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Armani Links With Samsung for Electronics Line

by Stacy Meichtry. Wall Street Journal. Sep 24, 2007

MILAN -- Italian designer Giorgio Armani's announcement that he is teaming with South Korea's Samsung Electronics Co. to develop a line of high-end electronic goods underscores how top fashion houses are stretching the boundaries of the luxury-goods industry as they search out new products to brand.

Under the alliance, Mr. Armani will design electronics such as handsets and liquid-crystal-display television sets manufactured by Samsung, and will distribute them through his world-wide network of boutiques. He will unveil the alliance's first product -- a credit- card-sized cellphone -- at his fashion show in Milan today, the companies said.

Mr. Armani, 73 years old, is the latest Italian designer to plunge into the highly competitive electronics industry. Fashion house Dolce & Gabbana has introduced a gold-colored Razr cellphone made by Motorola Inc., and Prada has designed a touch-screen cellphone for South Korea's LG Electronics Inc.

However, Mr. Armani has been among the most aggressive of the fashion pack to extend his brand. In addition to fashion, the Armani empire includes chocolates, housewares, flowers and a soon-to-be- opened hotel in Dubai.

Phones, Mr. Armani said, are a logical next step for designers. "We make as much of a personal statement with the mobile phones that we carry or the televisions we have in our living rooms as we do with the shoes and bags we wear or the furnishings we choose to place in our homes," Mr. Armani said in a prepared statement.

For Samsung, which trails Motorola and Nokia Corp. in cellphone sales, joining with a fashion designer is a means of distinguishing its wares in an increasingly crowded market.

Samsung and Armani didn't say how much the phones will cost or which carrier will provide service for the phones. Giorgio Armani boutiques will begin carrying the cellphone in "major European markets" in November, the fashion house said. It plans to distribute the phone outside Europe next year.

Mr. Armani plans to unveil a Samsung-produced LCD television set as part of his home-interiors line, Armani/Casa, in January.

Comments

I thought this was an interesting alliance. When two well-known brands from completely different industries get together, you have to think about what is in it for both of them. The article indicates designers are trying to extend their brands in ways beyond mere clothing, furnishings and accessories. In nonequity strategic alliances like these, designers stretch the definitions of accessories and furnishings to include portable and household electronics. This allows them to benefit from basic retail strategy (sell more to existing customers) without compromising on style.

Assuming the lines are co-branded at some level, the manufacturers improve their brand positioning among some potential customers. They also take a welcome break from cut-throat competition in the superstore world of phones and televisions, receiving part of the spoils from the price-indifferent fashion crowd.

With unintentional homage to Will Ferrell's fashionably miniscule cell phone on Saturday Night Live http://en.wikipedia.org/wiki/Jeffrey%27s , the first joint product will be a credit card-sized phone. Mr. Armani asserts the electronics that people carry are a "statement". So for people whose purchases make their statements, Armani and Samsung will oblige - for a tidy premium.