Italy's OTB keeps revenue growth goal for now, despite coronavirus
Mar 10, 2020
Italian fashion group OTB, which owns brands including Diesel, Maison Margiela and Marni, is keeping its 2020 revenue target for now, despite a recent slowdown caused by the coronavirus epidemic, its chief executive told Reuters on Tuesday.
However, Ubaldo Minelli said that could change in April, after the end of the group’s first quarter. “I hope not, but I can’t rule it out,” he said.
OTB - which stands for Only The Brave - is targeting 12-13% annual average revenue growth, at constant exchange rates, in its 2019-2021 plan.
Minelli’s comments came after the group reported a return to sales growth and a strong improvement in profitability for 2019.
Revenues at current exchange rates grew by 6.4% last year to 1.53 billion euros ($1.75 billion), an increase of around 4.5% at constant exchange rates.
Core profit rose to 190 million euros from 41.5 million euros a year earlier.
“Results in 2019 went beyond our expectations because they included the turnaround of Diesel”, Minelli said, referring to the group’s main brand, which had weighed on 2018 results.
“This year also started very well”, he said, adding, however, that this had been followed by the coronavirus outbreak, which has spread from China, with Italy quickly becoming the hardest hit country in Europe.
On Feb. 22, a day after the first cases were reported in northern Italy, OTB set up a crisis unit to deal with the situation. Its tasks include quantifying the revenue and cost impacts for the group, and identifying steps to minimise them.
Minelli said if the situation returned to normal from Tuesday, the overall impact for the group would be negligible.
“But it is clear that this situation does not end today, so we wait and see,” he said, speaking two days after the Rome government imposed a virtual lockdown on the country’s wealthy north to try to contain the spread of the virus.
Minelli said that, as in the past, OTB was looking at possible acquisition opportunities.
“We have the means to be able to do this, thanks to about 900 million equity and lack of debt,” he said, adding however that “there’s nothing on the table today.”
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