How Can The Mysterious Street Tycoons Behind Off-White Build Super Waves?

"I started from scratch. I didn't have any money. I didn't know anything about the industry."

Davide De Giglio said.

The New Guards Group co founder and soul collector who doesn't like to interview has hatched many of the most influential brands in the luxury Street sector, including Off-White, Palm Angels, County of Milan and Heron Preston.

De Giglio wore a pair of exquisite navy blue sports pants and fluorescent green Nike Air Force 1 sneakers designed by Virgil Abloh, making him very different from other executives. He came to New York to attend meetings and attend an expensive Palm Angels fashion show. This is the first time that the brand has been doing activities outside Milan City, using a rough, artistic performance space in West Chelsea.

Only 22 years ago, his business had not done so much.

"When I arrived in New York, I had only 700 dollars in my wallet."

He said, looking out of the window, the gray and coffee dominated city.

"Now the word" retro "is everywhere. I started by buying a few big bags of second-hand T-shirts and cowboys, bringing them back to Milan and selling them to my friends.

He said.

When he saved up to twenty thousand dollars, the entrepreneur of Italy building became a small business entrepreneur after he graduated from Italy. He began to make his own cultural shirt. At the age of 22, he started the street brand Vintage 55, and was bought by PE DGPA Capital.

"From the beginning, Davide was full of enthusiasm, and his eyes were bright."

Marcelo Burlon said.

This cross-border Argentina immigrants also began to struggle in a grass-roots way. Later, they became friends with Riccardo Tisci and became a famous DJ in Milan. He worked with De Giglio and fashion retailer Claudio Antonioli to pform its newly started T-shirt brand from a brand influenced by its hometown Patagonia (Patagonia) and 90s night club culture into a fast developing sports brand.

Marcelo Burlon County of Milan was founded in late 2012. It is the first brand of New Guards Group, but Burlon is not a traditional designer. He is used to working with DJ and musicians. They are good at forming a community rather than working with designers, which has become the reason for the success of this street fashion group.

"When you work in a nightclub, you will understand who your audience is, because you are one of them."

Burlon said.

"I am not a brand. I am a real individual who becomes a brand. We are not inspired by nightclub community. We are part of this community.

We know what young people want, because we are these young people.

The same principle applies to Abloh, who graduated from civil engineering and later became the creative director of Kanye West. He co founded Off-White with New Guards Group in 2014.

Ditto Francesco Ragazzi, in collaboration with De Giglio and Antonioli, founded Palm Angels in January 2015. Heron Preston co founded the same brand in January 2017 with New New.

"We walk closer together with our peers."

Ragazzi said.

"The founders behind it have one thing to say, everything has not been carefully arranged, and they have been texting me for personal letters. This is my inspiration and my source of energy. It's not just about good clothes, it's beyond fashion, but a dialogue."

This is almost a clever business definition.

"The world you understand is from your attention," says Ragazzi, who is also the artistic director of Moncler.

"You send a sample on social media, and you will know if it will sell in an hour."

If the company is successful, what is also puzzling is its working mode supported by WhatsApp (Abloh says its main working tool is a "iPhone full of electricity", which calls its creative process a "real chat") and a revolutionary production platform. High quality Italy producers can produce their ideas and deliver them to the store within two or three weeks.

This is an era in which digital media reshape the expectations of consumers, and the luxury market is more eager for new things.

"It's like luxury and fast fashion."

De Giglio said.

In addition, the company has an international plan.

The persuasive point is that Off-White's first store is not in the four largest fashion capital of the world, but rather chooses Hongkong.

Indeed, New Guards Group is a more reasonable way to open a shop in Manila, then New York, Paris, London or Milan, but New Guards Group does not want to sell an American or European brand to the whole world, but wants to sell an international brand to the whole world.

Earlier this month, the brand launched a brand Kirin with DJ Peggy Gou, a Korean electronics company in Berlin, and plans to work with Asian creative people to collaborate with new brands.

"This is a unified world," De Giglio said.

"And there are many creative forces in Asia."

In 2018, New Guards Group earned 235 million euros, with a net profit of 6 million euros.

