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John Hooks: “The travel retail sector is definitely going through a period of rapid development in the field of fashion, and it is very gratifying that so many of the leading retailers in this area are already in partnership with us. The rewards can be measured in revenue and image.” |
ITALY. Fashion tycoon Giorgio Armani stunned the fashion world in September 2006 with a multi-million dollar party to unveil his latest charity endeavour in aid of the international PROJECT (RED) AIDS in Africa initiative.
In the wake of this seminal London event, Giorgio Armani Group Commercial Director John Hooks granted The Moodie Report an exclusive interview about his travel retail plans for the Emporio Armani brand in the run-up to the TFWA World Exhibition next week, where the company is showcasing its fashion and accessories (Ambassadeurs Village V5).
The Moodie Report: Please update us on Emporio Armani’s current travel retail presence.
John Hooks: Emporio Armani has five freestanding stores: Rome Fiumicino Terminal C: 160sq m, opened in partnership with Dufry in October 2003; Zürich Airside Center: 120sq m, opened with The Nuance Group in September 2004; London Heathrow Terminal Three: 72sq m opened with Frangi Handbags Ltd in December 2005; Guam DFS Galleria in Tumon Bay: 160sq m, opened in March 2006; Tokyo Narita New South Wing: 90sq m, opened with JAL/DFS in June 2006.
There is one Emporio Armani multi-brand store: London Heathrow T1: Multi-brand collection with World Duty Free, opened in October 2005.
All stores stock a selection of the Emporio Armani men’s and women’s ready-to-wear, accessories, watches, jewellery and eyewear, apart from multi-brand outlets that prioritise leather accessories.
Ready-to-wear represents the core business within Emporio Armani stores; leathergoods follow with about 25% of total turnover, while watches and eyewear account for 10% of sales.
Please tell us about your travel retail expansion plans. What is your travel retail strategy and how are you implementing it? Is the focus still on Emporio Armani? Are you entering any new travel retail markets?
The priority of our travel retail strategy is the opening of Emporio Armani freestanding stores appropriately reflecting, in terms of dimension and location, the position of the brand and its selective approach to distribution within the domestic market. Store size is important, as we wish to offer a comprehensive product choice to men and women.
The upcoming openings are: Buenos Aires Ezeiza Airport: shop-in-shop 80sq m, opening in partnership with IOSC/Interbaires in mid-November 2006; Bangkok Suvarnabhumi Airport: freestanding store, 93sq m, opening with King Power Group in December 2006; Milan Malpensa Airport: freestanding 103sq m, opening with Dufrital in March 2007; Frankfurt Airport T1: freestanding store, opening with Gebr Heinemann in mid-November 2006.
At the same time, we have decided to develop areas identified for growth by the group’s business strategy, such as leather accessories in multi-brand outlets.
Our focus is on the Emporio Armani brand because the cosmopolitan, international customer attentive to this lifestyle perfectly matches the profile of the travelling fashion consumer.
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| Left, centre: The first Emporio Armani airport boutique began trading at Rome Fiumicino Terminal C with Dufry in 2003. The Armani/Dolci wall unit has recently opened. Right: The London Heathrow T3 store interior has a sleek, dark ambience | ||
Are you planning to launch any new product collections or categories into travel retail?
Giorgio Armani has designed a special Emporio Armani (RED) capsule collection of clothing, accessories, eyewear and watches which will be available in all 124 Emporio Armani stores, including travel retail, throughout the world by mid-November.
RED is a global initiative whose primary objective is to engage the private sector in the fight against AIDS in Africa by channelling funds from the sale of RED products directly to The Global Fund. Giorgio Armani is contributing an average of 40% of its gross profit margin from sales of all Emporio Armani (PRODUCT) RED products directly to The Global Fund. The range of products now includes clothing and accessories but will be expanded further with the launch of a Emporio Armani (PRODUCT) RED women’s and men’s fragrance and jewellery in spring 2007.
