Stefano Rosso, chief executive officer of OTB, the holding company of Diesel, Maison Martin Margiela, Marni, Viktor&Rolf, Staff International and Brave Kid, has a full plate, but he’s still looking for acquisitions that move the needle.
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“We’re not looking at anything in particular, but we’re looking at everything. We want to buy brands that have a global approach and potentially can have a strong heritage. They must have a size that’s scalable already,” said the 35-year-old ceo and son of Renzo Rosso, the Italian fashion mogul and founder of Diesel and OTB.
OTB is not interested in acquiring a small business under $10 million, he said. “We try to reach for businesses that have the potential to open retail stores. They have to be cool, they have to be alternative. We don’t look for a logo, we look for a lifestyle…We want somebody who fits into our solar system,” said Rosso.
During his presentation, the younger Rosso explained Diesel’s journey from monobrand to multibrand international global group, highlighting its past, present and future. Founded 36 years ago, Diesel distributes to more than 80 countries, has six regional hubs, more than 400 monobrand stores and 5,000 points of sale. The lifestyle company generated revenues last year of 1.1 billion euros, or $1.4 billion at current exchange. “Our history is full of important milestones,” said Rosso, pointing to 1978 when his father cofounded the company with Adriano Goldschmied inside the Genius Group and 1985, when his father decided to leave the Genius Group and buy his partner’s shares, acquiring 100 percent of the company. Today the brand has been relaunched under creative director Nicola Formichetti.
Rosso described the brand’s trajectory through three main phases. The first he termed a “laboratory” where they focused all their energies into creating product (especially denim); the second phase was focused on marketing, where they launched the “For Successful Living” campaign and truly built the business, and the third phase is “The War Machine,” where they’re driving a message and delivering the group’s multitude of products. The common denominator has been the presence of “a visionary leader,” who’s always taking risks, said Rosso, referring to his father. The company puts creativity and innovation into everything it does, from the product to the marketing to the way it sets up their stores, said Rosso. Rosso said that his father always had an expression, “Problems make me happy.”
“As a matter of fact, he must be really happy because we see problems rising every single day. But we see problems more as opportunity,” added Rosso.
He recalled when the company launched Diesel Style Lab, a fashion-forward line, in 2000, it didn’t have the skills to develop all the clothing it wanted to do because it needed better materials and more high-end construction. They went to Staff International to produce the line. After one season, Staff was about to go bankrupt. Diesel realized they could either go to someone else to produce the line or buy the company, and they decided to buy the company. “We bought Staff International and it opened up a big opportunity to get into high fashion and the contemporary world,” said Rosso.
He described Staff as a licensing company with different brands. “We develop them and sell them and we’re able to deliver super-high-quality Italian product worldwide,” said Rosso.
Through Staff, it acquired the licenses for first lines such as Maison Martin Margiela, Viktor&Rolf, Dsquared2, Marc Jacobs’ men’s line and Vivienne Westwood. It also got contemporary lines Just Cavalli and MM6 (from Maison Martin Margiela). The company does 1.6 billion euros, or $2.03 billion, in sales a year and has 7,500 employees. OTB, which stands for “Only the Brave,” has an OTB Foundation which raises funds to help Africa; Rosso is also the president of the Bassano Virtus soccer team.
Asked about the hiring of John Galliano, whom people thought was unhirable, at Margiela, Rosso said, “Honestly, I believe John Galliano is a talent.…I understand his past is his past. We as a group don’t comment on the past. We really would like to comment on the future of John Galliano. We believe the best and only way to do that is to see his next collection. My advice is to see what he’s going to deliver in January when he does his couture collection.”
Rosso said his mission statement is to build brands for a new breed of consumer. The strategy is to develop these brands, by challenging the rules and fostering creativity. The group doesn’t want to acquire brands just to grow; it wants to help them become something solid and sustainable. For example, he said, it took 10 years for Margiela to become profitable. He described OTB’s consumers as “modern, unconventional, fashion-savvy, who want to represent their lifestyle through clothing and that’s who we want to talk to; it’s somebody who lives fashion.”
The interesting thing about having a multibranded company is each brand keeps their identity and they don’t touch each other, he said. “We support them through the services and giving them direction, a strategy, and the resources they need.” The company’s goal is not to be a big group. “Our goal is to be an alternative, and the coolest group out there through an entrepreneurial approach. We have an entrepreneur who’s the founder of our group. We believe entrepreneurship has to be part of the people who work for us and develop our brands,” said Rosso.
As the company has grown, it has needed to rewrite the rules of the organization. “The more you empower people and the more they’re feeling the responsibility and doing something for themselves than for someone else, the more you have the entrepreneurial spirit. The entrepreneurial spirit is what has been driving the results in the past years. That’s what we really want to push forward,” he said.
Looking to the future, he said the economic and financial crisis hasn’t abated since 2008. The competitive arena has completely changed, and everything goes so fast. There are no spaces left anymore on the major streets. “If you’re not there with the right product at the right time and take the right space, you’re out of the game. That’s where the development of this business will be in the next 15 years,” he said. In addition, he said there’s a generational shift going on, and this generation is going so fast. “There’s a digital revolution going on. It’s a challenge but we see it as an opportunity. The challenge is trying to talk to this generation in the right way.”