The group's sales are expected to reach 420 million euros this year, and there is no debt.

(because retailers are required to pay 30% of the deposit when they order, they have enough cash flow and no need to borrow money).

In addition to taking the lead in the rise of luxury street market and attracting a group of consumers who grew up with hip-hop music and skateboard culture, the growth engine of the future luxury market will come from the street. According to Bain & amp; Bain report, it accounted for 85% of luxury goods growth in 2017.

NGG equity share photo source: the other side offers

It is no wonder that many investors are interested in the company. At present, most of the company's shares are still in the hands of De Giglio and Antonioli. They occupy 46% of the shares, 7% of the shares are in Burlon, and a small share of the shares is allocated to the company's CCO Andrea Grilli.

"They are profitable and have reached a sufficiently large scale and growth rate to make them an attractive target."

Luxury analyst Mario Ortelli said.

"They clearly know what the market is going to do and are able to implement strategies effectively."

New Guards Group occupies the majority of each brand except Nicol and Carlotta Oddi's new knitting brand Alanui.

The group bought shares of Alanui 49% in December 2017 and reached a holding agreement with the brand.

In the interview with De Giglio, BoF's Vikram Alexei Kansara discussed in depth its entrepreneurial experience, the secret of New Guards Group's success, and the first innovative business model that established Italy with the current international and digital needs, as well as a long-term plan for an influential fashion group.

Why did you initially decide to start New Guards Group?

Davide De Giglio: Everything starts with Marcelo Burlon.

At that time, he was a famous PR and DJ in Milan. He was very close to Riccardo Tisci at that time. They were brothers, and Claudio told me at that time that Marcelo had the idea of designing a T-shirt series, but it was not just a clothing series. He wanted to spread the idea through iPhone, because he said, "later children will only communicate in this way."

And this is the initial stage of Myspace, Facebook and Instagram.

He said, "this industry is changing."

I also think so. I have the working background of sports brand instead of the traditional fashion industry. He thought about the design of T-shirt very much at the time, such as 360 degree printing, because I had relevant background. I told him it was a big challenge. So we started work very soon. After three months, we set up a company. We started sending many clothes to stars, musicians and artists. Many of them were friends of Marcelo, which is very important for building a brand community.

Off-White is your most successful brand. How do you know Virgil?

Davide De Giglio: my best friend, Andrea Grilli, once worked for Balmain and Dolce & Gabbana, and later became our partner. He called and told me, "I'm working with Kanye West in his first clothing series."

So I met with Kanye several times, he was a genius, but I also realized that there was a Virgil character beside him. He was always quiet and friendly. Marcelo was familiar with Virgil at that time. I asked him if he could try to cooperate with Virgil, because I thought he was an idea person.

Later, we met for coffee in New York. At that time, he was wearing a Ralph Lauren polo shirt with "Pyrex" and digital "23" and "13". I said, "if you want to improve your thinking and do not want to be a traditional street brand, we must choose the best cotton and use the best printing process to produce in the best Italy factory."

We started Off-White from scratch.

What do you have in common when choosing brands?

Davide De Giglio: in common, the founders of these brands are independent individuals. This is the most important thing. I never call them designers. I call them directors. They have different ideas. They can do a lot of things. Marcelo will tour with Loco Dice because he wants to play music for a long time.

Palm Angels's Francesco Ragazzi often crossover with art circles, and so does Heron Preston.

How did I choose them?

Sometimes it's a natural choice. Like Heron is a friend of Virgil, Francesco is also the artistic director of Moncler. At that time, we jointly made a branding project with Marcelo, and he showed me his first book.

He compared Giotto's angel to the fallen angel of Los Angeles, and his photo had a unique fashion perspective.

So I said, "it seems that you are an idea person, you also have the taste, your name is very pleasant to hear, Palm Angels, I also like this logo, let's start making a brand."

So we started the Palm Angels. We built about eight brands in three years.

I don't object to designers. I like designers very much, but the people I choose are still good communicator, they are not shy, they are artists, and have the ability to establish a community, and more people are willing to join this community.

When a new store opens, Virgil will appear. With the young people, he will sign the shoes on the spot, communicate with young people and take pictures. This is very important.

