Diesel Business Is Weak, Resulting In Surplus Revenue Of Parent Company.

Although Diesel's weakness in its biggest business led to the continued contraction in revenue of OTB SpA last year and from profit to loss, the Italy fashion group said that it planned to invest 200 million euros in the next three years based on a substantial improvement in its financial position and did not rule out mergers and acquisitions.

In 2018, OTB SpA continued to promote the "voluntary reset" of chief executive Ubaldo Minelli, and adopted "specific measures", including the bankruptcy and reorganization of Diesel business in the US, so as to create suitable conditions for the sustainable development of the group business.

He stressed that the current group's net assets and financial position allow "exploring new opportunities".

OTB SpA has been confirmed to be interested in acquiring RobertoCavalli SpA, a Italy luxury group now under the protection of creditors.

In the fiscal year ending December 31, 2018, OTB SpA revenue fell 5.2% to 1 billion 439 million euros, and the fixed exchange rate decreased by 3.2%.

The group points out that the designer's business covering Marni, Maison Margiela and Viktor & Rolf and the two garment manufacturers Staff International and Brave Kid have "positive overall trend and revenue growth".

The adjusted EBITDA decreased by 21% to 41 million 500 thousand euros a year.

Regular business recorded a net loss of 26 million euros, while in 2017 fiscal year, the group achieved a net profit of 3 million euros.

By the end of the year, net assets of OTB SpA were 885 million euros, and net positions increased by 32% to 111 million euros.

Apart from M & A, the investment budget of 200 million euros will also be used to strengthen the distribution of all brands of OTB SpA in various channels and markets, and to add 180 outlets to expand the retail network. In addition, it will also include the restructuring cost of Diesel, especially in the United States to rebuild its brand, increase its growth in Europe and maintain the strong momentum of Asia.

Diesel's high-end product line Diesel Black Gold will start from the autumn and winter of 2019 and merge into the main line, instead of the third party cooperation plan that the luxury brands have been involved in recent years.

So far, the brand has been launched by Diesel Red Tag planning jointly with New York high-end Chao brand Hoodby Air co founder Shayne Oliver and Y/Project creative director Glenn Martens launch capsule series. The series of cooperation with Russian designer GoshaRubchinskiy is also to be released in May.

OTB SpA also needs to find a new CEO for Diesel.

After the former CEO Alessandro Bogliolo and the October 2017 job hopping Tiffany& Co. (NYSE:TIF) Tiffany became CEO, the successor Marco Agnolin also left at the end of last month.

In the United States, Diesel Diesel USA Inc., which has 17 main stores and 11 factory discount stores, filed for bankruptcy in early March. The company made clear in court documents the main causes of sales collapse, successive losses, high rent and fraud and theft.

Retail sales have dropped by more than 40% over the past four years, from $125 million in 2014 to $72 million 500 thousand.

At the same time, the former management made a strategy to expand the gold area at great cost. In the 2008-2015 years, the capital expenditure of the company reached US $90 million, most of which invested in the physical stores.

Since 2008, Diesel USA Inc. has no longer recorded profits, operating losses totaling US $198 million over the past eleven years.

After the financial crisis, the company recorded the highest income of $221 million in 2012, and dropped to $104 million in 2018, of which wholesale sales fell from US $69 million in 2014 to US $19 million in 2018.

OTB SpA, founder and chairman of Renzo Rosso's son Stefano Rosso, is the chief executive officer of Diesel USA Inc..