By  on October 10, 2008

Just as he went against the grain with his advertising and marketing, Renzo Rosso broke ground in the Nineties with a distinctive retail strategy.

At a time when designers were meticulously planting their flags around the world with a web of boutiques that all looked the same, Rosso stood out with his Diesel stores, each one different. His pleasure in finding varied objects to differentiate his stores is reflected in his sprawling yet unassuming office here, where Andy Warhol Mao portraits coexist with an American Indian totem, plastic skulls embellished with Diesel glasses, family photographs and other memorabilia.

The brand’s Hong Kong flagship, which opened in May, exemplifies Rosso’s vision, with its mix of East-meets-West, modern and vintage, luxury and casual elements. A luminous copper facade is juxtaposed with mesh-lined black glass, while, inside, industrial style concrete walls contrast with antique wood panels and shelves, white geometric three-dimensional tiled walls and black crackled slate or herringbone-patterned wooden floors. Vintage chandeliers stand out against high-tech modern lighting.

Not only is each store’s decor different — Rosso adapts the merchandise offering to the store and the location. “We know our consumer in each market, right down to the street,” he said, noting that even stores as close as the ones on New York’s Greene Street and on Broadway don’t carry the same goods.

“We create a desire in our customers and they look out for our different stores,” he said.

Whatever the location or design style, the indispensable rule of thumb for Rosso is to “always start from the product.” Other guidelines include a focus on service, shipments and merchandising, and a change in Diesel’s product offering in each store every month.

Rosso is currently focused on two major openings, in Milan next month and in New York’s Fifth Avenue in spring 2009. Located in a prime spot near Tiffany & Co., Prada, Bergdorf Goodman and Louis Vuitton, the three-story, 19,440-square-foot New York flagship is poised to be the company’s jewel in the crown.

Rosso passionately describes the Fifth Avenue store as “any entrepreneur’s dream” and the fulfillment of a long-harbored desire. And it’s a costly dream at that: he’s already pumped $18 million in the project, including redoing the building’s foundations and creating new staircases. Rosso said he expects the store to generate revenues of about $50 million a year.

The facade will be covered by a black metal and dark copper structure, with a yellow light running around the perimeter, and Diesel’s trademark Indian head logo etched into it. Conversely, the city of Milan has not allowed Rosso to experiment with the facade of the company’s upcoming store there, given the fact it’s in a historical, Fascist-era building in the center of town.

Diesel’s opening on Fifth Avenue forms another cornerstone in the brand’s drive to conquer the U.S. market, and, in a way, brings it full circle: Diesel’s first-ever freestanding store opened in New York’s Lexington Avenue in March 1996, opposite Bloomingdale’s and next to Levi’s. Rosso said that 15,120-square-foot store continues to be “very profitable,” with sales of about $17 million a year. Overall, Diesel’s sales in the U.S. have grown by 25 percent this year.

The company currently has 360 stores and 5,000 multibrand points of sale worldwide. Wholesale and retail sales each account for one-half of Diesel’s turnover. Defining moments in the brand’s retail expansion were the openings of flagships in Rome in 1996, in Paris in 2001, in Milan in 2003, in London’s Bond Street and Osaka, Japan, in 2006, and in Tokyo’s Ginza district in April. The latter is the company’s largest store in Japan and contains a number of high-tech devices. For example, a touch screen, interactive mirror reflects the customer’s image on the display and at the same time, captures the image, allowing a two-sided view or even comparisons between looks with different outfits side by side.

One of the latest developments for Rosso is the sale of vintage, non-Diesel merchandise recovered through the Red Cross from a smaller, recently opened Osaka store — a project he said he plans to replicate in the new Milan flagship. At the Osaka store, Rosso has also ventured into yet more new territory, experimenting with a radio station.

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