Author | Yiling Pan
Edit | Sarah Shannon
Italian fashion group Only The Brave (OTB), created by Diesel brand founder Renzo Rosso, is a special presence in the current highly capitalized fashion industry. The businessman, who respects avant-garde creativity and believes in his own business instincts, has a unique investment vision and can always pocket the most avant-garde and bold brands in the eyes of "fashion essence".
Maison Margiela (formerly known as Maison Martin Margiela), a brand founded by legendary Belgian designer Martin Margiela, has turned a profit in recent years under the operation of OTB and reached annual revenue of 240 million euros in 2020. Marni is also gradually reviving its business under the leadership of the new Creative Director Francesco Risso.
In an exclusive interview with Vogue Business, Renzo Rosso revealed that over the next three years, the Group will expand at full speed in China, the world's most important luxury market, increase its investment layout, increase the market penetration of existing brands, and lead another pioneer brand under its latest acquisition, Jil Sander, and amiri, a california designer brand that is still niche, to actively explore the possibilities of this market.
In the first quarter of 2022, OTB Group will unveil its first brand hub in China at JC Plaza, a high-end commercial complex that will be renovated on Nanjing West Road: Maison Margiela, Jil Sander, Marni and Amiri will line up to echo the Bulgari, Hermès and Louis Vuitton stores on the street opposite Shanghai Plaza 66. It will also be Amiri's first direct retail store in China and The first store in China since Jil Sander was acquired by OTB Group (the brand has a store in SKP, a luxury mall in Beijing).
JC Plaza is located in a prime location on Nanjing West Road. Image source: OTB
JC Plaza is located in a prime location in the city, formerly known as the Grand Mandarin Shanghai, the newly upgraded decoration design and the entry of top fashion brands will surely make it another desirable luxury destination on nanjing West Road.
"JC Plaza is a very significant project for our group – opening a whole row of our brand's stores on Nanjing West Road, including Maison Margiela, Jil Sander, Marni and Amiri, which makes them more than just independent stores, but a retail business cluster that can showcase the essence of our brand, experience and explore our brand culture for Chinese consumers." Rosso said.
Jil Sander 2022 Vacation Collection
More mature Chinese fashion lovers,
Bringing spring to "alternative" luxuries
Rosso is confident in the Group's future in China, as he believes that his avant-garde fashion brands, which he has classified as "alternative luxury," have emerged in China with a mature audience of fashion aesthetics on par with Western consumers.
"China is one of the largest luxury markets in the world, and today nearly 50% of luxury businesses take place here ... For me, Japanese consumers used to be the craziest and most fashionable Asian fashion customers in my heart, but now Chinese consumers are more than they are, which is a huge opportunity for the brands of the OTB Group. He said.
It is reported that OTB is expected to achieve good commercial performance in 2021, and the total revenue for the whole year is expected to reach 1.5 billion euros. While Japan remains the group's largest Asian market, accounting for 25% of total revenue, the share of commerce in the Chinese market and north America will increase year by year over the next three years.
Rosso's optimism over the past year and a half or so has been confirmed by Maison Margiela's development in the Chinese market. Last year, the brand opened its first flagship store at Shanghai Rui Ou Department Store designed with creative director John Galliano Visual Language. Since then, Maison Margiela's retail network has rapidly expanded to China's second-tier cities, such as Chengdu, Xiamen, Ningbo and Shenyang.
Maison Margiela Shanghai Rui ou flagship store. Image credit: Maison Margiela
Such a speed of opening stores is very rare for luxury brands in the post-epidemic era, but the high popularity and popularity of brands among Chinese consumers proves that this is indeed the best time. Maison Margiela's classic Tabi shoes, 5ac bags and the fragrance line controlled by L'Oréal Group have become popular items for Chinese fashion lovers.
Maison Margiela's bags and shoes have become popular items for Chinese fashion lovers. Image credit: Maison Margiela
"Very avant-garde brands like Maison Margiela, Marni and even Yohji Yamamoto and Dries Van Noten have begun to have more customers asking this year, and this wave of guests is not limited to first-tier developed cities, but also has a lot of young customers in second- and even third-tier cities." Chloe Sun, who has been in the professional purchasing business for 6 years, said.
