- The Washington Times - Monday, February 20, 2006

BLOOMBERG NEWS

Italian fashion labels Giorgio Armani and Gucci are the world’s most coveted brands, according to a survey by market research company ACNielsen.

One in three consumers said that they would buy Armani or Gucci products if money weren’t an issue, according to a survey of 21,000 online consumers in 42 countries that was conducted by ACNielsen and obtained by Bloomberg News.

“Giorgio Armani and Gucci clearly understand that strong brands make for profitable businesses,” said Frank Martell, president and chief executive officer of ACNielsen Europe. “They are not merely selling fashion, they are selling an image, something consumers are willing to pay a premium for.”

Armani and Gucci started as family-owned businesses and grew into global brands in the 1990s. Mr. Armani, who founded his fashion empire with an unlined jacket in 1975, has expanded into cosmetics, housewares and watches and is planning to open hotels.

Gucci, owned by French retail company PPR SA, was turned around by former executives Tom Ford and Domenico De Sole, who made its bamboo-handled bags, horse-bit motifs and double-G logos trendy and profitable.

“Both of these brands have consistently reinforced and updated their brand values,” said Deepak Varma, senior vice president for international research at ACNielsen. “They have kept investing in their brands.”

Another Italian label, Versace, ranked third in the ACNielsen poll. Of the respondents, 27 percent said they would buy Versace products if money weren’t an issue. Among the other brands consumers said they most desire are Christian Dior, Ralph Lauren and Louis Vuitton.

The survey result coincides with the start of fashion shows in Milan, where Giorgio Armani presented his 2006 fall-winter women’s collection yesterday. The collection featured body-hugging skirts with ruffles and tight-waisted jackets, a departure from the more masculine pants and suits of the past.

Mr. Armani, speaking after the show, attributed the success of his brand to “the coherence of style over nearly 30 years and the courage to trust in things I like.”

Gucci designer Frida Giannini is expected to present her second runway collection for Gucci in Milan tomorrow, while Versace shows Friday.

Gucci, founded in 1921, is fueling sales with products that evoke its roots, including Miss Giannini’s Guccissima and Flora collections. Guccissima features the house’s double-G logo embossed in leather on handbags, boots and shoes, while the Flora motif is based on a scarf designed for Grace Kelly in 1966.

The Gucci brand, which generates most of the profit at PPR’s luxury unit, Gucci Group NV, reported a 14 percent increase in sales in the fourth quarter. Gucci Group Chief Executive Officer Robert Polet aims to double Gucci brand sales in seven years.

Mr. Armani, whose company reported 2004 net income of $150 million, is extending his brand beyond clothing with initiatives that include an agreement with Dubai’s Emaar Properties PJSC to build a minimum of 10 luxury hotels and resorts during the next decade for at least $1 billion. The first hotels are slated to open in Milan and Dubai in 2008.

The ACNielsen survey was conducted in November and polled purchasing behavior and future aspirations of online consumers in Europe, Asia-Pacific, the United Arab Emirates, North and Latin America. Consumers were asked which designer labels they already owned and which they would buy if money were no object. Of the consumers polled, 12 percent said they already owned Armani and-or Gucci products.

The survey has a margin of error of 4 percentage points, ACNielsen said. It was conducted among a sample of Internet users in each country that are representative of the online population.


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