In the future, will low-key luxury become an unattainable “luxury”?
On September 4, Armani Group officially announced that Giorgio Armani, the founder of the brand, passed away peacefully at the age of 91 in the company of his relatives. This legend, hailed as “revolutionizing the fashion industry” by the industry, has long transcended the single identity of “designer” and has become an iconic symbol of an era. For half a century, he has deeply integrated the aesthetic philosophy of “low-key luxury” into the global fashion context, and his influence has already broken through the boundaries of the fashion circle and penetrated into many fields such as lifestyle and cultural aesthetics. Today, this fashion empire valued at $12.1 billion is standing at a crossroads in history: once the essence of the brand laid by Giorgio Armani is lost, the core characteristic of “low-key luxury” may really become a scarce item in the luxury market from the brand gene.
So, in the post-Armani era, who can carry the banner of “low-key luxury”? Where will this huge fashion empire go?
The death of Giorgio Armani undoubtedly marked the end of a fashion era. Born in Piacenza in Italy in 1934, he spent his childhood in the shadow of World War II and even suffered severe burns from the sudden detonation of an unexploded shell. He started his career as a medical student before dropping out of school to serve in the military, eventually starting his career with fashion at La Rinascente, a Milanese department store. In 1975, Armani and his late partner Sergio Galeotti founded Armani Fashion House, and with limited seed funding, they built the fashion business that is worth $12.1 billion today.
In terms of fashion creation, he broke the inherent shackles of the fashion category at that time – let men’s clothing say goodbye to tough and rigid and become softer and more sensual tension; At the same time, it promotes the popularization of suits among women and redefines the aesthetics of women in the workplace. Even at the end of his life, Armani still cares about his career, and the group statement emphasizes that he “worked until the last moment, always devoting himself to the company’s operations, series design and future project planning”, interpreting his adherence to fashion throughout his life.
Unfortunately, the current development of the brand is facing challenges. Armani Group’s fiscal year 2024 results report showed that consolidated net income for the full year decreased by 5% year-on-year to €2.3 billion at constant currency terms; Earnings before interest, taxes, depreciation and amortization (EBITDA) fell even more by 24% year-on-year to €398 million, driven by a combination of lower revenue and higher operating costs. This performance pressure is largely due to the continuous slowdown in luxury consumption in the Chinese market. From the perspective of regional market performance, the differentiation trend is obvious: Europe is still the group’s largest source of revenue, accounting for about 49%, the same as in 2023; the market share in the Americas is stable at 22%; The Asia-Pacific region, which had high hopes for growth, fell to about 19% of revenue.
This decline in performance is not unique to Armani, but is highly consistent with the overall trend of the global luxury market. In 2024, global luxury consumption will be around €1.48 trillion, down 1%-3% year-on-year at current exchange rates. More noteworthily, Bain & Company’s report pointed out that the customer base in the luxury market has shrunk for the first time – the number of global luxury consumers has decreased from 400 million in 2022 to 350 million at the end of 2024, losing about 50 million consumers in just two years.
Of particular concern to the outside world is that Giorgio Armani has never been married, has no children, and has always kept a low profile about his personal life, and his death has naturally sparked widespread speculation about “who will take over the Armani Group”. In fact, Armani has already planned for a rainy day, and began to lay out the group’s succession planning and independence guarantee more than ten years ago.
In 2016, he founded the Giorgio Armani Foundation and built a rigorous governance framework that decentralized control of the Armani Group across six entities he absolutely trusted: his sister Rosanna, nieces Silvana and Roberta, nephew Andrea Camerana, and long-time partner Pantaleo Dell’Orco), as well as the Giorgio Armani Foundation.
