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5/4/15 Marni, Margiela Parent OTB Sees Strong Profits |
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April 30, 2015
By Luisa Zargani
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Marni, Margiela Parent OTB SeesStrong Profits
MILAN — Italian fashion
group OTB saw higher
profits and sales last year even as it focused
on integrating Marni, developing Diesel
through the work of artistic director Nicola
Formichetti and naming John Galliano to
helm Maison Margiela.
In the year ended Dec. 31, the Italian
fashion group reported net profits grew
almost fourfold to 5.5 million euros, or
$7.3 million, compared with 1.2 million
euros, or $1.6 million, in 2013.
Earnings before interest, taxes,
depreciation and amortization dropped 15
percent to 117.4 million euros, or $156.1
million, compared with 138 million euros,
or $182.1 million, due to currency
fluctuations.
Revenues in 2014 were in line with 2013,
closing at 1.56 billion euros, or $2 billion,
compared with 1.57 billion euros, or $2.07
billion, the previous year.
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Dollar figures were converted from the
euro at average exchange rates for the
periods they refer to.
“A large part of the drop in EBITDA is to
be attributed to the exchange rates last
year compared with 2013,” chief executive
officer Riccardo Stilli told WWD. He cited
the yen, in particular. “Japan, which accounts for almost 20 percent of our sales, has
always played a big role and continues to do so,” he said.
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The group controls Diesel, Margiela, Marni and Viktor & Rolf, as well as its
production arm Staff International and Brave Kid. The arrival of Galliano in the fall
at Margiela, owned by OTB and managed through French firm Neuf, has “already
has given a significant injection of appeal and to sales globally,” said Stilli.
The group last year reviewed its distribution strategy for Diesel, elevating the brand,
streamlining its wholesale accounts and renovating existing stores, which impacted
its performance. With a pun on Diesel’s motto “Only the Brave,” Stilli said he “would
challenge anyone to cut a retail value of more than 230 [million euros] or 240 million
euros [$306 or $319 million] in sales.” Diesel has just closed its Fifth Avenue unit in
Manhattan and is working on a new flagship on Madison Avenue, on the corner of
59th Street, which is slated to open by the end of the year.
New Margiela stores opened in Milan’s Via Sant’Andrea and in San Francisco. A new
Marni boutique will open in Milan’s via Montenapoleone at the end of May. Stilli
said there is a “good balance” across all brands between retail and wholesale, each
accounting for around 50 percent of total sales.
Stilli also trumpeted the integration of Marni, whose acquisition was finalized in
February 2013, and which recorded sales of 130 million euros, or $173 million. The
brand recently signed a deal with OTB’s Staff International for its men’s line and
with Brave Kid for a girls’ collection.
Stilli said OTB is increasingly offering integrated services and “very strong synergies”
to all its brands, centralizing its activities and that the effect will be even more visible
in 2015.
He noted that “one of the goals of OTB was to balance the brands because the group
was highly dependent on Diesel, while there is a diversification of the risk with a
varied portfolio. We are well-positioned on different [price] ranges.” Diesel today
accounts for 65 percent of group sales.
The executive touted a “good cash flow” of 105 million euros, or $134 million, an
increase of 36 million euros, or $48 million, compared with 2013. The company has
a new credit line of 200 million euros, or $266 million, and Stilli said the group is
relying on “firepower” and is “looking around at brands with an interested eye. We
are evaluating opportunities, but there is nothing concrete, we are still in a scouting
phase for brands of a certain size, nothing below Diesel in terms of positioning, and
that would fit with our portfolio.”
Last year, geographically, Asia accounted for more than 25 percent of sales; the
Americas represented around 20 percent, and the rest of the world the remaining 55
percent.
For 2015, Stilli envisioned a mixed scenario, pointing to Asia and Japan in particular
as showing more growth.
On a separate note, Stilli said restoration works on the Rialto bridge in Venice have
started, supported by the group with an investment of 5 million euros, or $6.6
million. Works are expected to be completed in 18 months.
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