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OTB’s Renzo Rosso says small fashion firms need to be supported, not necessarily acquired
Speaking in Milan at the annual Pambianco-PwC Fashion Summit, Renzo Rosso, the head of Italian fashion group OTB, did not shy away from taking a small dig, to put it mildly, at those major international groups and labels that enjoy doing their corporate “shopping” within the Italian fashion industry.
“In our opinion, small businesses and artisanal workshops ought to be supported in other ways. We regularly work with a myriad of very small firms, with which we have forged extremely close ties, providing them with training, the kind of technology support a micro-business can't afford, all the tools they need to focus on sustainability - a highly complex and expensive business - and even direct financial support through our Cash programme, at interest rates far below those offered by banks,” said Rosso, adding that “instead of buying out a company, I’d rather help it in this fashion, leaving operational control in the hands of the entrepreneurs who founded it, with their hard work and passion.”
Rosso then underlined how large and multi-faceted the OTB group is, not without justified pride and adding a barbed remark: “I’m always perplexed when I read that a major fashion group doesn't currently exist in Italy. [OTB] is a fully fledged group. We have centralised all corporate functions to achieve greater synergy, creating a structure designed to provide maximum support in terms of services and advice to the companies that are part of the group. In 2021, we generated a revenue of €1.5 billion, and this year we’ll reach €1.8 billion. We are setting our sights increasingly higher. Apart from Diesel, OTB’s brands are all luxury labels, some of them growing at a rate of 30 to 40% year-on-year. The luxury sector is doing well, but we need China to open up again, since the country is set to account for 50 to 55% of global luxury goods sales in the coming years.”
Rosso singled out Diesel, in his opinion “one of the world’s seven/eight most sought-after labels right now. Over the last two/three years, we've done something which most wouldn’t dare do: we slashed our revenue by approximately €400 million in order to raise the brand’s positioning. There’s still much to do, but once the work is finished, Diesel will have become an amazing company, generating revenue in the billions of euro. I want it to become an alternative to luxury, a real casual luxury brand.”
On the sustainability front, Rosso said that, in addition to Diesel, OTB’s other brands will also begin to introduce garments fitted with RFID [tags], so that customers will always be able to trace their provenance. As for e-tail, Rosso, who was one of Yoox’s initial shareholders, underlined how Diesel was the first European label to launch e-commerce operations, in 1996: “We used to sell 16 pairs of jeans a day,” he said, grinning, “nowadays, we can no longer do without the digital side of the business, which will become bigger and bigger, but will continue to progress in step with the physical world.”
Regarding the possibility that in future OTB may open up to other sectors, Rosso commented: “We are trying with eyewear, and I would like [to approach] the beauty sector, but it’s very complex. I'm following a number of projects with our family holding company Red Circle. I'm fascinated by the hotel industry, wine-making and organic food. My goal for the future is for all of this to converge within one holding company.” With regards to OTB’s possible stock market listing, Rosso said: “We're definitely working on a future listing, as a way to ensure a smooth generational handover and to help the family run all our companies, by no means an easy task.”
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