DIESEL IN THE BLOODHow Renzo Rosso not only wants to reinvent his jeans brand

Photo caption: Diesel founder Renzo Rosso at his company headquarters in Breganze, northern Italy: "Numbers aren't everything."

Handelsblatt – Germany – 03 March 2019 1/9

"We weren't cool anymore"

Diesel founder Renzo Rosso on the reinvention of the jeans brand and irony as an advertising medium, the help of his friend, the Dalai Lama, and the question of why the fashion business is increasingly repulsing him.

Be brave" stands prominently on the floor in front of the entrance portal of its spacious company headquarters on the edge of the northern Italian village of Breganze. And who would be braver than Renzo Rosso himself? Not only because the man from The Diesel jeans brand was borne in simple circumstances and led it to world fame. Not only because its OTB group of companies (short for "Only the Brave"), with a turnover of around 1.5 billion euros, is now the third-largest fashion holding company in Europe behind LVMH and Kering. And not only because he also bought other brands and developed them powerfully. Marni, for example, or Viktor & Rolf. Five years ago, Rosso also brought John Galliano, who had been expelled from Dior because of anti-semitic failures, to the creative top of Maison Margiela, which has also been part of OTB since 2002 - and patiently supported him in his comeback. If Rosso believes in something or someone, he won't be dissuaded by anything. He's smart as a peasant and emotional at the same time. A lateral thinker, philanthropist and excellent observer of the Zeitgeist. Wine-Maker, father of seven children, owner of a football club, Instagram star. The 63-year-old currently needs his entrepreneurial courage more than ever, because Diesel of all brands has slipped into crisis in recent years. The US subsidiary even had to file for insolvency recently and has applied for creditor protection under the so-called Chapter 11 proceedings. So they don't want to give up the important market, but start again with a debt relief after the hard cut. Obviously too long was invested in too expensive retail stores. In any case, Renzo Rosso is experiencing his very own Diesel crisis. So there is plenty to talk about.

Mr Rosso, 40 years ago you founded the Diesel jeans brand. The name was then a tribute to the fuelthat was suddenly considered a real alternative in the midst of the oil crisis. Would you call a brand"Diesel" again today?

At the time, it was an incredibly good choice because Diesel was really the alternative energy source that was making its way from trucks to cars. We see ourselves as a driving and revolutionary force to this day. By the way, I believe in the renaissance of fuel, which admittedly would have to reinvent itself.

Does the Tesla outside the entrance belong to you?

That's the car of our CEO, Marco Agnolin. But I also have a small electric car at home.

In Germany, the diesel affair is the subject of constant controversy. Does the debate somehow even harm your brand? Is the German car industry possibly partly to blame for your company's problems?

You can't say that because, of course, we are clearly perceived as a fashion brand. But we also have to modernize them, which is why I returned to active business last year.

Photo capture: Vertical garden in the OTB headquarters in Breganze: "Today, values such as compassion, decency and esteem are completely neglected."

Now you can get more involved again in the operational management of your widely ramified OTB holding. What was the exact reason for your return?

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We had become a bit old-fashioned, just not cool anymore. We are changing that now. I think one of my strengths is focusing on the product. And there we are again much fresher and more modern. In our statistics we can see that the young target groups of 15 to 25-year-old customers in particular have increased sharply again.

What exactly went wrong?

Perhaps we were too fixated on mass. After I left the management nine years ago, the figures were still growing. But numbers aren't everything. So I even streamlined distribution. As a listed company, I should never do that, but I cut sales by around 275 million euros. We have to get away from all the discount battles, discount offers and residual ramps. And to be honest, this is the first time in our history that we have had declining figures. How do you think our top managers found that? But Diesel must become desirable again.

And ... Do you already see successes?

Since the beginning of the year things have been looking up again, but last year was really bad. Not a week passed in which I didn't have to fight against all those idiots out there. And it also takes time for customers to understand you too. In this time one must pay the bill for the omissions of the past.

