVMH may ultimately prevail, some analysts said.

“We think that LVMH would likely be the most interested, of the three, in a stake, were it to become available, given the strategic fit,” analysts at Berenberg said in a note. They said the group could easily afford to buy Armani, which they valued at €5-7 billion.

The will, comprising two documents filed with a notary in March and April respectively and reviewed by Reuters, states heirs should sell an initial 15% stake in the Italian fashion house within 18 months of Armani’s death.

They should later transfer an additional 30% to 54.9% stake to the same buyer three to five years after the designer’s death. As an alternative to the sale of the second tranche of shares, an initial public offering should be pursued, in Italy or in a market of equal standing, the will said.

These types of provisions are essentially binding and could be challenged in court if not fulfilled, according to the Italian notary association.

New era

Over the years, the brand that revolutionised modern fashion through its minimalist jackets and suits received several approaches, including one in 2021 from John Elkann, scion of Italy’s Agnelli family, and another from luxury brand Gucci, when Maurizio Gucci was still at the helm.

Armani was the sole major shareholder of the company he set up with his late partner Sergio Galeotti in the 1970s and over which he maintained a tight rein – both creative and managerial – until the very end.

He leaves behind a business which generated relatively stable revenue – €2.3 billion in 2024 –  but whose operating profits have shrunk to less than 3% of revenue, according to Berenberg’s calculations.