In the Palm Angels show, I met a young person living in Italy from Costa Rica. Before Francesco issued 20 invitations through Instagram, and this person received one of them. He flew to New York to see the show and rushed back to Italy this morning. I couldn't understand it at the time. Why do you have such enthusiasm? Are you crazy?

And he said, "you don't understand what this means to me, and I have the opportunity to be part of what I love. I feel so lucky that I bought a ticket to see the show."

Some people think that street popularity is going downhill.

Davide De Giglio: I think street culture is beyond fashion. This is the culture of our generation. I, Francesco, Heron, Marcelo, Virgil and so on.

We were skateboarding youth when we were young, but we have gone beyond the skateboarding culture. Today you can be very elegant and cool, and wear shoes and pullovers, instead of relying on suits to prove yourself.

This is a new way of dressing for me, even for executives.

I am an executive, and I wear sneakers.

I read an article about street froth that day, and I don't think there is a bubble.

In spite of this, New Guards Group is not a street brand group. Our brand Alanui is a wool brand, and it is priced as a luxury rather than a street price.

New Guards Group cares about the new way of doing things, the new way of making clothes, the new mode of communication, the new retail mode.

Our creative director is not a traditional designer. We designed 200 Series in 2018, which requires a completely new production system. We work efficiently and think very much.

The current consumers are hungry for new things, and are based on the updated rhythm of Instagram.

Davide De Giglio: indeed, it is impossible to wait for a few months to get what you want again. They want to get it right away, so we have to keep up with it. In order to do this, we have to change the way we work. You see, I have twenty thousand unread emails. I just received 12 WhatsApp messages. This is the rhythm of my work now. We all work through WhatsApp, because our work is faster, we can not wait for five hours and eight hours to get a reply, which will disrupt the pace of our work and work process.

Our design is also completed on WhatsApp.

Did Virgil show you this?

This is the only way I work with Heron, who lives in New York. It's also the way I work with Virgil in Losangeles, Virgil in Paris, Marcelo, Francesco, and they fly around, all in this way of work, so is Peggy.

The timeline of our production process is very short. Most of our employees are about 25 years old. So they are enjoying life. They are single. They work 24 hours. They reply to WhatsApp while they are playing in the nightclub. We create a chat group for each topic, such as "glasses". Now I am in 1000 chat groups, this discussion is more efficient, and it happens in real time.

What is the construction of the production and supply chain system behind this?

Davide De Giglio: as I said before, we designed 200 Series in 2018. How can we design so many series?

First of all, you need to be fast enough. We let our partners set up a quick response system for us. We have some cooperative factories to help us work 24 hours in a row, and we can ship overnight. A T-shirt only takes three weeks from design to distribution, and this is also a luxury and fast fashion for shoes and leather goods.

Of course, you can't do anything.

I offer some creative elements to our creative director. They are cooks.

We provide fabric, printing, embroidery, buttons and zippers to them, and the project manager is very close to the creative director. They will cook together.

If I give you tomatoes, basil, onion, olive oil and spaghetti, even if we use the same seasoning, I will cook dishes that are different from yours.

What is the structure of your company? How do you manage these brands?

Davide De Giglio: at the management level, we call New Guards Group, then we have brand and creative director, they hold their own brands, such as Virgil is the core of Off-White, Marcelo holding part of County of of, and it is part of the company.

They are partners, and 50% of my work is when they are psychological counselors, and the other 50% are their personal assistant. I try to make more things move. If Virgil wants to make perfume, I will find a team to find a new contact network.

If Francesco wants to make a show in New York, then we will talk to the producers, find the venues and send them to the team. This is my job.

Claudio manages sales. Now we have Andrea as our partner. He is responsible for retail and wholesale business. Together, it happens very naturally. We are friends and we all have tattoos.

We are part of an organization.

But brands are completely independent. They have different teams and different corporate systems. Of course, they will share some supply chain, operation, finance team and production team.

How do you plan to make this company develop?

Davide De Giglio: we have different development plans. We really want to try different retail modes.

But do you know what my dream is?

I want to expand our business in Africa.

