Recovered from the original publisher: Kellogg Insight
Luxury houses are especially vulnerable in these moments because their identity is bound up not just in products but in the founder’s own personality and vision.
“Luxury brands are based on a particular creative vision,” says Gregory Carpenter, a professor of marketing at the Kellogg School and an expert in luxury brands.
Armani exemplified that dependence, owning 99.9 percent of the company and continuing to insist, even near his death at 91, “As long as I am here, I am the boss.”
Carpenter describes the challenges of succession in luxury brands.
Why founders matter so much
Unlike mass-market companies, such as carmakers Ford or General Motors, which are built around consumer insights, luxury brands start with a founder’s creative vision. That vision becomes the essence of the brand itself.
“Luxury’s the other way around. It’s like art—I create something that, when you see it, you say, ‘oh, that’s very cool, I never thought about that before,’” says Carpenter.
This deep entanglement between creator and brand makes succession uniquely difficult. Chanel struggled for more than a decade after the death of founder Coco Chanel in 1971, only regaining its high-end status when Karl Lagerfeld became creative director in 1983 and reinvigorated the line.
But luxury rests on more than a designer’s creative vision. It also depends on the buyers who adopt and reinforce the brand’s identity. In this sense, Armani excelled at fostering both a definitive look and celebrity status.
“Every luxury brand is defined by its community,” Carpenter says. “Armani, in particular, was the cultivator of the community. If you Google Armani, most of the time you’ll see him standing with a celebrity on the red carpet.”
Other luxury houses have taken a similar approach. In the early 1960s, Enzo Ferrari’s most celebrated model—the 250 GTO—was produced in a run of just 36 cars. Buyers reportedly had to be personally approved by Ferrari himself, creating an exclusive circle that reinforced the brand’s aura of scarcity and status.
Armani’s innovation was to do something comparable in fashion by popularizing the red-carpet moment as a stage for his clothes, making Hollywood celebrities part of his community and, in turn, his brand.
The gamble of succession
Armani may have laid out a clear plan for ownership in his will, naming preferred buyers such as LVMH, L’Oréal, or Luxottica, depending on the executors’ decision to sell. LVMH describes itself as a “house of brands,” including Louis Vuitton, Tiffany, and Marc Jacobs. Bernard Arnault, its long-time chief executive, has emphasised the importance of giving designers creative freedom—an approach Carpenter sees as central to the group’s success.
But that’s also contingent on the future creative direction the label chooses. Whoever inherits the role of shaping the brand’s identity will need to evolve Armani’s legacy without betraying it.
“It’s a huge gamble…. One of the biggest problems for luxury brands is managing the evolution of their brand,” Carpenter says.
Past transitions show just how difficult this can be. Ferrari thrived long after Enzo’s death, with successors able to capture what it meant to own a Ferrari while still modernizing the cars. Rolls-Royce, by contrast, has struggled to make its newer luxury vehicles feel like natural extensions of its heritage.