Your subsidiary Diesel USA even had to file for bankruptcy recently. What's the next step?

This is a so-called Chapter 11 procedure, with which we voluntarily applied for the restructuring of our debts there.

That means that you have a restructuring plan ...

... and of course we will continue the business and reorganize ourselves in parallel. It's only about parts of our retail.

What will change in general?

When Diesel got into the crisis there were two solutions: to make the product cheaper and to position it more broadly, which in every respect would have been a rejection of quality and does not correspond to my attitude. In addition, such a step would have burst capacities. So I decided to position the brand higher, accept large sales losses - and suffer for the time being.

Will the product also change? Diesel was long regarded as a brand for real guys.

Hmmm, yeah, okay. Nevertheless, the female side and culture in my company and my family have always been very important - not only because five of my seven children are girls. I just think women are stronger than men. My dream would really be that our clientele would be half male, half female. At Marni, by the way, 95 percent of our customers are female.

Photo cature: Renzo Rosso in his office (above), work of art made of old clothes by Derick Melander in the foyer: "I love going unusual ways".

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Photo capture: "You won't find a designer with a simple character anyway. They don't exist."Photo capture: "Of course I have to be tough." Fashion of the "Rosso brands" Marni, Viktor & Rolf, Maison Margiela and Diesel (clockwise from top left).

How has #MeToo changed the relationship between the sexes? How do you yourself feel about the movement?

I'm very happy with the digital world today because technology means transparency. Nothing can be hidden anymore. There was so much corruption and abuse of power. That's over now. And that's a good thing. There are fewer and fewer gender differences.

You are now 63 and look much fresher than many managers of the younger generation. What has changed? What's wrong with the man himself?

Oh, you know: If you work with an incredible number of young people like me, it also keeps your head young. And I have seven children who really keep me on my toes. I was 21 when my first boy was born. My smallest child is now three. That keeps you really fit, because they all bring their friends home with them, their music, their films, their culture.

Diesel advertises with "Only the Brave". What does it mean today to be brave - as a man, a brand, a company?

For me it means sometimes having to make difficult decisions. Remember what the conversion of Diesel cost me. If it wasn't courageous! I don't know if there are many others who would dare. I am very happy how Diesel is developing today, but I am not satisfied yet, I want more. Our #hatecouture campaign, for example, was a great idea, but we should have used it much more effectively. Everyone thought the campaign was cool, but commercially it wasn't successful.

What was the reason?

We were able to win great celebrities like Nicki Minaj, Gucci Mane or Bella Thorne as testimonials. They all chose negative comments from their Instagram followers, and we printed them on selected pieces from a Capsule Collection. The idea of the campaign was that the verbal hatred that is being displayed in the social media is now self-deprecating up front and therefore debilitate.

But it was also exciting.

Of course, celebrities are great multipliers, but the special thing about the campaign was that every customer could go to a Diesel store, buy a T-shirt or sweatshirt and have it personalized with their own hate message.

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The whole world could have participated. But that didn't work out. And that was my mistake. I was not one hundred percent present in this phase.

Is irony still an important means of communication for Diesel?

For me personally in any case. With me, not a day goes by without irony. Even in a very tough meeting I manage to be ironic. Pretty typical for me.

Last year you flew to New York to advertise and sold counterfeit jeans, fake jeans with the inscription "Deisel", in a pop-up store. Was this your idea?

Oh yes! I was so fed up in America, where I had dozens of lawsuits against counterfeits and the online storesbehind them. We won every trial and were even awarded a few million dollars in damages. But that made meso tired that I thought: Hey, let's beat them with their own weapons!

Their fake fakes are now offered in online auction houses for more money than regular Diesel jeans. On the other hand, jeans are everywhere today: some fashion labels from the high fashion sector refine them at prices of over 1,000 euros. Is that okay?

