Nautical but nice, Armani pins his colours to the mast with a collection in seafaring style

As Milan fashion week succeeds the London collections, mighty Italian fashion brands such as Prada, Gucci, Versace and Armani are raising their hopes for spring/summer 2004 in the face of economic adversity.

The sobering effects of a strong euro, the threat of terrorist attack and the conflict with Iraq have had an impact on their previously loyal clientele and, by extension, profitability. The idea this week must surely be for the world's most commercially driven names to present designs not only to tempt women back into their flagship stores, but to reflect a new mood of careful optimism. Giorgio Armani, presenting his collection yesterday afternoon at his cavernous theatre designed by Tadao Ando, was the first of the bigger names to pin his colours to the mast, using a nautical theme to demonstrate that his signature relaxed tailoring is still a force in haute couture.

His soft jacket is now slim and single-breasted, with narrow tuxedo-style lapels, or double-breasted and cropped short in striped seersucker. A pair of navy sailor's trousers looked modern and elegant, as did the opening sequence of slouchy, flat-fronted trousers in navy, white and black.

A trend for naval details first emerged at last month's New York collections. But Armani, who gave his models anchor-shaped diamante earrings, sequinned Breton tops and white leather bags decorated with lobsters, has more cause than most to find inspiration in the seafaring life.

This summer, the hard-working designer bought his first yacht and cruised around his properties on the island of Pantelleria, in the Mediterranean. "I was thinking I'd really like to stay on my boat for a little longer," he said. Armani, 69, is the sole shareholder of his empire, for which he has not yet named a successor to take over if and when he chooses to retire.

As such, the future of his £2.8bn global business has recently been the subject of some speculation among industry observers. Armani has hinted at a future allegiance with one of the luxury goods conglomerates, such as LVMH, which dominate the landscape of fashion.

"I do have to think about it," he said. "There are different solutions and one could be to associate myself with a [luxury goods] group."

This month, an audience beyond the besuited guests at yesterday's presentation will have the opportunity to see Armani's designs up close. A retrospective of his 27-year career opens at the Royal Academy's new galleries on Burlington Gardens in central London.

But present-day concerns for financial performance are beginning to abate. This week, an Armani executive spoke to Women's Wear Daily of "a general optimism" and revealed that the company's trade in the United States was finally picking up. Representatives for other marquee names in Milan all made similarly upbeat predictions.