Diesel Enters Online Retail Venture

The Italian fashion brand is set to launch a new online retail partnership in North America with multiple partners.

MILAN — Diesel is set to launch a new online retail partnership in North America with multiple partners, including SapientNitro and eBay Enterprise, a unit of the U.S. e-commerce giant, formerly GSI Commerce, WWD has learned.

This story first appeared in the October 23, 2013 issue of WWD.  Subscribe Today.

According to a well-placed source, the Italian fashion brand is dubbing the project “an eco-system to achieve multichannel operations.” It will include all Diesel stores in the U.S. and integrate online and brick-and-mortar units, said the source. SapientNitro, an international interactive marketing, creative design and technology services agency, will be in charge of the platform and its design, while eBay will take care of logistics and customer care. The partnership is to debut on Nov. 1, while the multichannel, eco-system element will be operative in early 2014, said the source.

Until now, Diesel’s online store was operated by Yoox Group SpA, an agreement set to end on Oct. 31. Earlier this year, Yoox and Diesel said their partnership would “discontinue” at the end of 2013.

Yoox continues to manage Diesel’s monobrand e-commerce operations in Europe and Japan.

According to the source, Diesel’s decision to set up shop with the eBay unit was partly driven by eBay Enterprise’s ability to offer cross-channel integration through its platform. This includes functions like allowing of a customer to order a product online and pick it up in a store or order a product online, have it delivered at home and then return it to the store for exchange or fitting.

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EBay Enterprise is already well established in the apparel sector in North America, where it manages e-commerce operations for brands including Levi’s, Ralph Lauren, Quiksilver, Speedo and Timberland.

“As already announced in May, on the occasion of the signing of an agreement with Yoox, which strengthened the strategic partnership with other OTB brands — extending their duration — Diesel and Yoox decided to continue their e-commerce collaboration in Europe and Japan,” Diesel’s newly installed chief executive officer Alessandro Bogliolo told WWD. “They also agreed to consider opening other markets and to not continue their partnership in the United States, with a view to maximizing profitability for both companies.”

Privately held OTB, formerly known as Only the Brave, is the parent holding company of Diesel and controls brands including Marni, Viktor & Rolf and Maison Martin Margiela, as well as manufacturing arm Staff International. In 2012, Diesel had sales of 1.1 billion euros, or about $1.41 billion at average exchange.

“The decision taken jointly with the OTB Group, our strategic partner and long-standing shareholder, not to continue with the Diesel brand in the U.S. is in line with Yoox’s strategy to increasingly focus on the luxury segment,” said Silvia Scagnelli, Yoox Group investor relations and financial communications director. “We are pursuing this strategy through dynamic and profit-driven monobrand portfolio management; in fact, in the United States, diesel.com has an average order value 43 percent below our U.S. monobrand average.”

The U.S. Diesel online store was not a big revenue generator for Yoox. When the two companies in May revealed the decision to “discontinue” the North American partnership, Yoox said it accounted for “approximately 2 percent” of its 2012 sales.

According to the market source, the Diesel monobrand store is one of Yoox’s largest monobrand online stores in terms of revenues.

Aside from the diesel.com online store, there are other ties between Yoox and the Italian fashion brand: The largest single shareholder in Yoox itself is Renzo Rosso, the owner of Diesel parent OTB, through his Red Circle Investments, his family’s private investment holding. In a Sept. 24 filing with Italy’s Consob stock market regulator, Rosso said he held 8.6 percent of the Italian online fashion retailer, down from a previously held 9.3 percent.