I love such individualized things - just like the vintage market. Both are only for really strong brands. We also invented "Red Tag", for which we work with great designers. In the end, however, the products are only available in hand-picked Diesel stores.

In your opinion, what has changed in the global fashion market in general?

Digitalization has changed everything - from production technology to speed. And with digitalization, our entire communication has long since changed, including social media ...

... where you are very active.

Because I enjoy it. Because my children are there too. Take a look at Instagram! It's only been a few years since all the brands understood: We have to be there. Meanwhile, there are no more who don't post their stuff there every day. If I don't use Instagram, I have virtually no voice.

Do you post everything yourself?

Most of it is, yes. Sometimes someone looks at it - just to be on the safe side. I also want to be real there, authentic. My account is one of the stupidest accounts you'll find on Instagram because it's made without any financial ulterior motives.

That's what everybody says.

But the account is really me. I want to transport my soul there.

Even your posts are sometimes maliciously commented.

When someone leaves a negative comment on my Instagram account - which I've gotten used to - I reply quite often. I ask what the person wants to do with it, or even explain myself. In 99 percent of the cases an apology follows.

With 152,000 subscribers, you're an Instagram star yourself

There are far bigger players. I am only a small Entrepreneur.

You love yoga, enjoy nature, have a vineyard. How does all this fit in with the ever faster spinning luxury carousel?

Recently I received a letter from Martin Margiela ...

... whose brand you also took over a few years ago and which is still regarded today as very shy of publicity.

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He wrote me that he would continue to withdraw from this fast-moving world. The growing pace, social media and all that stuff made us lose our dreams and desires. He is so right!

John Galliano was kicked out of Dior after an anti-semitic outburst - and found a new home with Maison Margiela as chief designer. Weren't you afraid of getting into his Shitstorm yourself?

He is such a wonderful designer. We met a few months after his therapy and I knew immediately that he was the right one. You know, you won't find a designer with a simple character anyway. There is no such thing.

But you didn't hire him to provoke the rest of the industry, did you?

That wouldn't be a strategy! John is simply avantgarde. In the beginning, of course, he had a lot of problems of his own, including physical ones. But it wouldn't have made sense to exert pressure. Now, in his fourth year at Maison Margiela, the brand is really going up again thanks to his work. For me, he's not just a creative director, but a member of the family.

Would that also be possible in other conglomerates like Kering or LVMH?

I can't judge that, especially since we're much smaller than the corporations mentioned.

Besides Diesel, you own luxury brands like Maison Margiela, Marni or Viktor & Rolf. How do you discover the right designers for the right brand?

I observe many very early on. And then I really talk extensively with a candidate about everything: from individual cuts to the soul of a brand, from product design to advertising campaigns. That's how it was with Francesco Risso at Marni, for example.

Would you buy more brands?

Sure! When a good opportunity presents itself. And we always get offers on the table.

How do you make a brand generally successful today?

Ultimately, every company lives from its product. With me it was added: I have largely kicked out the first management level. They were all about numbers. What was missing was passion ... and the will to always reinvent oneself. We are now right in the middle of this process. That's not easy.

Photo capture: Picture wall in Renzo Rosso's Office, Diesel advertising: "With me no day passes without irony."

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Photo capture: RENZO ROSSOwas born in 1955 in Brugine in northern Italy. From 1971 he attended the textile school in Padua. In 1978 he went into business for himself - and finally founded the jeans brand Diesel. In 1985 he paid out other shareholders. The company finally merged into his holding company OTB (Only the Brave), under whose umbrella Renzo Rosso has meanwhile brought together other fashion brands from the luxury segment, such as Marni, Maison Margiela and Viktor & Rolf. Diesel and OTB have their headquarters in Breganze. Renzo Rosso lives with his family in the neighbouring Bassano del Grappa.

Photo capture: Entrepreneur Rosso: "The last year was really bad. Not a week went by without me having to fight all those idiots out there."

