L'Oréal could take Armani fortune

FRENCH cosmetics giant L'Oréal and Dubai property developer Emaar have emerged as prime potential partners for Milan luxury group Giorgio Armani as the 69-year-old founder arranges his succession.

A deal could crystallise the company's value at about e4bn (£2.7bn) and give Armani's favoured partner an entry into the luxury-goods business.

Billionaire Armani, who built his empire on the clothes he designed for Richard Gere in the 1980 movie American Gigolo, says he is looking at ways of preserving the group's independence. One possibility is the sale of a minority stake to an outside investor or to a 'perfume multinational', he was reported as saying.

Communications chief Isabelle Harvie-Watt said Armani was weighing several options but no decision had been taken. 'He is working on creating a strong management team to ensure the business continues to grow,' she added.

Armani's Milan-based fashion empire had sales of e1.3bn last year. While rivals have rushed to float or to be taken over by multinational groups, Armani still owns his business outright and appears determined that it will not fall into the hands of French luxury-goods groups Louis Vuitton Moët Hennessy or PinaultPrintempsRedoute.

L'Oréal, capitalised at e42.7bn, already makes perfumes sold under the Armani brand, is virtually debt-free and needs to find new external growth opportunities. A spokesman declined to comment.

Emaar Properties, the Dubai-based developer with which Armani agreed a massive hotel deal in February and which is building the world's tallest tower in Dubai, has massive financial firepower and a close relationship with Gucci.

It is developing 10 hotels and four holiday resorts in partnership with Armani, which will design the interiors and have a management role.

Armani told an Italian newspaper: 'In three years' time, everything should be in place.'

A one-time medical student and department-store window-dresser, Armani joined Nina Cerruti as a designer in 1961 and launched his own business in 1970. He has made a relaxed easy-to-wear look his trademark while at the same time maintaining meticulous tailoring and manufacturing standards.