OTB founder and chair Renzo Rosso talks the metaverse and IPO plans
Jun 24, 2022
Image: Andreas Rentz/Getty Images for Greentech Festival
The 15th edition of Greentech Festival in Berlin launched Wednesday with a gala at the former Tegel Airport, an area that is now called Urban Tech Republic. During the Green Awards gala, Renzo Rosso, the founder and chairman of OTB, received the 'Special Prize Italy‘, with Italy being this years' guest country of the festival.
OTB, whose portfolio includes brands Diesel, Margiela, Viktor & Rolf, Marni, and Jil Sander, has been focusing on innovation, digitalization, and sustainability for many years. Among other things, the group is planning a complete switch to renewable energies by 2050. In his acceptance speech, Rosso called for politics to regulate companies more, introduce tougher laws on sustainability, and to close loopholes for greenwashing in order to level the playing field. FashionUnited spoke to Rosso after he received the award.
Congratulations on the award. Could you speak a bit about what your sustainability efforts at OTB include?
Sustainability is a total project, so it starts with having the right people in your company, who think about how to run the business in a way that it emits less CO2, how to work without chemicals in the dyes, how to find sustainable materials and trims, how to use less water, source recycled paper, recycled plastic and so on. We are full of green in every aspect.
We also do a lot in terms of social sustainability. We audit all our suppliers, we want to see the conditions in which the workers work and know the salaries that they are paid. Our suppliers have to reflect the values and mentality of OTB.
We’ve also invested strongly in technology, so we can save costs and produce less. For example, we can now do our samples on avatars, so we can sell the clothes through our digital showroom. The consumers decide what they want to buy, and then the product is made to order.
Usually, you have 20-30 percent of a collection that is not sold and has to be thrown away. So by using this technology, we can avoid waste, we can produce less, and we can raise the quality and the standards.
And in terms of our stores, we looked at how much CO2 our lights emit and use sustainable electricity. That means costs increase by about 10 percent. So, sustainability takes a lot of time, money, and organization, while at the same time you don’t want to raise prices for the consumers.
Your financial results in 2021 were strong and up from the first pandemic year 2020. Now the war in Ukraine has forced you to close stores in Russia. How do you assess the situation?
Things are difficult. First Covid, now the war - the prices of the materials have increased, or you don’t find them at all. The transport costs have gone up. The situation is tough.
Even in this crazy situation, the company is doing quite well. We increased almost 20 percent this year. And the luxury business overall is doing fantastic, it is even up 30-40 percent.
With Glenn Martens, you’ve brought in a creative director who connects to the beginnings of Diesel as a denim brand, but who can also take it further towards luxury. You’ve also launched a new athleisure line. How do you see the future of Diesel?
I am quite happy for Diesel because we’ve made big changes there. We cut the long distribution channels and increased the quality of materials. We’ve brought back a lot of the production from overseas to Italy. Now with our RFID tags, the customers can see exactly where the materials came from, and where their product was made.
I am very proud of Diesel and its new creative direction. Diesel is my baby. You’re right, in the very beginning, it was a denim brand, but I see Diesel as a lifestyle brand today. That includes a very wide range of products, like cars with Fiat, motorbikes with Ducati, watches, jewelry, shades, fragrances, and home products. We just signed a contract to furnish 250 apartments in Las Vegas, so Diesel to me is very unique. It is a way of life.
What are you wearing today?
[He looks down at himself. It is a gala, so he is wearing a black suit, but combines it with a t-shirt, sportive socks, and sneakers]
I only wear my own brands, I can’t wear any other brands, because I know how we produce and I am very proud. [Points to the suit] This is Margiela, [points to the socks] this is Diesel, [points to the shoes] this is Jil Sander [points to the t-shirt] this is my birthday t-shirt [the shirt is black with stitching on the pocket that says 66, reminiscent of Route 66].
On stage, you mentioned your OTB Foundation. What exactly does it do?
[Renzo Rosso's wife, Arianna Alessi, sits next to him during the interview. Asked about the OTB Foundation, he passes the recording device to her. She is the foundation's VP]
Arianna Alessi: We work for women's rights and female empowerment in many countries around the world. Among many other efforts, we have a special focus on Afghanistan, where we support the ‘Fearless Girls’ project, providing legal, psychological, and educational activities to Afghan girls detained in juvenile prisons accused of committing “crimes against morality”, while they were only fleeing forced marriages or other types of violence. We support refugees, currently many from Ukraine, who have found work with us. We are teaching them Italian, integrating them as best we can. I hope that this war will end soon and they will be able to decide whether to return or to stay in Italy. But currently, we are giving them the opportunity to build a new life in Italy, which is important.
Renzo Rosso: I am very proud of our foundation. I think, as a modern company, you have a social responsibility. My father always said: “You were lucky, life has given you much.” So we have to help the community.
You recently met with Mark Zuckerberg and Italian business leaders at a meeting he described as 'Meta-Porter in Milan', what did you talk about? What are your plans for the metaverse?
The metaverse is a new way of life for the younger generation. Many people don’t even know what the metaverse is or means. The new generation wants to live a digital life, for example on Roblox, where you can interact with your friends, build digital houses and wardrobes, and change your clothes or make-up. I believe companies are obliged to invest in the metaverse and to create content for this new life.
We have built a company that my son Stefano runs [BVX (Brave Virtual Xperience), the business unit of OTB Group dedicated to the development of products, content, and experiences for the virtual world or ‘metaverse’]. BVX creates content for all our brands in the metaverse. We’ve already done an NFT with Diesel, which also generated quite a lot of sales. The first NFT was 700,000 euros in sales. Now we are underway to do something for Margiela, which I cannot yet talk about. But it will hit like an atomic bomb, I believe.
And what does the future of OTB look like? Which markets or acquisitions are you currently eyeing?
The group is very solid and growing organically. We can grow more through new markets or acquisitions, but I don’t want to buy just for the sake of buying. I am only interested in the luxury business because it is better to express sustainability and the margins are higher. I am still looking, but it is very difficult to find something because beautiful things aren’t for sale. But if a brand is in difficulty, we can give them incredible support.
You’ve announced OTB’s IPO for 2024, are you still on track for that timeline?
I would love that very much. The numbers look great for the end of 2024, beginning of 2025. I cannot wait for that moment, because I have so much to tell on the roadshow of all the beautiful projects we are working on in the company that the consumers don’t yet know about.
I am also looking forward to OTB becoming a public company because I want to make the consumers my partners, and all the people who work for me, too. When you are a public company, you have to be more transparent, which I think is a nice way to run a business. And also for my successors, my family, it will be easier to run a public company.