5/4/15 Marni, Margiela Parent OTB Sees Strong Profits |

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Strong Profits JUST IN LATEST ISSUE VIEW/DOWNLOAD By Luisa Zargani CFDA, COVET FASHION IN STYLING APP GAME MILAN — Italian fashion A- A A+ PRINT group OTB saw higher MORE profits and sales last year even as it focused on integrating Marni, developing Diesel through the work of artistic director Nicola Formichetti and naming John Galliano to helm Maison Margiela.

In the year ended Dec. 31, the Italian fashion group reported net profits grew almost fourfold to 5.5 million euros, or $7.3 million, compared with 1.2 million euros, or $1.6 million, in 2013.

Earnings before interest, taxes, depreciation and amortization dropped 15 percent to 117.4 million euros, or $156.1 million, compared with 138 million euros, or $182.1 million, due to currency Marni RTW Fall 2015 fluctuations. Giovanni Giannoni

Revenues in 2014 were in line with 2013, LATEST FINANCIAL ARTICLES

closing at 1.56 billion euros, or $2 billion, FINANCIAL compared with 1.57 billion euros, or $2.07 NACDS: Mass Beauty billion, the previous year. Retailers Search for Opportunities RELATED CONTENT: WWD Amid Turmoil Earnings Tracker >> FINANCIAL Dollar figures were converted from the Children’s Place Proxy LATESTBUSINESS ARTICLES euro at average exchange rates for the Fight With Activists periods they refer to. Heating Up

“A large part of the drop in EBITDA is to FINANCIAL be attributed to the exchange rates last VF Pushing Wrangler, Lee MORE ARTICLES BY Luisa Zargani year compared with 2013,” chief executive Beyond officer Riccardo Stilli told WWD. He cited Traditional Channels the yen, in particular. “Japan, which accounts for almost 20 percent of our sales, has always played a big role and continues to do so,” he said. wwd.com/business-news/financial/marni-margiela-parent-otb-sees-strong-profits-10120306/ 1/4 5/4/15 Marni, Margiela Parent OTB Sees Strong Profits |

The group controls Diesel, Margiela, Marni and Viktor & Rolf, as well as its FINANCIAL production arm Staff International and Brave Kid. The arrival of Galliano in the fall Children’s Place Proxy at Margiela, owned by OTB and managed through French firm Neuf, has “already has given a significant injection of appeal and to sales globally,” said Stilli. Fight With Activists Heating Up The group last year reviewed its distribution strategy for Diesel, elevating the brand, streamlining its wholesale accounts and renovating existing stores, which impacted FINANCIAL its performance. With a pun on Diesel’s motto “Only the Brave,” Stilli said he “would VF Pushing Wrangler, Lee Beyond Traditional Channels challenge anyone to cut a retail value of more than 230 [million euros] or 240 million euros [$306 or $319 million] in sales.” Diesel has just closed its Fifth Avenue unit in HUMAN RESOURCES Manhattan and is working on a new flagship on Madison Avenue, on the corner of Anne Klein Taps Liz Fraser as CEO 59th Street, which is slated to open by the end of the year.

FINANCIAL New Margiela stores opened in Milan’s Via Sant’Andrea and in San Francisco. A new G-III Completes Two-for-One Stock Split Marni boutique will open in Milan’s via Montenapoleone at the end of May. Stilli

said there is a “good balance” across all brands between retail and wholesale, each FINANCIAL accounting for around 50 percent of total sales. Japan’s CPI Springs Back on Rising Oil Prices Stilli also trumpeted the integration of Marni, whose acquisition was finalized in February 2013, and which recorded sales of 130 million euros, or $173 million. The FINANCIAL brand recently signed a deal with OTB’s Staff International for its men’s line and VF Q1 Net Contracts on Currency Impact with Brave Kid for a girls’ collection. FINANCIAL Stilli said OTB is increasingly offering integrated services and “very strong synergies” London’s FTSE 100 Dips 0.3% to all its brands, centralizing its activities and that the effect will be even more visible DESIGNER AND LUXURY in 2015. Cavalli’s New Owners See Eventual IPO

He noted that “one of the goals of OTB was to balance the brands because the group FINANCIAL was highly dependent on Diesel, while there is a diversification of the risk with a Sequential Brands Posts First- varied portfolio. We are well-positioned on different [price] ranges.” Diesel today Quarter Gains accounts for 65 percent of group sales.

The executive touted a “good cash flow” of 105 million euros, or $134 million, an increase of 36 million euros, or $48 million, compared with 2013. The company has a new credit line of 200 million euros, or $266 million, and Stilli said the group is relying on “firepower” and is “looking around at brands with an interested eye. We are evaluating opportunities, but there is nothing concrete, we are still in a scouting phase for brands of a certain size, nothing below Diesel in terms of positioning, and that would fit with our portfolio.” They Are Wearing: The Kentucky Derby Last year, geographically, Asia accounted for more than 25 percent of sales; the Americas represented around 20 percent, and the rest of the world the remaining 55 They Are Wearing: Spring percent. on the Street

For 2015, Stilli envisioned a mixed scenario, pointing to Asia and Japan in particular as showing more growth. They Are Wearing: Hyères Festival

On a separate note, Stilli said restoration works on the Rialto bridge in Venice have started, supported by the group with an investment of 5 million euros, or $6.6 MORE STREET million. Works are expected to be completed in 18 months.

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