What South African entrepreneurs can learn from Giorgio Armani

WHEN Giorgio Armani passed away at the age of 91, the legendary Italian fashion designer and founder of the Armani empire, left behind more than a valuable multinational, he left a carefully scripted succession plan for the luxury-goods business he had built since 1975.

- KEN NEWPORT

In his will, Armani instructed his heirs to sell off stakes in the company gradually. He set specific timelines and even named preferred buyers, such as Louis Vuitton Moét Hennessy (LVMH) and LOréal. Since his death, the Armani directives have been making international headlines for the detail they contain and the thought that went into them. Armani’ instructions also offer valuable lessons for South African business owners who want to ensure that their companies - small, medium or large - are preserved and not left in the lurch by a lack of succession planning, or torn apart by legal complications. The main reasons for delays in wrapping up business owners’ deceased estates in our country often relate to the absence of clear instructions. This could include a succession plan, financials not being up to date, no valuation or buy-and-sell agreement being in place, and tax returns not filed with Sars. So, while the example of Giorgio Armani would not apply in its entirety within our South African legal context, his legacy includes some valuable lessons.

Include your business in your will.