Sun believes that this is related to the continuous improvement of the domestic fashion content dissemination system, "Many guests outside the first line have seen the sharing of Xiaohongshu and Weibo to subscribe." They may not have bought at first because they knew the brand, but were attracted by the unique design of a product, and then they began to have a deeper understanding of the brand. ”
Image credit: Maison Margiela
Needless to say, the rapid expansion of China's luxury market over the past three to five years has continued to prompt affluent consumers to become more mature and tasteful in their choice of fashion items. Avant-garde fashion design has gained a foothold among China's young consumer base, and the strong demand for self-expression and personality has made this group eager to offer the market to offer quality options beyond household names such as Louis Vuitton, Hermès and Chanel.
"First-tier and second-tier cities are the first cities to contact fashion luxury goods, and they are more rational and mature in brand consumption," said Homer Chou, a brand consultant and stylist. "[Many consumers] no longer consider logo driven brands when buying fashion brands, and the more unique the designer brands that are not repetitive with others, the easier it is to become the first choice of these people."
With a flexible, free, open and inclusive mindset
Embrace Chinese culture and creative talent
After capturing the changing needs of consumers, OTB, like other Western luxury brands active in China, has developed a series of localized business strategies to cater to Chinese consumers. Maison Margiela opened an official website e-commerce flagship store on Tmall as early as 2019, and officially debuted on Xiaohongshu and Douyin in April this year. Marni and Diesel continue to host a variety of experience-focused, consumer-oriented events in stores across the country to build a sense of belonging with buyers. Viktor & Rolf, which focuses on haute couture and special projects, has signed up Chinese celebrity Angelababy as a brand ambassador, aiming to increase the brand's visibility in the market.
Viktor & Rolf's Fall/Winter 2021 Couture Collection
Video credit: Viktor & Rolf
But what really sets OTB apart from its competitors is the company's flexible approach and openness to embracing Chinese culture and local creativity. As the pandemic strengthens the strategic position of the Chinese market in the luxury business, there is a general consensus on the importance of understanding Chinese culture and working with local talent, but few large groups are driving this from the source of their founders.
Renzo's passionate willingness to collaborate with Chinese creative has led his brands to fully tap the potential of Chinese culture and talent. "My requirement for each of my creative directors is to go and work with Chinese creative talent," he says. "I want our brand to have a lasting and deep connection with Chinese culture."
Before the pandemic began in 2020, Diesel had already launched a co-branded capsule collection in collaboration with Chinese independent designers such as Xander Zhou and Pronounce. Marni's creative director, Francesco Risso, after full contact with the Miao culture of China's ethnic minority, realized that this ethnic group has a century-old tradition of hand embroidery, which inspired him creatively. The brand launched the Marni Miao capsule collection in January this year, paying tribute to the Hmong community and its unique craftsmanship.
Diesel x Pronounce co-branded series | Image source: Diesel
Marni Miao series | video source: Marni
OTB is also one of the sponsors of the Yu Prize, an annual fashion-focused award created in 2020 by Chinese fashion investor Wendy Yu to identify and support emerging local Chinese designers. OTB offers award winners a 12-month mentoring program dedicated to sustainability.
Stay ahead of the curve and consistently profitable
It is the future challenge facing the Group
Overall, with businesses taking off globally and the fashion industry continuing to recover from the pandemic, OTB is very bullish on the future. Renzo revealed that the company plans to go public in 2024 and does not rule out the possibility of acquiring new brands to increase its "alternative luxury" portfolio.
Last month, OTB also joined the fierce meta-universe luxury war by creating a new business unit, "Brave Virtual Xperience.". This new, future-oriented division aims to "connect young consumers with fashion and lifestyle brands and create new business opportunities in the metaverse to accelerate OTB growth."
OTB opens a new business unit, Brave Virtual Xperience, to join the fierce meta-universe luxury wars. Image source: OTB
In bringing all of its brands to China and expanding further, One of the challenges Renzo is destined to face is how to balance the growth rate of these avant-garde fashion brands in this extremely diverse market, effectively serving consumers while maintaining their unique brand tone and true DNA.
Fortunately, in addition to his unique vision when it comes to brand investment, Renzo is also known for his determination and patience in protecting brand distinctiveness. "Running Margiela, the most important thing for me is to maintain the brand's true attitude and DNA. To this end, we must maintain very careful distribution channels and very limited production. He recalled. As we all know, he never lost patience with the 17-year-old brand, and continued to invest until 2019 to finally achieve profitability – which may be important for how he balances business performance and brand tone in the future.