MILAN — Currency fluctuations, the repositioning of Diesel and investments in Marni dented OTB’s profitability in 2015, on the back of a gain in sales compared with the previous year. In the 12 months ended Dec. 31, net profits dropped 36 percent to 3.5 million euros, or $3.8 million, from 5.5 million euros, or $7.3 million, in 2014.
Revenues rose 1.9 percent to 1.59 billion euros, or $1.76 billion, compared with 1.56 billion euros, or $2 billion, in the previous year.
“We are not a publicly listed company and we work on medium-long term strategies,” chief executive officer Riccardo Stilli told WWD. “We have voluntarily reduced revenues by almost 100 million euros [$111 million] as we streamlined Diesel’s wholesale distribution, which had deteriorated, so I think this is a beautiful result and we believe in the steps we have taken.”
Stilli also explained that “a part of the cost of products is made in the dollar area and the strengthening of that currency penalizes us.” Also, the group has “important” branches outside Italy, affected by currency fluctuations.
Dollar figures were converted from the euro at average exchange rates for the periods they refer to.
OTB controls the Diesel, Maison Margiela, Marni and Viktor & Rolf brands, as well as manufacturing arms Staff International and Brave Kid.
Last year, OTB revisited Diesel’s wholesale chain around the world. Taking a cue from artistic director Nicola Formichetti’s goal to “reboot,” elevate and reinvent the brand, the Italian fashion group has been investing in an ambitious plan to renovate its store network with a new concept, aiming for more intimate and sophisticated spaces. In particular, the group highlighted the opening of the new Madison Avenue store in New York as representing the new interior concept developed by Diesel with Japanese studio Wonderwall. Diesel also has been investing in its own online Web site and e-store, which has already registered double-digit growth, and engaging in operations against counterfeiting and cybersquatting. The watch license with Fossil, renewed last year, reported sales of more than $200 million.
In November, OTB completed the acquisition of Marni, taking full control three years after buying a 61 percent stake in the Italian fashion company. Stilli said OTB has worked on the development of Marni, investing in the brand’s first ad campaign, and the efforts are bringing results. “Marni is growing at a very good double-digit pace.” Last year, boutiques were opened in Milan, London and San Francisco. The first collection of eyewear under a new license signed last year with Marchon was presented during Milan Fashion Week. Marni last year also signed a license for the production and distribution of the brand’s men’s wear line with Staff International.
Staff posted gains with licenses of Maison Margiela, Marni Uomo, Dsquared2, Just Cavalli, Vivienne Westwood Red Label and Man and Marc Jacobs Men. Brave Kid produces and distributes children’s wear for Diesel Kid, Marni, Dsquared2 and John Galliano Kids.
Maison Margiela logged in growth of more than 30 percent, boosted by the arrival of John Galliano in 2014 and the presentation last year of the first couture and women’s ready-to-wear shows. Last year, Maison Margiela opened stores in Milan, Rome and San Francisco.
Viktor & Rolf exited the ready-to-wear business, focusing on the couture line, but Stilli emphasized that the brand is performing very well, and pointed also to growing sales of fragrances and eyewear. Underscoring the potential of the brand, he hinted at “new collaborations” in the pipeline.
Double-digit growth in ready to wear contributed to balancing out and diversifying the group’s portfolio, leading Diesel to represent less than 65 percent of sales.
Asked about a potential public listing, Stilli reiterated founder Renzo Rosso’s position: “We have nothing against the Bourse, the company is structured as if we were listed and we are ready. We’ll see, we look around us as we do for potential new acquisitions, but we rely on our cash. If the opportunity came along, why not?”