Renzo Rosso on Key US Market, Potential IPO Timeline and Mergers & Acquisitions – WWD
MILAN – Renzo Rosso has come a long way since his first trip to New York City over four decades ago, but for the entrepreneur, the American dream remains as real today as it was then.
“I feel so close to the United States and it continues to be a priority for me. It’s the country where I invest the most, along with China, ”said the founder and president of the OTB group, citing“ James Dean, chewing gum, jukeboxes and Coca-Cola ”among the most popular idols. fascinating and most enduring America in his head.
“When I was 20 and first came to JFK [airport], I didn’t know a word of English, but I immediately felt at home, ”he said, smiling at the memory and marveling at the fact that Diesel’s debut show by Glenn Martens, digitally presented on June 21 for Spring 2022, was broadcast live in Times Square.
The love is mutual, as North America, which accounts for around 10% of the group’s sales, is expected to experience a growth rate almost double that expected for the rest of OTB around the world. In a three-year business plan, OTB is expected to achieve annual revenue growth of 15%, with North America expected to grow 27% year-over-year.
Investments totaling $ 250 million are planned over the next three years and “a large chunk” of that is destined for the United States, the entrepreneur said.
As part of this plan, the expansion of OTB’s retail distribution in the United States will be key.
The fashion group includes Diesel, Maison Margiela, Marni, Jil Sander, Viktor & Rolf and a stake in Amiri, as well as the production lines Staff International and Brave Kid.
In addition to the relocation of a Diesel store to New York, five new units of the brand are expected to open in the United States in 2021. In Miami, Diesel will open 143 apartments under contract with Wynwood, which will be completed in a few years, as the work was stalled by last year’s pandemic.
By the end of 2021, there will be 16 directly operated Diesel stores, four Marni units and five Maison Margiela units in the United States.
“It’s a magical moment in the United States now, since the arrival of the president [Joe] Biden, stimulating economic development; there is so much energy and a desire to invest, ”said Rosso. “Sales in all of our stores in the United States are growing. “
Rosso was open to discussing Diesel USA’s Chapter 11 filing, although that is “a thing of the past,” he said, as the brand is now profitable. “I can say it with joy and I am very proud of this turnaround. I thank Stefano [his son and former Diesel USA chief executive officer] for the tremendous job it has done in reducing costs, implementing more selective and brand-compliant distribution by reducing the number of stores by 50% and improving brand visibility, ”said Rosso. “If we had been a public company, we couldn’t have done this. “
Over the years, Rosso has hinted that it is possible someday to publicly list the group and, when asked for a possible timeline, said that given the three-year business plan, this “doesn’t would not arrive for three years “.
He praised “an already strong, well structured and well managed group”, admitting that an IPO would also help bring “more transparency and soundness in the management of the company and in the change of generations”. Rosso has seven children and believes that while and when OTB is a public company, the family should have a controlling stake.
Last year, as reported, OTB saw an increase in online revenue and 20% growth at Maison Margiela – bright spots for the group, despite the effects of the COVID-19 pandemic.
In 2020, the group’s profit before interest, taxes and depreciation amounted to 176 million euros, down 7.3% compared to 190 million euros in 2019.
During the fiscal year ended December 31, OTB’s consolidated sales amounted to € 1.31 billion, a decrease of 14.3% compared to € 1.53 billion. euros in 2019, when the company was back in the dark.
Diesel, after a reorganization and repositioning of its retail and wholesale channels, continues to be a core business for OTB, accounting for over 50 percent of sales.
It is in the United States that Diesel will host an event in September to present a new line of sneakers, possibly in New York and Miami. Considering the growing importance of the category, Rosso brought in five new designers dedicated to sneakers and a technician specializing in research and development “from one of the largest sneaker companies in the world”, a- he declared, without naming him.
Rosso trumpeted Martens’ creativity, which, combined with Diesel’s techniques and know-how, is the recipe for success. The Belgian designer, who joined Diesel as creative director last October, is launching a major project called Diesel Library, a gender-neutral collection that will be presented in spring 2022 as part of the group’s “For Responsible Living” sustainable development initiatives. , dear to Rosso and her sons Andréa. The library will carry a wide range of evergreen and more durable denim items, from pants and jackets to tops and skirts to name a few, with 50 percent of the overall denim collection having a length of permanent conservation.
Rosso said the United States is also a very successful market for Maison Margiela, “best in class” and growing globally. There are five stores in the United States – one in Miami, one in Los Angeles, two in New York and one in San Francisco – and the goal is to open another unit in the United States by the end of the year. ‘year.
A Margiela store will open in Toronto at the end of the year or early 2022.
