NEW YORK, Jan 16, 2002/ --- Consolidated sales at the Armani Group rose 23 percent to about $1.14 billion in 2001, preliminary results released by the company today showed, bringing compounded annual growth for the last three years to about 18 percent.

"This performance underlines the success of our ongoing strategy to transform the company into a vertically-integrated design, manufacturing, distribution and retail fashion and lifestyle products group that is able to fully capitalize on the enormous strength of the Armani brand throughout the world," Armani president, chief executive and designer Giorgio Armani said.

"Through our wise financial management we plan to continue with our significant strategic investment program in the year to come, focusing on the further enhancement of our exclusive retail network, the acquisition of further relevant Italian-based manufacturing capacity and the extension and diversification of our range of product lines."

Like other fashion companies, the Italian fashion house said that it had not been immune to the economic slowdown in the U.S., which was underway even before the terrorist attacks of September 11.

The Armani Group revealed that it saw about a 20 percent decline in U.S. sales in the immediate aftermath of September 11, but added that it had seen improvement since then and remained extremely confident in the medium-term prospects for the market.

Last year, the group's 25th anniversary year, was also a particularly strong year for the group.

Overall, Armani retail sales last year rose 9 percent to about $429.5 million, but retail sales in North America inched up just one percent. European retail sales rose 16 percent while there was a 15 percent increase in retail sales in Asia Pacific.

As far as consolidated revenues are concerned, on the other hand, Armani said that it had seen 35 percent growth in North America, followed by a 29 percent rise in Asia/Pacific and other regions and a 13 percent increase in Europe.

The Armani Group traced 45 percent of consolidated revenues to Europe last year, followed by 28 percent in North America and 27 percent in Asia/Pacific and other regions.

Armani also said that it had seen an 18 percent increase in worldwide sales of Emporio Armani watches last year, while perfume sales were up 19 percent. Complete Armani Group economic results, including profit figures, are expected to be presented in April.

Only two weeks into the new year, the Armani Group already has numerous initiatives planned for 2002, including the launch of an Emporio Armani jewelry collection and a new men's fragrance.

The group also plans to exercise an option to acquire 100 percent of Italian knitwear producer Miss Deana S.p.A., which will produce knitwear for the various Armani lines beginning with the spring/summer 2003 collections. A price tag for the planned acquisition was not revealed.

The Armani Group invested a total of about $244 million last year, including resources spent for the acquisition of clothing manufacturer Simint; the opening of the group's new headquarters and Milan's Armani theatre; and the expansion and renovation of the group's retail network. The cash-rich group was able to finance these investments out of its own pocket.

The year 2002 is also expected to be marked by the continued expansion of the retail network, the group said. Last year, 33 new Armani Group stores were opened, while 20 existing stores were renovated.

Armani Collezioni flagship stores are slated to open this spring in Milan, Paris and Frankfurt, and an integrated multi-brand Armani store will be opened in Hong Kong in the fall. The group also plans to continue with the expansion of the Armani Casa household line.

A new Armani perfume, Armani Mania, will be launched in Europe and Asia in the spring of 2002. The company is hoping to replicate the success of men's perfume Gio pour Homme, which it tout as the leading men's fragrance in the world.

Meanwhile, this year the new Giorgio Armani Cosmetics product line will be available in new markets, including Japan.

The company said that the new Emporio Armani jewelry line will be an extension of the lifestyle that brand reflects. Giorgio Armani S.p.A. has signed a letter of intent with Fossil, Inc., the current licensee for Emporio Armani watches, for the worldwide manufacture and distribution of the new collection, beginning with the autumn/winter 2002 season. Given that the target consumer is younger, prices should also be more accessible.