Photo capture: "You can afford to eat a steak every day, you can't eat two anyway. So take care of the others, too."

Photo capture: The Diesel founder's office: "I often find it difficult to bear the arrogance rampant in the business."

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Would an IPO of your holding OTB still be an option for you?

I love the idea. An IPO could be a great thing for everyone involved - for the group and its managers, for my family, for our customers.

Do you have a schedule for that?

I just got back. Give us two years, and hopefully our figures will look much better than they do today. And then perhaps it would be the right moment to go public.

Your job seems to be exhausting at the moment, doesn't it?

Of course I have to be tough if I want to do my job well. That's often painful for me. I am very sensitive. There are many nights when I can't sleep and roll around in bed. You can't imagine how I suffer when things don't go the way I want them to. But I do not stop daring. I am such a positive person that I just keep going. That is the most important thing.

Where do you get this positive basic approach from?

I took over this thinking from my father, it is part of my upbringing. And there is a second father who inspires me very much: The Dalai Lama teaches me to think positively and to support people. He says: "You can afford to eat a steak every day, you can't manage two anyway. So take care of the others, too."

Who of all your celebrity friends, from the Dalai Lama to Bono, leaves you a little wiser after each encounter?

I have a very good relationship with both of them. When I'm with them, I feel that we think the same, that's very beneficial. They do some things better than I do, which I also see as an incentive. The more important people are, the more relaxed and inspiring they are. I always like to be on the same eye level. For example, the Dalai Lama and I share a similar view of life. It is a good exchange. Not only do I ask him for advice, he also asks me things. After all, we are both a part of this world.

You support a lot, you have for example financed the renovation of the Rialto Bridge in Venice and afford a football club. Why has it not become Turin, but the third league club LR Vicenza?

Pretty stupid of me, isn't it? Hahaha! It's the team of the small town I live in. There are about 100,000 people in the region, many of whom work for OTB. We are the largest local company. Well, and when the association went bankrupt, I was begged if I could help. So I let myself be convinced. But also the sport is a hard business.

What is your goal?

My dream is to manage a team that stands out from the other teams. Sure, in the end you have to win games. But it's also about the stuff that goes around a club. Events, communication, PR, positioning. I have lots of ideas. For example, I want to sell 49 percent of my shares to the city's most important entrepreneurs.

Why?

Because I want the team to really be part of this town. There are some interested parties, banks and so on. But most of them want to wait until the team goes to the first league. So I want to make this club a community project. I love to go unusual ways!

Your mother passed away last year. What did she give you to take a long?

She taught me how valuable life is, how important it is to help others. Today, values such as compassion, decency and esteem are completely neglected. It's all about money, power and success. For me, a handshake still counts as much as a written contract. That has something to do with respect and also with dignity.Probably I am one of the few who still think like that.

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Have you ever thought about quitting?

Of course I would like to retire ... first thing tomorrow morning! But seriously, of all the disciplines in which I am active, I will be the first to turn my back on fashion.

Of all things?

Don't get me wrong: the fashion industry is great. It keeps me alive, young, and ... yes: courageous ..., but it also demands a lot from me. It is often difficult for me to bear the arrogance rampant in the business. At least for me, with my simple upbringing, it is sometimes difficult to bear what happens behind the scenes.Sometimes, when I'm out and about during the fashion weeks, I wish I could just go home. Sometimes I don'teven feel like having a dinner. In general, I love meeting people, entertaining myself, getting a new perspective on things. But sometimes it's just too much for me.

Mr. Rosso, thank you very much for the interview.

Photo capture: His curls are now steel wool grey. Nevertheless, Renzo Rosso (in the middle) radiates more dynamism than most 25 year olds, Silke Bücker and Thomas Tuma found out during their visit to Italy. Rosso's eyes were not only beaming, when he offered wine from his own vineyard for lunch during the interview.

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