MILAN — Fueled by a strong performance in 2021, the OTB group has laid out an ambitious plan for the 2022 to 2024 period, planning to cement its standing in the luxury arena as “The Brave & Alternative Luxury Group, and also open up to other brands that embrace our philosophy,” said chairman Renzo Rosso.
A key step to this end was the acquisition of Jil Sander in March 2021 from Onward Holdings Co. Ltd., and OTB chief executive officer Ubaldo Minelli proudly said that in nine months, the company has already reached break-even and generated cash.
Defining 2021 as “a richly satisfying year during which we reached — and in some cases beat — all our targets in particularly challenging economic and social conditions,” Minelli on Wednesday reported OTB revenues that returned to pre-pandemic levels and that showed significant improvements in terms of profitability.
In the 12 months ended Dec. 31, net profit amounted to 142 million euros, including non-recurring items. Excluding these, profit amounted to 61.4 million euros, which compares with 900,000 euros in 2020 and 1.6 million euros in 2019.
In an interview with WWD, Minelli attributed this jump to the structural changes made over the past two years, which have helped improve efficiency.
In 2021, turnover, including royalties, totaled 1.53 billion euros (excluding non-recurring revenues of 130 million euros), up 16.2 percent compared with 1.31 billion euros in 2020 and in line with 1.53 billion euros in 2019.
Net sales totaled 1.45 billion euros, up 18 percent compared with 2020, driven by the luxury division, which comprises the Marni, Maison Margiela, Jil Sander and Viktor & Rolf brands.
Minelli said laying the foundations over the past few years has helped the group be in a stronger position that will allow it to target 20 percent year-over-year organic growth and to reach revenues of between 2.4 billion and 2.5 billion euros in 2024.
He underscored that year-over-year 20 percent growth “is more than double what analysts estimate for the sector” and that in 2024 “none of the OTB brands will have reached its full potential, which means we see that goal as a starting point, not a point of arrival.”
“Our production and distribution platforms, cornerstones of our industrial model, will certainly be one of the bases of our development. In 2021, we also decided to reorganize the governance of the supply chain, which is now fully under our responsibility,” Minelli said.
The year 2024 is also one that Rosso in November identified as a possible window for an initial public offering of the group. Asked if there were additional comments, Minelli confirmed OTB is evaluating this option, which would allow it to raise additional funds to strengthen its growth or to continue to be “a non-conventional aggregator of luxury brands.”
Minelli was mum about potential new targets.
In 2021, OTB’s earnings before interest, taxes, depreciation and amortization, net of recurring items, amounted to 258 million euros, up 47 percent compared with 176 million euros in 2020 and up 36 percent on 2019.
Operating profit, net of non-recurring items, amounted to 94 million euros, compared with 13.5 million euros in 2020. In 2019, operating profit amounted to 17.7 million euros.
The luxury brands division surpassed pre-pandemic levels, growing 49 percent on 2020 and 55 percent on 2019, but the group does not break down revenues by brand.
However, OTB reported that Maison Margiela’s sales rose 25 percent in all geographies and all channels, and Minelli added that sales of the brand soared 107 percent in the 2019 to 2021 period. The group in fall 2019 renewed John Galliano’s employment pact for Maison Margiela. The designer was appointed creative director of the brand in 2014.
Minelli also touted the evolution of Diesel in the first year under the creative direction of Glenn Martens, “setting the foundations for a new development phase that will place the brand in the alternative luxury segment, and that is generating the interest of international clients.”
The company has been streamlining Diesel’s distribution and Minelli said the “requalification has been completed.” Sales of the Diesel brand in 2021 represented 45 percent of the total. Last month, Diesel appointed Eraldo Poletto its new CEO for North America. Globally, the brand is helmed by CEO Massimo Piombini.
The first concept store designed by Martens was unveiled at the end of last year in SoHo in New York, and an event will take place there on Friday.
This story was reported by WWD and originally appeared on WWD.com. Read the full story on WWD.com.
