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Luxury Segment, Retail Channel Boost OTB Group 2022 Sales

Diesel, OTB Group
Pedestrians walk past the Italian multinational clothing brand Diesel store in Barcelona on April 26, 2022.
SOPA Images/LightRocket via Gett

MILAN — The luxury segment is driving growth at the OTB Group, which saw gains in profitability and revenues, and has laid out an ambitious three-year plan.

“We want and must grow through our ambitious plan, but it is one that can be reached,” said OTB CEO Ubaldo Minelli in an interview.

In the 12 months ended Dec. 31, turnover, including royalties, totaled 1.74 billion euros, up 14% compared with 1.53 billion euros in 2021. Net sales amounted to 1.63 billion euros, up 12% compared with 1.45 billion euros the year before.

Minelli said the group expects to reach sales of 2.7 billion euros in 2025 by growing organically. “Our target is 3 billion euros and we want to get there as fast as possible, but that will be a starting point, not an arrival, and it will allow us to have critical mass,” Minelli explained. “We will be happy with one or two acquisitions to consolidate the luxury segment but there is nothing concrete on the table now.”

Minelli confirmed that an initial public offering “remains our ambition and we are working to that end.” As reported, the timeframe could be 2024 or 2025, although the executive underscored that “it does not depend only on our performance but also on the financial markets — but that is our goal.”

In 2022, net profit totaled 105 million euros, soaring 71% compared with 61.4 million euros the prior year. The latter sum in 2021 excluded non-recurring items. In 2021, OTB took control of the Jil Sander brand, which was fully consolidated after nine months into OTB last year. In 2019, before the pandemic, net profit amounted to 1.6 million euros.

Jil Sander, Maison Margiela and Marni make up OTB’s luxury segment, which reported 32% growth from 2021. While not disclosing revenues by brand, asked which weighs more on the top line, Minelli said Maison Margiela, but he noted that this “is directly proportional to the date of the acquisition of each label.”

OTB became the main shareholder of Maison Margiela in 2002 and took full control in 2006. The group invested in Marni in 2013 and took full control two years later. “What is also stimulating in light of the IPO is that despite our growth ambitions, no brand at the end of 2025 will have arrived at 50% of its full potential,” Minelli said.

“The year 2022 was very challenging but, despite the war in Ukraine, the difficult global economy and the lockdowns in China, the brands of the luxury segment of the group continue to consistently grow,” said OTB founder Renzo Rosso. “Jil Sander, Maison Margiela and Marni are brands that are iconic and extraordinary as are their creative directors, they differentiate from all the others in the luxury sector and have special characteristics that make them increasingly more loved and appreciated by consumers around the world, as proven by the great results obtained this year.”

Sales at Marni were up 29% last year, under the creative direction of Francesco Risso, who has repositioned the brand, and thanks to strong investments in product and marketing and a loyal community — including the likes of Madonna and Doja Cat. Risso has embraced the concept of itinerant shows, from Milan to New York last year and in Tokyo on Feb. 1.

Maison Margiela revenues rose 24% last year compared with 2021. Under the creative direction of John Galliano, the brand inaugurated new Paris headquarters in Place des États-Unis in the 16th arrondissement last month. The former offices in Avenue d’Ièna will house other brands, Minelli said.

Jil Sander sales rose by 61%, designed by creative directors Lucie and Luke Meier, through synergies with the group and supported by OTB production arm Staff International, further elevating its luxury positioning.

“We are very confident this luxury segment will continue to fly,” touted Minelli.

In 2022, earnings before interest, taxes, depreciation and amortization amounted to 314 million euros, up 22% compared with 2021 and a 65% increase compared with 2019.

Operating profit totaled 134 million euros, a 42.5% increase compared with 2021.

Minelli said that all geographic markets, channels and brands reported solid growth in 2022, with China, despite the slowdown due to the lockdowns, South Korea and the U.S. the best-performing regions. Japan is OTB’s main market, representing 23% of sales.

Revenues in the Asia Pacific region were up 56%, despite the pandemic, and North America was up 29.6%, representing 11% of total sales.

Minelli said that a key pillar to support OTB’s growth is the development of its retail network. Last year, OTB opened 73 stores, of which 53 in the Asia Pacific region and 13 in the U.S. Among these, for example, are Jil Sander units in New York and Miami, and Maison Margiela in Honolulu, Hawaii, and Dallas. A Maison Margiela boutique also just opened in Los Angeles.

The biggest OTB retail point was inaugurated in July at luxury mall JC Plaza in Shanghai housing the stores of Jil Sander, Maison Margiela, Marni and Amiri, of which the group has a minority stake.

OTB consolidated also its presence in South Korea where, after the opening of the branch in 2021, it inaugurated 15 new stores in the country.

“We just approved the 2023-2025 plan, according to which we will open 178 stores in three years around the world. In 2023, the goal is to open around 40 stores,” Minelli said.

In 2022, the direct distribution channel accounted for 47% of total sales. “In three years, we expect this channel to represent 60% of revenues,” Minelli said.

Last year, OTB investments totaled 81 million euros, up 70% on 2021 and up 116% on 2019, with a particular focus on building the direct retail network.

This strategy has meant a drastic streamlining of OTB’s wholesale channel at Diesel, in particular. “We cut 400 million euros in wholesale revenues,” Minelli said.

As reported, Diesel CEO Eraldo Poletto left his role earlier this month but Minelli said he will continue to collaborate with the brand from the U.S. where he has returned for personal reasons. No successor has been named and Minelli downplayed the need for one.

“The path is clear, there is a strong management and committed teams, the goals are set, and Renzo and I are very much involved,” observed Minelli. “We are happy with Diesel and its success and its repositioning as an alternative to luxury that started with Glenn [Martens, named creative director in October 2020]. Despite the changes that took place during the pandemic, Diesel has achieved “extraordinary visibility globally.”

He noted that Diesel was in the top 10 hot brands ranked by the Lyst Index 2022, and that several products are hard to keep in stock, such as the 1DR bag. “This confirms we are on the right path,” he said.

Diesel now accounts for less than 40% of the total.

Staff International and childrenswear specialist Brave Kid registered a 32% and a 26% increase in sales, respectively.

Minelli explained that Staff International until a few years ago managed OTB’s licenses, but now its business model has been split in four units: ready-to-wear operations; shoes, bags and accessories operations; logistics, and the licensing business model.

Staff International has been producing collections for Dsquared2 since 2002 and the long-term license ends in 2027. “It has given us a lot of satisfaction and the acquisition of the brand is not on the table now,” said Minelli, responding to market rumors.

Important real estate investments include a new headquarters in Milan for Jil Sander and Marni, expected to cover 216,00 square feet and to be completed in 2025 in the new Porta Romana area.

This story was reported by WWD and originally appeared on WWD.com.

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Luxury Segment, Retail Channel Boost OTB Group 2022 Sales
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