Why the Diesel Jeans Founder Wants to Build an Italian Rival to Compete with LVMH and Kering

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The founder of jeans brand Diesel and owner of fashion brands Jil Sander and Marni has said he wants to build an Italian luxury conglomerate to compete with French groups such as Kering and LVMH.

Renzo Rosso, chairman of holding company Only The Brave (OTB), founded Diesel in 1978 at the age of 23 and went on to build a fashion company that employs 6,000 people worldwide across seven brands.

“Italy doesn’t have a domestic luxury conglomerate like the French,” he told the Financial Times in an interview. “My plan is to create one.”

OTB is considering an IPO and Rosso is recruiting bankers to advise it. “Of course our [market capitalisation] will be different from the big French groups, but my ambition is to show that Italian brands can come together and strengthen each other.

The European luxury industry has been caught up in some of the effects of sanctions against Russia after its invasion of Ukraine. In March, the EU banned exports of goods worth more than €300 (S$423) to Russia, effectively shutting down the luxury fashion trade.

But while the likes of Russian President Vladimir Putin are known to be fans of Italian luxury brands, Russia is not a primary destination for the industry.

It is only Italy’s 14th largest global trading partner and, according to the Italian National Fashion Chamber, the country’s luxury goods exports to Russia amounted to 1.4 billion euros a year before. the war.

“The lockdown in parts of China has been a much bigger concern for me than the war in Ukraine in terms of impacting our business,” Rosso said. Russia and Ukraine account for around 2% of OTB’s annual revenue, which grew to €1.53 billion in 2021 from €1.3 billion the previous year. It has no stores in either country.

Asia, on the other hand, is a key market for the group. It opened a branch in South Korea last year, and Japan alone accounts for 25% of its total revenue.

Rosso said a third of the group’s investments over the next three years would be focused on expanding into China. OTB currently has 80 stores in the country, where it employs nearly 1,000 people. It aims to double the number of stores and staff by 2024.

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