This is one of my latest obsession.

Africa is a niche market, but at the same time, it may also be a great market opportunity.

You know, in the process of talking with Virgil, we chatted with DJ Black Coffee in South Africa and heard him share what happened there. I had more interest in opening shop in Africa than in Milan.

If you look at what is happening in Manila or Kuala Lumpur or Melbourne, this is a bigger opportunity.

Most of your brands still come from Europe and the United States, will this change?

Davide De Giglio: we are preparing to launch the brand of Peggy Gou, she is Korean, we are also ready to start a Japanese brand and Chinese brand.

Therefore, this is very important for us. This is how to consider the overall situation and find out the difference.

In a traditional fashion brand, if you want to cut into glasses or perfume or cosmetics, you have to wait until your brand is mature enough, but you know, when you get to this state, it is estimated that you have opened a retail store. If you open shop in Milan or Paris, London and New York, it is a long process. This is not what we want to do. If you have an idea, such as Heron having a perfume idea, I will support him.

After six months in Off-White, we opened our first physical store. We opened our shop in Hongkong instead of Milan New York or Virgil's old home, Chicago.

Today, I was talking to Andrea. He said, "I'm going to Vietnam, because after studying the social media, he found that we had the opportunity to open a shop there."

I now have eight brands, not one shop in Milan, but in Manila, Jakarta, Kuala Lumpur and Melbourne.

I'm developing two new small factories, one in Indonesia and one in China's shoe factories.

This is not because the two countries are cheaper than Italy, but because they have the best technology, which has not been found in my country.

We also have partners in New Zealand, Marcelo has a graphic designer in Sydney, and our shoe designer is in Amsterdam.

Do you plan to sell some of your brands?

Davide De Giglio: I'm not going to sell it.

This is what I have been doing. I am more than 40 years old. I hope I can do this all my life. I am very interested in it.

But in fact, if we want to go further, we definitely need partners.

The company will have a business of 500 million euros next year.

Therefore, we are no longer the size of a small company. We need to build a group. We may well need help.

In spite of this, we want to maintain 100% independence, which is a wealthy company.

If you are not looking for money, then you are looking for someone who is knowledge-based, supportive, or knows how to develop a company. He can tell you, "if we do this, we may do better."

This person is smart enough to know what we are looking for, and they can also fill our flaws.

We want to find the right partners to help us.

I hope to have offices and factories all over the world.

For me, it is easy to open a T-shirt factory, but to open a headquarters in Africa is another matter.

Rumor has it that you are talking about cooperation with LVMH?

Davide De Giglio: I'm surprised. I did talk to them. We have a good relationship. When I go there, I can learn a lot, and this is very important.

We have a good relationship with Louis Vuitton, mainly because of Virgil, but we are surprised at this rumor, because you also know that there are still some data and so on. I don't know how it happened.

What did you learn in the process of entrepreneurship?

Davide De Giglio: my first brand started several years ago and opened 22 stores in China.

I said, "well, now that the company has been established, let's rule the whole ecosystem."

But I had to sell the company to a private equity fund because I needed cash flow and the company was growing too fast.

I am still fascinated by this story. In New Guards Group, we do not have any debts. Our cash flow is healthy. We do not borrow money from the bank. Our company is in a normal state.

But what I learned is not to slow down, you can develop very quickly, you need to have enough experience, and then you have to push yourself to the limit.

You know, I still get text messages at three or four in the middle of the night. I know the feeling of being on the Road 320 days a year. It's hard to feel apart from friends and family. Everything makes you feel stressed, because you have to do many things at any time, but it's also fun, so it's not a sacrifice.

What is the next step of New Guards Group?

Davide De Giglio: look at the French people. They have a very large luxury fashion group.

No Italian company is like us.

Italy has a tradition of clothing for thousands of years. This goes deep into our DNA, and in Milan it is very useful because we have factories.

If you are a child in St Petersburg, it is hard for you to start your own fashion brand there, and the production system is not there.

But we have such a support system, so I am looking forward to the next Peggy Gou brand. She combines her culture with our culture.

New Guards Group is not a fashion house or anything else. We are a platform.