Lesson #3: Stretch Your Brand but Do Not Let It Snap

“When I began making jeans, the press was skeptical that someone who made luxury ready-to-wear could start something so commercial,” says Armani. “But I considered it a medium to speak with a less affluent clientele.”

There were never any doubts when it came to Armani’s talents as a designer. However, when his partner in both life and business passed away, Armani was left to defend his talents as a businessman. He had little to no business experience but didn’t want to give up on his and Galeotti’s dream of expanding his company.



To this end, Armani decided to create new product lines, including many less exclusive and less expensive spin-offs of his luxury label. He introduced Armani Jeans for casual clothes and Armani Exchange, which consists of trendier urban clothing. While he is primarily still known the world over for his fashion designs, Armani has moved on from clothing to launch product lines that include accessories, home furnishings, restaurants, car interiors, chocolates, and, most recently, hotels.

“I have always paid great attention to having brands that don’t overlap,” he says. “I choose a brand for a particular market and balance my collections in terms of look, price, distribution and location.” Much like the risks he took in creating an androgynous and understated style of fashion, so too did Armani demonstrate his willingness to take risks with his business. However, in expanding his company, he made sure to examine exactly in which directions he was heading. He wanted to saturate the market with the Armani name, but at the same time, he had to make sure he was not cannibalizing his other lines or ruining his reputation for quality and luxury.

With the same attention to detail he put into his designs, so too did Armani approach the idea of brand extension with caution. While keeping his core vision, Armani strove gradually to apply it to new ventures. It was not always an easy process. “When the supply of fashion items becomes so enormous, the consumer tends to choose the leading brand, which means that others are left behind,” he says. “And to establish real credibility…is no simple matter.”

Armani recognizes that the trend towards brand integration is snowballing now, necessitating further caution for those entrepreneurs embarking down the slippery slope. For instance, while designers such as Louis Vuitton are known for their luxury accessories such as purses, wallets, and belts, it would be hard to make the transition into clothing. Likewise, Armani claims that “turning John Galliano’s ideas for Christian Dior into saleable prêt-a-porter is also difficult.” In fact, Armani was even once asked by Bernard Arnault, the Chairman and CEO of both Christian Dior and Moët Hennessy Louis Vuitton, to look at his companies’ runway lines and help determine what could be sold prêt-a-porter. “They have top designers but you can’t become credible overnight just on the basis of huge advertising campaigns,” says Armani.

Armani has tried to take his customers’ imaginations along with him from clothing to other unrelated markets. He has leveraged his name to create a pre-established reputation in these other industries. In doing so, Armani has accepted the risk of making his entire chain vulnerable. But, by approaching the strategy with caution, ensuring his products never overlapped, and making sure each new product launched was contributing back to his core brand, Armani has come out at the forefront of brand extension in the business and fashion worlds.



Lesson #3: Stretch Your Brand but Do Not Let It Snap

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