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Against all expectations, and despite a historic “shutdown” in Italy, the Italian group OTB, chaired by Renzo Rosso, is forecasting widespread sales growth of around 13% in 2020.
In the midst of the global Coronavirus crisis, and while the luxury sector seems drawn into an inevitable recession, the OTB group announces more than satisfactory results for 2019 and rising forecasts for 2020. Explanations.
Constant growth
OTB, the parent company of Margiela, Marni, Amiri, Viktor & Rolf and Diesel, now seems to be doing very well. Indeed, the firm has announced an excellent year 2019, with a turnover that exceeded 1.5 billion euros, up 6.4% according to an annual report.
A generalised growth for all the group’s brands: + 49% in turnover for Amiri, + 36% for Maison Margiela (its turnover amounts to 200 million euros), + 8% for Marni and + 2.6% for Diesel. “All companies, all channels and all regions of the world are developing. This is a real source of satisfaction”, underlined the group’s CEO Ubaldo Minelli.
An increase in turnover that will continue in 2020 according to the group’s estimates, which forecasts between 12 and 13% of additional growth in the coming months.
An awkward success
OTB’s success story seems to run completely counter to the catastrophic economic results generated by the global epidemic crisis of coronavirus. The announcement of these good results comes at the same time as the announcements of half-mast sales of other major Italian luxury brands such as Armani, Versace or Prada or even the postponement of their fashion shows.
A growth that detonates and surprises but which is not the result of chance either. At the head of this luxury empire, the Italian Renzo Rosso has been thinking since 2018 about “refreshing” the group and in particular about the overhaul of Diesel. The brand has thus closed many flagship stores and major accounts such as Macy’s, causing huge losses even though, as Renzo Rosso knows, “Cutting always entails costs at the outset” before leading to profitability.
So 2018 was the year of reorganization before the economic upturn: “We clarified the direction and priorities. We looked at positioning, distribution, mark-up, margins, risks … And from this work came the 2019 budgets, which we thought were very ambitious but which we have reached and exceeded” says Ubaldo Minelli.
The luxury group intends to continue its ascent in the coming months by evoking well-defined projects for 2020, including the reshaping of their business model: “We have focused Marni and Margiela on creativity, marketing and merchandising, that is to say, the levers for development” continues the group’s CEO.
These are very optimistic announcements, however they seem to be threatened by the health emergency into which the coronavirus has plunged the world. And this time again, the Italian group wants to be reassuring : “We have put in place a series of actions to reduce the impact as much as possible.
On the one hand, we have set up an internal crisis unit that meets every day to monitor the situation […] because as a group we are interested in what is happening not only in terms of income but also in terms of supply, since Diesel also produces in China and in neighbouring countries.
On the other hand, we are managing the situation tactically. For example, when it was announced that Armani would be parading behind closed doors, we cancelled 80% of the appointments we had for the Marni sales campaign that was due to start the next day. That’s why we decided to move it to Paris, where it is still being held today“.
To be continued…
Read also> Coronavirus: Mass cancellation of the cruise fashion shows
Featured photo: © OTB
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Against all expectations, and despite a historic “shutdown” in Italy, the Italian group OTB, chaired by Renzo Rosso, is forecasting widespread sales growth of around 13% in 2020.
In the midst of the global Coronavirus crisis, and while the luxury sector seems drawn into an inevitable recession, the OTB group announces more than satisfactory results for 2019 and rising forecasts for 2020. Explanations.
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Featured photo: © OTB
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