Despite the OTB Holding maintained positive results in 2016, and increased its net profits by 8.5%, Diesel has registered a slowed down performance.

The group, that has under its umbrella Diesel, Maison Margiela, Marni, Paula Cademartori, Viktor&Rolf, Staff International and Brave Kid, closed 2016 stably when compared to 2015. They registered €1.58 billion sales (€1.582 billion in 2015) with €68 million EBITDA (€68,5 in 2015) and €3.8 million consolidated profit (€3.5 million in 2015).

Their Brave Kid kidswear division closed 2016 hitting €40 million sales. The division produces and distributes kidswear under licensing agreements (Diesel, Dsquared, John Galliano Kids, Marni, plus recently closed a licensing agreement with Trussardi Junior).

The year was more difficult for Diesel, whose 2016 results also suffered from the strategic choice to reposition the brand in terms of distribution.

Milan Diesel Planet stire in Piazza San Babila

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In 2016, Diesel sales were about €960 million (about 60% of the group’s revenues), closing the year with a loss. As a result, the company announced they will focus on a restructuring and rationalization of its activities which are still in a study and analysis phase.

Alessandro Bogliolo, CEO, Diesel, commented: “This was a painful choice we started in 2014 and continued until 2016. We stopped working with stores whose revenues meant €89-100 million wholesale. This was a real sacrifice that gave us the opportunity to establish the basis for a selected distribution system we started working with in Italy and France in 2016; it will continue in UK and Belgium from the beginning of April 2017, and by end 2017 also in Germany, Austria and Switzerland. We will be working through this system that is more in line with our new product, but also considering the loss of sales happening through the wholesale channel in favour of the stable results we register within the retail channel (that now counts for 60% of our sales). Meanwhile, e-commerce has registered a double-digit growth.”

Diesel's new San Babila store in Milan
© Diesel
Diesel's new San Babila store in Milan

Continues Bogliolo: “Our recent strategy focused on a reduction of the existing stores and the opening of new ones.” According to estimates, their present direct monobrands are 200 (and reach a total of 800 stores if including those managed by third parties and concessions). “We don’t want to increase the number of the existing ones but we want to modernize or relocate the existing ones, in order to reach the 90% of our 200 monobrand ones.”

As part of the new projects Diesel is focusing on the collaboration as “style partner” for the A.C. Milan football team, a return to communication initiatives such as their new #makelovenotwalls campaign and the recent reopening of their Milan flagship store in San Babila according to a new rich digital format.

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The new 887 square meter Diesel Planet welcomes consumers into the brand’s new symbolic home. The shopping experience it offers is revolutionary and interactive. In addition to offering interior design inspired by the idea of an apartment with vintage furnishings, Persian carpets and wooden ceilings it also launches a new digital retail model with avant-garde technologies developed in collaboration with H-Farm employed at various touch-points to enrich the purchasing experience with interactive content and information about the product.

Diesel's artistic director Nicola Formichetti in one of Diesel's new interactive changing rooms
© Diesel
Diesel's artistic director Nicola Formichetti in one of Diesel's new interactive changing rooms
Fitting rooms 2.0 and next generation interacting working tables, whose advanced digital technologies are capable of independently recognizing the garments shown to customers. Sales staff are backed up, when they advise consumers on shopping for denim, by new devices such as the smartphone Samsung Galaxy A5 that provide full information on the characteristics of each model and wash.

Inside the Diesel Planet in San Babila, Milan, they also opened the Bistrot Glorious Cafè, an exclusive space dedicated to food, whose concept was developed in collaboration with the University of Gastronomic Sciences (Unisg) in Pollenzo, near Cuneo.



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