In the fall of 2019, the group renewed John Galliano’s employment pact for Maison Margiela. The designer was appointed creative director of the brand in 2014 and since then the income of the Parisian house has more than doubled.
Also in Miami, Rosso plans to reopen the Pelican Hotel, which it first unveiled in 1994 and which was closed for renovations in 2020. The works will allow the hotel to expand by two bedrooms, reaching 30. “The location had become too commercial, but now [that] the mayor closed four blocks and changed the layout, it became the real heart of Miami and a pedestrian zone, ”explained Rosso. In a true Art Deco building, it has been faithfully restored to reflect this era. “I plan to open it before Christmas and I am currently looking for a partner to manage it.
Marni is also performing very well both in her Bal Harbor store – a move with a new concept earlier this year – and in her Madison Avenue unit.
The first store with the new Marni interior design concept opened in London, followed by Paris, Shanghai and Miami.
At the end of June, a pop-up called Marni Marine at the Sunset Beach Hotel in Shelter Island, NY, opened “with a specific and unique concept and dedicated products,” said Rosso.
He noted that, thanks to creative director Francesco Risso, “men’s clothing is booming”. He admitted that the creative change, when founder Consuelo Castiglioni came out in 2016, was a tough transition moment, “but now we’re getting offers to do branded capsules, Marni is super cool.” Namely, Rosso extended Risso’s contract with Marni in December 2020.
In the US next year, both Marni and Margiela will be available on the omnichannel platform supported by Moon, an in-house designed operating model that also promotes the customer experience. With a major investment, Moon was first deployed for Diesel in the United States, then in Europe.
Rosso, one of the few Italian entrepreneurs to have spoken openly about starting a fashion conglomerate, also spoke enthusiastically about his latest acquisition, Jil Sander, which he bought from Onward Holdings Co. Ltd. in March. “Day after day, I marvel at the beauty, cleanliness and sophistication of this product, and I have a great relationship with [creative directors] Luc and Lucie [Meier], enthused Rosso, who said early on that he did not want to change the creative direction of the brand. “I involve them more and more actively in the company, beyond creativity, I want their opinion.
The Meiers’ designs resulted in solid business, as Rosso revealed that the brand saw sales growth last year compared to 2019, despite the pandemic.
According to the latest available results, for the fiscal year ended February 28, 2019, Jil Sander’s revenues totaled 11.3 billion yen, or $ 104 million.
Rosso is hoping to open a temporary Jil Sander store in SoHo, New York with a new concept designed a year and a half ago. By the end of the year, it is preparing to open Jil Sander stores in New York and Shanghai.
“Based on our online sales, we see a strong demand for Jil Sander in the United States and we want to be there physically,” he said.
Rosso is also now considering the acquisition of specialist manufacturers, a strategy that allows a company to “become more solid and develop know-how,” he explained, while protecting the company’s unique supply chain. ‘Italy. He is interested in different fields: manufacturers of handbags and shoes, as well as companies specializing in washes and treatments.
His group was support artisans through the CASH program, which stands for Credito Agevolato [facilitated credit] Assistance to suppliers launched in 2013. Rosso is part of the Camera della Moda strategic committee and is a delegate of Confindustria, representing the Made in Italy supply chain in front of the institutions.
OTB also owns a minority stake in the American brand Amiri, which Rosso has defined as a “beautiful” label, citing long-lasting lines in front of the brand’s Rodeo Drive store and plans to open two new stores, in New York and Las Vegas. this summer.
As reported, Paulo Redeem, a Philadelphia-based fashion brand, won the inaugural edition of the Amiri Award, 2021, created by Mike Amiri, founder and creative director of his Los Angeles brand for men and women, as Annual fashion incubator created to inspire little-known American fashion talent by providing a support system outside of the current establishment.
“We work well with Mike [Amiri] and help develop the brand in Asia. He can count on the structure and our financial assistance. We are developing a business plan, but it doesn’t want to open too many doors, ”said Rosso, noting that Amiri’s sales will double in 2021 compared to 2020. Amiri, who created his company in 2014, is merging l ‘authentic rock’ n from LA. ‘roll and street culture. It has diversified into new categories through haute couture, accessories and shoes, and presents its main collections twice a year at Paris Fashion Week. In 2020, he opened his first retail store on Rodeo Drive in Los Angeles.
As for the wholesale trade, which represented more than a third of sales at group level last year, Rosso is working to convert the corners of its various brands into concessions with the main American department stores, Neiman Marcus and Bergdorf. Goodman at Saks Fifth Avenue and Nordstrom.
“We are becoming partners, as department stores are increasingly becoming destinations, working to have fewer but more beautiful locations,” he said.