ARMANI GROUP CONTINUES TO IMPROVE PROFITABILITY: +23% IN FIRST HALF 2004

• Consolidated Net Revenues increase + 5% (+ 8% at constant exchange rates) to Euro 644 million
  
• EBITDA increases + 14% to Euro 122 million
  
• EBIT increases + 23% to Euro 89 million
  
  

OCTOBER 1, 2004, MILAN – The Armani Group today announces results for the first half of 2004, which show another industry leading performance with consolidated net revenues increasing to Euro 644 million, representing a growth of + 8% at constant exchange rates (+ 5% at current exchange rates) and EBITDA rising +14% to Euro 122 million (representing 19% of turnover), compared with the first half of 2003 . In the period, EBIT also rose by + 23% to Euro 89 million (representing 14% of turnover).

Giorgio Armani, President and Chief Executive of Giorgio Armani S.p.A., said:

“In the first half of 2004 the Armani Group has delivered an industry leading performance with a notable increase in profitability against a background of solid growth in our brand and product categories and in all of our geographic operating regions. These results once again prove the success of our chosen business strategy as an independent, vertically integrated fashion and lifestyle company.

We continue to drive expansion through the ongoing re-investment of our cash flow in supporting the group’s strategic priorities. In this respect I wish to draw special attention to both the positive trend of our direct store network sales throughout the world - most notably in the key markets of the United States and Japan and the emerging China market - and the dynamic growth we are now seeing in our accessories business. This positive momentum demonstrates the return we are now seeing on the investment we have made in these two important areas over the last several years.

In summary, as we approach the company’s 30th anniversary year in 2005, I am confident that the results for the full year 2004 will once again illustrate why the Armani Group maintains a reputation for delivering consistent growth and profitability.”

Direct Store Sales
The Armani Group’s direct store sales for the first half 2004 increased throughout the world compared to the same period in 2003:

China + 47 %
Japan + 8 %
USA + 7 %
Europe + 6 %

With growth across all brands:

Giorgio Armani + 10 %
Emporio Armani + 5 %
Armani Collezioni + 4 %

Product Category Sales
The Armani Group has also registered strong product category sales growth in wholesale orders for the Spring Summer 2005 season, notably:

Giorgio Armani / Emporio Armani Accessories + 30 %
Emporio Armani Watches and Jewellery + 30 %
Armani Casa + 22 %
Armani Junior + 17 %
Armani Jeans + 11 %
Armani Collezioni + 7 %

Highlights of first half 2004:
Positive growth in all geographic regions and in key product categories
Strategic Investment Programme continues with Euro 17 million invested
Net positive financial position as of June 30, 2004 at Euro 274 million
New store openings totalled 13
Existing store renovations totalled 6
Advertising and communications expenditure increased + 10%

The Armani Group is one of the leading fashion and luxury goods groups in the world today with 4,600 direct employees and 13 factories. It designs, manufactures, distributes and retails fashion and lifestyle products including apparel, accessories, eyewear, watches, jewellery, home interiors, fragrances and cosmetics under a range of brand names: Giorgio Armani, Armani Collezioni, Emporio Armani, AJ | Armani Jeans, A/X Armani Exchange, Armani Junior and Armani Casa. The Group’s exclusive retail network currently comprises: 59 Giorgio Armani boutiques, 11 Armani Collezioni stores, 123 Emporio Armani stores, 74 A/X Armani Exchange stores, 13 AJ | Armani Jeans stores, 6 Armani Junior stores, 1 Giorgio Armani Accessori store and 17 Armani Casa stores in 37 countries.

Contact: Robert Triefus
Armani Press
Tel: +39 02 723181 www.armanipress.com

Contact:

Robert Triefus
Executive Vice President, Worldwide Communications
Giorgio Armani S.p.A.
Tel: +39 02 723181