CEO Interview: Fabrizio Lavezzari

Fabrizio Lavezzari, Representative Director, Presidio Japan KK

Fabrizio Lavezzari

By Peter Harris

Please can you tell us about the Armani Exchange (AX) brand?
The basic concept of the brand is young, urban and sexy—there is a strong association with music and the club scene. Not only do we produce CDs mixed by popular Djs from New York or London, we also put on clubby events inside stores. While there is a healthy overlap between the Armani brands, we have to be careful to avoid brand cannibalization and make sure that our coverage is broad and seamlessly segmented. This means thinking carefully about location and age and that is why Armani Exchange has opened its stores in places associated with youth and street culture while Giorgio and Emporio are in different areas.

How is the business structured?
AX is a joint venture with an entrepreneur from Singapore started in the early 1990s. However, the company Giorgio Armani himself play an important role in all major decisions. Every new month we release new products and he has to sign off on all them before they reach the market—he also has the final say on store locations. In 2005, he actually bought a 25% stake in the business and this may increase as things progress.

How did AX come to Japan and what are the plans for expansion?
Actually it started to gain traction with Japanese consumers in overseas markets. The brand has been really popular with Japanese customers in Hawaii and New York and started to acquire an elevated status here because of that. The product lines are the same here as in the rest of the world of present but, as I mentioned, changing the lines every month keeps things fresh. In the future we may design specific products for the Japanese market. In Japan we have the flagship store in Shibuya, and two new openings in Chiba—one in Funabashi and one in a mall run by Aeon in Koshigaya. At 160,000 square meters, the latter will be the biggest shopping center in the country. This year will be one of consolidation but we aim to open more and more stores and are looking to be in every major city in the country, most likely starting with Osaka.

How does AX compare price wise in Japan?
We like to think that AX is in the ‘accessible- luxury’ market segment. That means between 5,000 to 6,000 for a T-shirt and denim starts from about 12,000. This makes us cheaper than Diesel, more expensive than Gap and puts us on a par with Calvin Klein and Ralph Lauren, but we like to think that we have the edge in terms of being trendy.

How did you launch in Japan?
When we opened in Shibuya we had a big opening event there. We had a club night at Womb featuring some famous Djs such as Shinichi Ozawa and Towa Tei and around 1,300 young people attended. We also had some billboards up on the crossing and ran various print and online campaigns. However, for this brand, marketing is a bit more underground and done by word of mouth—hence we have been on Mixi and we are close to launching a mobile site. We are focusing on young mediums.

Japan is a very significant market for us and that’s why we are here. In fact, for the Armani group, Japan represents more than 12% of our revenues.

Are you nervous about launching a brand aimed at youth in country where the demography is that of an aging population?
Well, it’s a fair point but Japan is a very significant market for us and that’s why we are here. In fact, for the Armani group, Japan represents more than 12% of our revenues and, while the number of young people may decrease, the number of young-at-heart is on the rise; many people here, including myself, suffer from Peter Pan syndrome.

When did you come to Japan and what’s your background?
I was born in Milan and I initially came to here on a scholarship program when I was 20 years old. I decided to extend that and ended up graduating from university in Nagoya, majoring in Economics. After that I was hired by Nomura and worked in international capital markets. I stayed in banking and have held positions within the international capital markets and private banking—I’ve been fortunate to work on some really interesting projects in both Japan and Europe.

That’s quite a change, banking to fashion?
Yes it is, and I have found it very refreshing. In banking there is a need to be narrow and focused but a senior position at a company like Armani gives you a much wider focus and requires lateral thinking. Also, it is nice to work with real, tangible products rather than complex financial commodities. I enjoy lateral thinking and the challenge of working in a private company. I’ve had to learn a lot and enjoy the different culture.

What are your hobbies and interests?
Well, I was extremely attracted by working for Armani because I am a big fan of the product and I have a strong interest in fashion—I enjoy window shopping around Ginza. I also love playing golf and have a keen interest in architecture.JI