With New Store, Armani Takes on the Recession

The rest of the world may be filled with gloom and doom about the economy, but in the world of Giorgio Armani, there are no dark clouds.

In the midst the the worst economic crisis in recent history, Armani opened a new flagship store on New York's Fifth Avenue this week, saying that he has no worries about whether he can actually sell the $10,000 dresses the store displays.

"What else will they spend their money on?" he said, referring to the super rich.

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The stars turned out earlier this week to welcome Armani to his new den, a glass box on the corner of Fifth Avenue and 56th Street complete with a massive staircase and an Italian restaurant nestled at the top.

"I think when the entire world thinks of fashion, Armani, of course, comes to to mind," stylist Rachel Zoe said. "I think he's the universal language. Honestly, there isn't a person in the world [who] hasn't heard of Giorgio Armani."

Such hyperbole ruled the opening-night party, where hundreds of the fashion elite -- dressed exclusively in black -- raved about the new space and the concept for the store, which places all Armani's brands under one roof.

The Armani Empire

Known for his muted palette and his deconstruction of the jacket, Armani gained traction as he began styling the Hollywood elite in the 1980s. Before long, he turned the red carpet into an Armani carpet.

Some people credit him with making black the chic color to wear, and most of the stars at the store's opening followed that rule.

"I didn't invent black," he said, adding that "it is certainly the most elegant color that one can have on. That's the rule in fashion."

He has dressed famous stars, including Julia Roberts, Cate Blanchett, Leonardo DiCaprio, Tom Cruise and Katie Holmes. His niece Roberta Armani works as his ambassador, handling his celebrity clientele.

"The red carpet has a major, a major impact," said Roberta Armani. "Major. We just dressed Angelina Jolie at the BAFTA's [British Academy of Film and Television Arts] in London, and she [wore] an Armani Prive gown. And after that, all the clients from Paris called. They wanted the same gown."

And how much would a dress like that sell for? It is "a haute couture dress, so I think it would sell for around $40,000, maybe $50,000," she said.

If celebrities sell clothes, then Armani's underwear sales may soon be up as well. Victoria and David Beckham can be seen posing in Armani's newest ads wearing, well, very little Armani. Victoria Beckham was at opening night wearing sparkling Armani down the outdoor red carpet. She pointed out her 4-inch high Armani heels. Asked by a reporter if they were comfortable, she said, "Nothing this beautiful is comfortable."

Not 'All Gloom and Doom'

Armani acknowledges it is "very dangerous" to open a new retail store in the current economic climate but said he decided to go forward anyway. As the sole owner of the Armani empire, which last year reported sales of $2.1 billion, he said he believes his investment now will pay off later. But how much did his new store cost him?

"I don't have a precise idea, but I do know that it's expensive," he said.

Very expensive. A similarly sized Armani store in Tokyo cost nearly $38 million, according to the company's annual report.

Among those who turned out to welcome Armani to town was Caroline Kennedy, who helped cut the ribbon at Tuesday night's ceremony.

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