Following a long period where it became heavily reliant on men’s sales, Diesel is out to rev up its women’s business.
“We are calling it the rebirth of the Diesel female,” said Daniela Riccardi, chief executive officer of the Breganze, Italy-based company, who was in New York last week to present the spring women’s collection to press and buyers. “In the last few years, we were not as consistent in the female product as we were in the male product. So we have started this project from scratch, redefining the Diesel female.”
Women’s product currently accounts for 30 percent of total Diesel sales, down from 40 to 45 percent at their peak. Riccardi is aiming for women’s sales to account for 50 percent of total sales. “Women’s should be a billion dollar business for us. Now it’s about $250 million to $300 million. It’s underrepresented,” she noted.
As part of that strategy, Diesel is targeting a somewhat older customer than before, between the ages 25 to 55, with a sweet spot of around 30. “She is a woman who is working and has important commitments in her life. But she likes to wear the casual alternative to luxury. She is brave, sexy and playful,” said Riccardi.
Following the financial crisis of 2008 and the subsequent economic downturn, Diesel offered more lower-priced product and attracted a younger audience, said Riccardi of the demographic shift in the brand’s customer base. “We went more mainstream and more affordable. Now we want to go back to what we have always been,” she explained.
For spring, that means the women’s collection has higher ticket prices, better quality fabrics, more long dresses and a more feminine aesthetic. There are also mint green leather motorcycle jackets, sophisticated trenchcoats, ruffled denim jumpers, shorts with suspenders and flared pants.
Shoes, bags and accessories are a key growth opportunity in women’s for Diesel. Currently, those categories make up just 15 to 20 percent of sales. “In the total marketplace shoes and accessories make up 50 percent of the female market. Ideally, 40 to 50 percent of our sales should come from shoes and accessories,” said Riccardi.
Going forward, Diesel will offer a greater assortment of more stylish, sexy shoes — such as platforms and high heels — rather than flats and sneakers, said Riccardi.
Diesel and fragrance licensee L’Oréal will introduce its first women’s-only fragrance, called Loverdose, in Europe in September, to be followed by a spring 2012 rollout in the U.S.
Jeans continue to be a foundation for the Diesel business. The women’s denim for spring encompasses six new styles that have been redesigned to flatter the body. Fits include the Grupee superslim, the Getlegg skinny, the Bootzee boot fit, the Highkee high-waisted fit, the Myguy boyfriend fit and the Flairlegg flare. Each fit comes in a variety of washes.
The company has made a special effort to create fits that are suitable for a global audience. “Asian bodies are different from Latin American bodies and we were growing so fast that we didn’t pay attention to those differences. We can now fit 85 to 90 percent of all women around the world,” said Riccardi.
The U.S. is the second largest market for Diesel, behind Japan. “I think he can make it the largest,” said Riccardi, looking pointedly at Cristiano Quieti, who on July 5 took over the ceo position at Diesel USA. Quieti is a 17-year veteran of Diesel, with previous stints as vice president of global business and ceo of Diesel UK.
Despite the ambitious sales targets for the U.S., Quieti does not envision expanding distribution to more wholesale accounts or opening new Diesel stores in the short term. “We would like to be very selective and work with no more than one or two key retail partners in the relevant markets,” he explained. “We are not looking for a large expansion of doors, but to grow within the accounts we have.”
In the U.S., 50 percent of sales come from Diesel stores, 35 percent from department stores and 15 percent from multibrand specialty stores. There are 36 full-price Diesel stores in the U.S. and nine outlet units. Worldwide, there are a total of 400 full-price stores and 80 outlets.
For the first six months of this year, same-store sales in the U.S. have increased well over 10 percent, said Quieti.
Within Diesel’s own stores, more space will be allocated to women’s product in the seasons ahead. “Over time, men’s has come to dominate the floor space, but we are reasserting the importance of women’s,” said Riccardi. Average floor space has been almost 60 percent men’s, but Riccardi sees the ratio going back to 50/50.
“We did a lot of research and went through the wardrobe of a woman this age to find what they need. In my old job the consumer was always number one and that is what we are doing here,” said Riccardi.
Prior to assuming the top job at Diesel last July, Riccardi was a 25-year veteran at Procter & Gamble Co., most recently as president of P&G Greater China.
Last year, Only the Brave Srl, which includes Diesel, Staff International, Maison Martin Margiela and Viktor & Rolf, posted sales of $1.32 billion euros, or $1.74 billion at average exchange, up 4.5 percent from 2009. The company does not break out figures for its separate brands.
For 2011, Riccardi said Diesel sales are projected to grow in the middle- to high-single-digits.
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