Giorgio Armani's Will Directs Heirs To Sell Stakes, Names LVMH, L'Oréal As Preferred Buyers

Giorgio Armani’s will outlines plans to sell a stake in his closely held fashion house to a major luxury firm, setting in motion a process to eventually fold the Italian brand into a larger group.

The documents published Friday direct his heirs to sell an initial stake of 15% in Giorgio Armani SpA to one of three preferred buyers — LVMH Moet Hennessy Louis Vuitton SE, EssilorLuxottica SA or L’Oréal SA — or a company of similar standing within 18 months, according to a copy obtained by Bloomberg News. The buyer could then raise its holding to a majority after three years.

Armani, who died earlier this month at the age of 91, flirted with selling the company during his lifetime but always opted to stand alone. As a designer, he was known for his exacting detail, and the will reflects this, establishing a precise roadmap for the company’s sale that came as a surprise after decades of guarding its independence.

“Armani presents a rare opportunity,” Berenberg analysts Nick Anderson and Harrison Woodin-Lygo said in a research note, estimating the company has a value of €5 billion ($5.9 billion) to €7 billion.

Armani has longstanding partnerships with EssilorLuxottica and L’Oreal, and the founder was close to LVMH Chairman Bernard Arnault, with whom he once discussed an alliance.

In a statement, EssilorLuxottica said it would carefully consider what it called "this evolutionary prospect." Representatives for LVMH and L’Oreal declined to comment.

As an alternative to a sale to a larger group, Armani could also consider an IPO in Milan or another major market, according to the documents.

LVMH would make the most strategic fit with Armani, the Berenberg analysts said, adding that the French luxury group “has a record as a long-term, patient and supportive minority investor.”

Closely held Armani was left in the hands of Armani’s foundation, family members and partner Leo Dell’Orco. A key role will for now be played by Dell’Orco, whom the Italian mogul referred to as his “right hand man.” Together with the other heirs, Dell’Orco will now decide which main group may buy the majority of the fashion house.

The plan to sell Armani comes at a challenging time for luxury brands. Tariffs and geopolitical uncertainty have weighed on consumer confidence following the post-pandemic boom years. Despite the challenges facing its core menswear business in a more casual market, Armani’s will reflects the founder’s confidence in the brand’s long-term value.

The company has had mixed results navigating shifts in consumer habits: perfumes like Acqua di Gio, licensed to L’Oreal, have fared well in a world now dominated by online sales. In 2018, the companies renewed their licensing arrangement through 2050. Similarly, an eyewear partnership with EssilorLuxottica was renewed in 2022 for another 15 years.

Classically elegant men’s tailoring, a hallmark of Armani in its heyday, has been a less reliable bet in today’s more casual milieu.

Armani’s transition from independence is also reflective of a wider trend. Founder-led businesses are giving way to institutional owners and the luxury market is shrinking to a handful of global groups such as LVMH and Gucci owner Kering SA. The contest for Armani could awaken dealmaking in the sector as other competitors consider ways to keep up.

LVMH has extended its footprint in Italy in recent years, investing in the holding company of Moncler SpA founder Remo Ruffini. LVMH also owns a 10% stake in Tod’s SpA, which went private last year with L Catterton, the Arnault-backed private equity fund.

In an April 2024 interview with Bloomberg News, Armani hinted at his plan, saying he didn’t want to rule out any possibilities for the future. He added then that it would be up to his heirs to evaluate opportunities that arose in the future. While independence could still drive value for Armani, “what has always characterised the success of my work is an ability to adapt to changing times.”