How are things going for the OTB Group?

The crisis shaking the luxury world is sparing no one. While LVMH and Kering have been quite affected and groups like Prada and Moncler, as well as brands like Hermès and Brunello Cucinelli, are resisting strenuously, others have mixed but still positive results. Yesterday, OTB presented its 2024 annual results, which perfectly illustrate how a group with a strong market position—gained in recent years mainly due to Diesel’s turnaround and the popularity of Maison Margiela—can navigate the many challenges of an increasingly chaotic market. Renzo Rosso’s group recorded a revenue decline of 5.2%, dropping from €1.9 billion in 2023 to €1.8 billion in 2024, due to a 5.7% slowdown in sales in the Chinese market and a 15% reduction in the wholesale channel, which weighed on overall performance. This decline impacted margins, which fell by 20.7%, mainly due to investments in retail expansion and innovation, and operating profit dropped to €44 million from €140 million in 2023. The Chinese market was one of the main challenges, with a 5.7% drop in sales, though they showed only a gradual recovery over the year. However, despite these difficulties, the group achieved encouraging results in other areas. Direct retail grew by 7.4%, accounting for 57% of total sales. The group also expanded with 61 new stores in the Middle East and Mexico, performing strongly in Japan and North America, with growth of 16.3% and 13.3%, respectively. Finally, Diesel sales rose by 3.2% at constant exchange rates, while Maison Margiela’s increased by 4.6%.

Overall, OTB’s short-term results appear affected by a challenging context, but the group’s strategy, strongly focused on retail expansion and growth in promising markets, demonstrates solid resilience. If the Chinese market recovery materializes and the retail channel continues to expand successfully, OTB could return to more sustainable growth in the coming years. According to CEO Ubaldo Minelli, despite 2024 being a complex year for the entire luxury sector, the group has continued to invest in its retail network, strengthen its managerial structure, and consolidate and grow the company. Additionally, a stock market listing is expected, possibly in 2026, provided that the economic environment is more favorable and the company’s financial figures are stronger. Of particular interest will be the rollout of the new eyewear collection produced by EssilorLuxottica, presented last year during the brand’s show. Minelli also stated that he is not concerned about the tariffs announced by Donald Trump, nor about the evolving landscape of department store distribution in the U.S., although he acknowledged that recent geopolitical tensions remain a source of concern.

As mentioned, OTB has opened 61 stores worldwide in 2024, including 28 in China, although in November, some reports from Jing Daily indicated that the group had closed some underperforming locations in the country. In the Middle East, the group signed a 25-year joint venture agreement with Chalhoub Group in June to strengthen its direct presence in the region, aiming to open 15 new stores over the next five years, including two planned for this year. In Mexico, the group established its own legal entity with the intention of opening around 50 new stores over the next five years, including 15 planned for 2025 for Diesel, Maison Margiela, and Marni. There have also been several investments in the production supply chain, including the acquisition of a majority stake in Calzaturificio Stephen, a historic footwear supplier, following the 2023 acquisition of leather goods manufacturer Frassineti.