This governance mechanism clearly stipulates that major corporate actions (such as IPOs or mergers and acquisitions) are prohibited for the next five years, with the core purpose of preventing the destruction of brand identity and core tone and ensuring the stability of the group’s development. Among the main heirs and stakeholders, the three nephews all hold important positions in the group, forming a dual support of “family + career”: Silvana Armani is a core force in the field of womenswear design and is regarded as a key figure in the inheritance of style; Roberta was previously the head of global and VIP communications, and was deeply involved in brand image building. Andrea is responsible for the sustainability sector, focusing on the group’s long-term strategic direction. In addition, Pantaleo del Orco, who joined the company in 1977, became Armani’s most core business partner after the death of Sergio Galeotti in 1985 and is now an important pillar of the Group’s stable transition.
But the Armani Group faces challenges that go far beyond the leadership transition – the entire luxury industry is in a critical period of structural adjustment. According to a related report by CITIC Securities, in the second quarter of 2025, the global luxury industry was dragged down by the recovery of the tourism market that fell short of expectations, and the overall performance weakened, and the organic growth rate of the industry fell by 1% year-on-year (compared with the year-on-year growth rate in the first quarter of 2025 and the 3% growth rate in the fourth quarter of 2024).
What is more significant is the performance differentiation between brands and categories: in the second quarter of 2025, at constant exchange rates, LVMH, Hermès, Kering, Richemont, Prada Group, Moncler Group, Tapestry, and Ralph Lauren grew by -4%, +9%, -15%, +6%, +6%, -2%, +8%, and +11% year-on-year, respectively. Among the leading brands, only a few brands such as Hermès and Richemont have maintained steady growth, and most brands have fallen into the dilemma of slowing or even declining growth, and the “Matthew effect” in the industry has further intensified.
The changes in the Chinese market are even more critical. As the largest growth engine of the global luxury industry, the Chinese market is now facing phased challenges. According to a report by Guanyan.com, the sales of China’s domestic luxury market in 2024 will be 512.7 billion yuan, down 17% year-on-year – this is also the first time that China’s luxury online and offline sales have declined at the same time: online sales will be 237.5 billion yuan, down 5% year-on-year; offline sales were 275.2 billion yuan, down 25% year-on-year.
At the same time, the full recovery of outbound travel has intensified the phenomenon of consumption outflow. In 2024, approximately 40% of Chinese consumers’ luxury purchases occurred outside the borders, with Asia Pacific, particularly Japan, and Europe emerging as core destinations. The exchange rate advantage brought about by the continued depreciation of the yen has greatly stimulated the enthusiasm of Chinese consumers to buy luxury goods in Japan – according to relevant media surveys, 40% of respondents listed Japan as the first place to buy luxury goods in 2024, a significant increase from 8% in 2023, and the outflow of consumption further diverted domestic market demand.
It is worth noting that at a time when the luxury industry is dominated by capital giants such as LVMH and Kering, Armani is one of the few “old aristocrats” who still maintain independence. Giorgio Armani rejected capital temptations many times during his lifetime: including LVMH’s merger and acquisition offer, Qatari royal family’s capital injection proposal, and even when revising the succession plan in 2023, he still adhered to the bottom line of “introducing non-voting shares” and resolutely defended the brand’s independence.
But this “independence” is a double-edged sword: on the one hand, it allows Armani Group to spend 332 million euros to renovate its global flagship store and bring its e-commerce business back into direct operation even though its revenue will decline by 6% to 2.3 billion euros in 2024, avoiding excessive capital intervention in brand strategy; On the other hand, the capital market has long been eyeing this “independent kingdom” and is always waiting for its moment of vulnerability. According to Bloomberg Intelligence, brand premiums account for more than 60% of Armani Group’s valuation in 2024 – which means that once the successor fails to maintain the design voice and brand tone established by Giorgio Armani, the group’s valuation is very likely to suffer a “halving”.
In fact, Armani was already aware of this contradiction before his death, and he once said frankly: “My biggest weakness is that I control everything.” Today, the Armani Empire, which has lost its “absolute control”, must make a crucial choice for the future between “sticking to independence” and “seeking refuge from capital”.
