Giorgio Armani will: Who will get the inheritance? What happens to his fashion empire?

Italian designer Giorgio Armani’s will has shocked many in the business world. The luxury fashion giant, who died last week at the age of 91, instructed his heirs to sell off the brand he built 50 years ago or seek a market listing.

His will, published by Italian media on Friday (September 12), was drafted in March. The decision to sell off his vast fashion empire is a major shift from Armani’s previous stance of protecting the brand’s independence and Italian roots.

Here’s what we know about Giorgio Armani’s will.

Giorgio Armani’s will says…

Giorgio Armani’s will divides the Armani Group between his close family and the Armani Foundation, which was set up in 2016 to preserve the designer’s legacy.

He said in the document that he wants his heirs to sell a 15 per cent stake in the business within 18 months of his death. An additional 30 per cent to 54.9 per cent stake should be sold to the same buyer in three to five years, according to a copy of the will seen by the Financial Times (FT).

It says priority should be given to luxury giant LVMH, cosmetics group L’Oréal and eyewear company EssilorLuxottica. Two of these are French companies, which have come as a surprise to many in the Italian fashion industry.

If a deal with these companies, or another of “equal standing”, fails, Armani, in his will, raised the possibility of a public stock market listing as an alternative.

The Armani Foundation would retain 30.1 per cent of the shares in a listing and in a sale.

In a statement, the executive committee of Giorgio Armani asserted that the foundation would have a strong influence, whatever happened.

“The foundation… shall never hold less than 30 per cent of the capital, thereby acting as a permanent guarantor of compliance with the founding principles,” it said, reported AFP.

These include an ethical approach with “moral integrity and fairness”, the global development of the Armani name, and a focus “on innovation, excellence, quality, refinement of the product and the pursuit of an essential, modern, elegant, and understated style”.

Is LVMH most likely to buy Armani?

All three companies mentioned by Armani in his will have welcomed the possibility of buying the Italian luxury giant.

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.”

Italian eyewear firm EssilorLuxottica said in a statement that it would consider a possible deal. “We’re proud of the consideration our group and its management received from Mr Armani,” a spokesperson said, as per a Sky News report.

French cosmetics giant L’Oréal, which has produced Armani’s popular beauty line for nearly 40 years, said it was “touched and honoured” to be considered.

The Armani group also has a commercial partnership with EssilorLuxottica.

Armani’s fashion empire is estimated to be worth 5 billion and 12 billion euros ($5.9 billion-$14 billion), Reuters reported, citing industry analysts.

Analysts believe LVMH, which has a market value of 240 billion euros, is likely to purchase the Italian luxury fashion brand.

As per FT, industry executives in Milan and Paris said that Armani could be a welcome addition to Arnault’s vast collection of brands. The French billionaire has been interested in the Italian fashion brand for some time, according to people close to LVMH.

“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 to Reuters.

A luxury executive in Milan expressed surprise that Armani named LVMH in his will. The person referred to the 2023 documentary Milano: The Inside Story of Italian Fashion, which features Armani, who dismissed the sale of his group to the French. “It’s just unthinkable that only a few years later, out of all people he mentioned Arnault as his preferred buyer,” the person told FT. 

What will Armani’s heirs get?

Armani ’s net worth was estimated at $11.8 billion when he died on September 4, according to Forbes magazine.

Known in the industry as “King Giorgio”, Armani did not have any children who could inherit his fashion empire. He was the major shareholder of the company he established with his late partner Sergio Galeotti in the 1970s.

The heirs to Armani’s fashion house are considered to be his sister, Rosanna, and nieces Silvana and Roberta and nephew Andrea Camerana, as well as his partner and right-hand man, Leo Dell’Orco.

Armani’s will mentions that all “short- and medium-term strategic decisions will rest with Mr Dell’Orco and the family, supported by the foundation,” the company said in a statement.

The largest share of the company, 30 per cent, will go to Armani’s longtime partner Dell’Orco. He will also control 40 per cent of the voting rights and chair the Armani Foundation, as per Sky News. 

Armani’s sister Rosanna, her son Andrea, and his nieces Silvana and Roberta will get a 15 per cent stake each. However, Rosanna and Roberta will not have voting rights.

The Armani Foundation will receive only 10 per cent of shares, but will control 30 per cent of the voting rights.

In the will, Armani wrote that Dell’Orco’s shares should be sold twice as quickly as other family members.

“Mr Armani’s intention to safeguard strategic continuity, corporate cohesion and financial stability for long-term development is confirmed at every stage,” the company statement said.

The designer’s real estate empire was bequeathed to his sister Rosanna and his nieces and nephew, reported AFP. 

Dell’Orco will retain the use of properties in Saint Tropez in France, St Moritz in Switzerland and on the islands of Antigua and Pantelleria.

With inputs from agencies