What are the best-performing markets/regions for the brand in travel retail? What are the fastest-growing travel retail markets worldwide for the Armani group?
All perform equally well. Fastest-growing are Europe and Asia.
Do you merchandise travel retail stores differently from the domestic market boutiques?
No, but obviously we make an appropriate selection.
Do you notice any differences with customers in travel retail as opposed to domestic market? Are travel retail consumers more classic in their tastes, wealthier, older?
The passenger profile varies according to individual locations, but by and large customers opt for the Armani style in much the same way as in a city.
Our retailers stock key items from the collection and always achieve optimum sell-out. In general, travel retail customers have an even more sophisticated taste, having travelled and visited different destinations. This fits in perfectly with our product philosophy.
Do you ensure staff are trained to take into account the travel environment, e.g. the time factor – people having to catch a plane?
It is the professional commitment and experience of the retailer that guarantees the selection and preparation of personnel. Every season we support staff with specific training on the collection and the handling of visual merchandising, which is indispensable to sustaining the store’s image.
Please describe how The Armani Group communicates with travel retail consumers in terms of merchandising, packaging, etc. Do you communicate with passengers once they have left the store?
There are no differences between a travel retail store and one located within a domestic environment: from packaging to catalogues, the service is generally identical to that within a directly owned store.
At present no CRM surveys are made on travel retail clients, although such a project will be undertaken at a future date.
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| Left, centre: The 160sq m Emporio Armani store in Guam (left, centre) opened its doors in the DFS Galleria complex in Tumon Bay in March 2006. Right: The interior of the 90sq m Tokyo Narita boutique opened in partnership with JAL/DFS in June 2006 | ||
How do you market the travel retail stores themselves?
We obviously include the locations in the list given inside our catalogues. We also mail out press releases and do PR activity for the international fashion press; with travel agents; with the airport authority in their shopping literature; on our main Armani Group website; as well as other travel/lifestyle websites.
How important is travel retail to The Armani Group as a company? What is the percentage contribution in terms of sales? Do you view travel retail as a shop window and is it a major revenue generator?
Despite the fact that our involvement in travel retail is at an early stage, the past two years have produced excellent results. It simply constitutes one facet of our overall group commercial strategy, not a separate travel retail niche business.
What is your opinion of the travel retail industry?
The travel retail sector is definitely going through a period of rapid development in the field of fashion, and it is very gratifying that so many of the leading retailers in this area are already in partnership with us.
What are the advantages of a travel retail presence?
The rewards can be measured in revenue and image.
Any drawbacks, in your view?
Obviously by definition the customers who shop in travel retail are transient and therefore it is more challenging to maintain loyalty and repeat purchases.
Would you consider selling travel retail exclusive merchandise?
No.
About The Armani Group
The Armani Group is one of the leading fashion and luxury goods groups in the world with 4,900 direct employees and 13 factories. It designs, manufactures, distributes and retails fashion and lifestyle products including apparel, accessories, eyewear, watches, jewellery, home furnishings, fragrances and cosmetics under a range of brand names: Giorgio Armani Privé, Giorgio Armani, Armani Collezioni, Emporio Armani, AJ | Armani Jeans, A/X Armani Exchange, Armani Junior, Armani Baby and Armani Casa. The group’s exclusive retail network currently comprises 71 Giorgio Armani boutiques, 12 Armani Collezioni stores, 124 Emporio Armani stores, 97 A/X Armani Exchange stores, 17 AJ | Armani Jeans stores, 6 Armani Junior stores, one Giorgio Armani Accessori, one Emporio Armani Accessori store and 20 Armani Casa stores in 40 countries.
MORE STORIES ON THE ARMANI GROUP
Emporio Armani debuts in Narita and Guam – 09/06/06
Armani jets in to London Heathrow Airport – 04/01/06
Armani Group to fast-track travel retail expansion – 14/10/05
