BREGANZE, Italy – Diesel SpA’s new CEO wants to close stores, raise prices and expand sneakers to reverse a denim brand that had its heyday in the 1990s.
Massimo Piombini, who took over Diesel in late January, days before Covid-19 was declared a global emergency, said the retailer’s 436 stores worldwide – some directly owned, some concessions – are ‘way too much, regardless of the corona virus.’ Instead of derailing his plans, the pandemic accelerates some elements of his plan.
“I think you can have a perfect representation of the brand with half that perimeter around the world,” he said in an interview with Bloomberg. His plan is for Diesel to have flagship stores in a number of hub cities, from New York and London to Berlin and Tel Aviv.
Diesel is part of the OTB group, founded by the Italian fashion entrepreneur Renzo Rosso, once called the “Jeans Genius” by fashion journalist Suzy Menkes. Other brands in the group are Marni, Viktor & Rolf, Maison Margiela.
Diesel remains by far the largest brand, generating approximately € 900 million ($ 1 billion) of the group’s € 1.5 billion revenue last year. In the 1990s, it became one of the best-known Italian-designed global lifestyle brands, first helping denim in a premium category.
Piombini said that Diesel has “transformed the concept of denim worldwide” with its reputation as a forerunner in cultural change and innovation. It was one of the first brands to show gay men in its ads and received critical acclaim for its ad of two sailors kissing each other in the 90s.
In recent years, it has become more of a mass market brand and has lost its market position. It has also struggled to participate in the rapid growth of casual, athletic clothing, such as yoga pants.
Last year, Diesel’s U.S. division went through a Chapter 11 bankruptcy process after a reversal by previous management had failed. Piombini’s appointment is part of a rescue strategy set up by founder Rosso.
Piombini, who previously ran the Balmain brand, believes he can restore Diesel to its former glory. In addition to store closings, he wants to refine Diesel’s range and improve the design and quality of the materials to create a more expensive, premium product that attracts a younger crowd.
He sees an opportunity for Diesel to increase his share of the lucrative sneaker market. It already sells 700,000 sneakers a year and Piombini hopes to quadruple that number.
Diesel’s merchandising and marketing are also refreshed, and the company is accelerating its digital transformation. E-commerce accounts for only 12 percent of Diesel sales, but sales are growing double digits. Last week it launched “Hyperoom”, a virtual showroom similar to its physical showroom in Milan, which will present its collections to outside suppliers at a time when travel is difficult.
By Flavia Rotondi and Deirdre Hipwell.