Miki Huljić: How I Brought the Armani Brand to Croatia

In light of the news of Giorgio Armani’s passing, experienced Croatian manager Miki Huljić, now a member of the Management Board of Končar, described his experience of bringing the Armani brand to Croatia during the time when Huljić was the CEO of Lantea, then one of the leading fashion retail chains in the country. We present his account in full:

I was at the helm of the company that opened the Emporio Armani shop in Zagreb, on Frane Petrića Street, in 2007. Negotiations for the shop’s opening lasted over a year and a half. During my first visit to Milan, immediately upon arrival, I had the opportunity to personally meet Mr. Armani quite by chance at Nobu Cafe. When my colleague and I introduced ourselves and mentioned that we were from Croatia, he noticeably took a step back. When we explained why we were in Milan, he asked who among his managers had a meeting with us and politely wished us good discussions.

For the next year and a half, despite our efforts, his managers, reportedly including him personally, persistently rejected our project. The reasons were: the city has fewer than two million inhabitants, no one he perceives as competition had entered the market yet, doubts about us as genuine partners, and doubts about the chosen location. They were right in most of their arguments. However, we did not give up. The opening of the shop was finally approved, as his associates told me at the time, by Giorgio Armani himself, and only after our study (one of the sent ones) was shown to him, which indicated that Croatians did not perceive him, but rather his main competitors, urban rivals, specifically D&G, as the true kings of fashion at that time.

According to the research results, Croatians ranked Armani only fourth. A friend of mine conducted the study. When he presented the results to me, he said that he could perhaps interpret this seemingly poor outcome of the research a bit differently. I said – no, let it stay just like this. He was concerned because we were sending a message to the king in Milan from Zagreb that he was not the un-crowned king after all. I said – now he will finally approve the project, that is exactly what we were missing in our arguments.

That our project was approved and that we were entering into a contractual relationship was communicated to me by his associates one late Saturday afternoon, just a few days after our study was sent to Milan. The call caught me by surprise while I was in the company of one of my colleagues at the time and his friend, a respected Zagreb architect. We happened to meet that afternoon at the cinema while I was waiting for my son to come out of a movie screening. After the phone call, the architect enthusiastically congratulated me, and I repeated to my colleague three times – we got a contract with Armani! However, any reaction from him was absent. He simply started talking about another topic each time. One of the reasons why the shop was closed after the contract expired was the described ‘warm welcome’ of such success. Of course, other reasons should also be mentioned. Allegedly, neither party was satisfied with the collaboration anymore. The franchisee was dissatisfied because the shop, according to him, was not achieving good results, but rather losses, while the franchise owner believed that the franchisee did not know how to manage his franchise properly, even though it was achieving decent results. They say – we gave you a racing car that you do not know how to drive. Your result is good, excellent, but…

The investment in opening the shop was exceptionally high. The revenue of the shop in its first full year of operation was unexpectedly very good. I do not know if the later revenues were significantly worse because I left the company. It should also be noted that the crisis of 2009 and 2010 significantly affected that segment of the market. However, we did not open that shop due to high expectations for results. We opened it for several other goals, which we considered crucial for the long-term survival of the company in the market at that time.

First, through the EA franchise, we had guaranteed Armani jeans, then Armani’s best-selling program. And with Armani jeans (later also with D&G), we would stop the expansion of a regional company that relied on those two franchises and which strongly threatened our market position. Those two franchises would guarantee us excellent positions in shopping centers. Second, during that period, we were still struggling to buy Namu in Ilica. We needed brands with which we would differentiate ourselves from the previous offer in downtown Zagreb; we needed levers with which we could stand equally in our backyard against Peek & Cloppenburg, which was advancing and threatening to take a large part of the market from us, even jeopardizing our survival in the market (especially if they bought Namu in Ilica). After signing the contract with Armani, contracts with other major brands, such as the Max Mara group, D&G, Liu Jo, Tosca Blue, and many others, were soon signed without major difficulties.

Third was the company’s image. One of the arguments for why they did not want to approve our project from Milan was precisely the image, and we wanted to change that image. They wanted distinction, and their condition for opening the shop was that we do not market Lantea in connection with the shop, and therefore they conditioned that the shop be opened by a specially established SPV. We complied with the establishment of the SPV, and as for the image, we multiplied their request for distinction by zero – because it was not written in the contract as such. They looked at me, then a young manager, and said: we understand why you so eagerly want the franchise, but we do not want to associate the name Armani with the company you lead. Until the opening of the EA shop, shopping centers did not want Lantea in their portfolio (despite the numerous well-known brands that Lantea sold). Car dealerships did not want to participate in the prize games that Lantea organized. After the shop opened, shopping centers began to call us themselves and offer spaces. Until then, we had been sneaking around shopping centers that were doomed to fail in advance.

Armani did not only set a high standard for clothing style but also strongly influenced retail standards. Giorgio Armani was a missed opportunity for a different, stronger Zagreb company, perhaps for a different department store Namu, for a different center of the city of Zagreb.

‘Don’t try too hard when choosing your clothes. People with the most style look like they didn’t try at all.’