Industry expert Mario Ortteri’s view is quite representative: “Will Giorgio Armani be an interesting target in the eyes of capital? The answer is absolutely yes – it’s one of the most recognizable brands in the world, with a clear and unique style vision. But he also added that due to the constraints of the governance framework formulated by Armani during his lifetime, it is unlikely that a merger and acquisition deal will be reached in the medium term, and the successor will still have a stable time window.
In addition to the game of capital and inheritance, Armani’s heirs also need to deal with fundamental changes in the behavior of luxury consumers. The core data of the Bain report shows that the number of global luxury consumers has decreased from 400 million in 2022 to 350 million by the end of 2024, with young people accounting for the highest proportion of the 50 million consumers lost. Millennials, who once drove the industry’s recovery, have now faded, while younger Gen Z has not yet formed enough spending power, and the industry temporarily lacks new external growth drivers.
At the same time, the “rejuvenation” and “digitalization” process of the luxury industry has entered a mature period, and co-branded series, celebrity cooperation, and KOL promotion have become the norm in the industry, and consumers’ sensitivity to such marketing methods has decreased significantly. The fierce market competition has also caused aesthetic fatigue – during the epidemic, consumers’ pursuit of “value preservation” has further exacerbated the problem of design homogenization, and many brands’ classic models have fallen into the dilemma of “similarity”.
More importantly, consumers’ consumption concepts are changing: “quality-price ratio” has become an important consideration, and their sensitivity to price is constantly increasing. On the one hand, frequent price increases by brands gradually push middle-class consumers away; On the other hand, wealthy people have also begun to reduce the frequency of purchases due to the lack of novelty in design and product homogenization. In such a market environment, the Armani Group in the post-Armani era must face a core strategic choice – whether to be close to the needs and preferences of current consumers, or to continue to adhere to the core positioning of “low-key luxury” established by Giorgio Armani?
In fact, the key to Armani Group’s future success lies in balancing “heritage” and “innovation”. The new draft charter formulated by Giorgio Armani during his lifetime, which officially entered into force after his death, clarified the principles of governance for the heirs: both requiring a “cautious approach to acquisitions” and guaranteeing the stability of the brand’s decision-making power through the “division of share capital in the class of WVR”; At the same time, it stipulates that any stock market listing not only needs to be supported by a majority of directors, but can only be promoted “after the fifth year of the effective date of this regulation” – these provisions provide institutional guarantee for the smooth transition of the group and draw a bottom line for “succession”.
At the level of “innovation”, digital transformation is a threshold that Armani Group must cross. The reason is clear: it is expected that in 2025, China’s luxury market will surpass offline consumption for the first time; In the next 3-5 years, the proportion of global luxury online transactions is expected to exceed 60%. This means that Armani Group needs to strengthen its digital capabilities (such as optimizing online shopping experience, laying out social e-commerce, exploring new scenarios such as the metaverse), while avoiding the dilution of excessive digitalization on high-end brand positioning and offline experience, and finding a balance between “high-end” and “digitalization”.
Sustainability is another key challenge. Today’s young consumers not only pay attention to the craftsmanship of luxury goods, but also pay more attention to the brand’s environmental protection concept and supply chain transparency – although Armani has made initial progress in these areas (such as launching a sustainable fabric series), there is still a gap compared with leading brands in the industry, and it is necessary to further integrate sustainability into the whole link of product design, manufacturing and brand communication in the future.
“There’s no point in making clothing that is out of touch with the real world, and that’s at the heart of what has stood for 40 years.” This famous quote from Giorgio Armani during his lifetime may be the key to the Armani Group’s cycle through the cycle. At this crossroads full of uncertainty, it is hoped that the successor will remember this original intention of “resonating with reality”, so that “low-key luxury” will not only not be reduced to an “unattainable luxury”, but also become the core competitiveness of the brand to adapt to the new era and win new markets.
