A fresh start for Diesel

With a new chief executive-creative director duo at the helm, Diesel is forging ahead with founder Renzo Rosso taking a big step back. CEO Massimo Piombini details the brand’s updated strategy.
Image may contain Clothing Apparel Sleeve Pants Long Sleeve Human Person Denim and Jeans
Diesel

When Massimo Piombini visited Diesel’s Italian sneaker factory in June, five months after becoming chief executive, he faced an immediate dilemma. “I didn’t like the collection. I didn’t like the strategy behind it. I didn’t like anything,” says Piombini, who had left his Paris-based job as CEO of Balmain to join the Italian denim brand.

His challenge was to confront his new boss, Diesel founder Renzo Rosso, who often calls the brand his “baby” and at the time led creative direction at the label he founded in 1978. In Rosso’s office that afternoon, 59-year-old Piombini says he proposed that Diesel build a new dedicated sneaker business, hiring fresh designers, merchandisers and suppliers.

It was the middle of the global pandemic. Diesel’s revenues were headed for a 22 per cent slide this year from $900 million in 2019, capital spending had been halted, stores shuttered, employees laid off and furloughed, and executives — including Piombini — had taken 20 per cent pay cuts.

Rosso listened, Piombini says, and replied, “Okay. Go ahead.”

Rosso, who is 65, for three years had been on a mission to recreate the energy that defined Diesel in the 1980s and 1990s. Built with a rock-and-roll vibe and provocative often surreal advertising — campaigns have portrayed imaginary life in North Korea, imitated car crashes and showed same-sex couples kissing decades before it was normalised — Diesel saw its edge and its profits decline in the naughts as it sought a mass market by lowering prices, producing more mundane designs and aggressively expanding retail outlets. In recent years, it has emerged from bankruptcy protection in the US while Rosso stepped back in to oversee operations after spending years investing in luxury brands such as Maison Margiela, Viktor & Rolf and Marni through his holding company, Only the Brave Group, which is based in Breganze, a small town an hour west of Venice.

When the pandemic hit, the label had just begun a turnaround with a series of capsule collections with designers such as A-Cold-Wall’s Samuel Ross. Store traffic was up 7 per cent last fall. Rosso hired Piombini in December last year to “bring back to Diesel what it was in the 80s and 90s”, says Piombini.

A Diesel campaign from 1995, which showed same-sex couples kissing decades before it was normalised. 

Diesel

One big step for Piombini was hiring 37-year-old Belgian designer Glenn Martens, known for his avant-garde denim designs for Paris-based Y/Project in October. Martens is working on a Diesel capsule collection that will drop in March. His first full collection for Diesel will come for Spring/Summer 2022 and it will include new more elevated and expensive designs. While Martens is under orders to focus on products, Piombini is installing a new infrastructure to support them.

The plan melds an increased focus on e-commerce, which has been the one bright spot in 2020 with Diesel’s e-commerce sales — which rose 40 per cent year-over-year in the second and third quarters — and a new system of roughly 10 brand hubs around the world. Piombini sees those physical hubs playing the role of community magnets, with local teams offering entertainment and activities. Travelling Diesel studios will create films and other content that will be served up to those local communities. In addition to the obvious fashion cities of Milan, New York, Los Angeles, Shanghai, Hong Kong and Tokyo, there’s Tel Aviv, Berlin, Bogota and São Paulo.

The pandemic quickly reversed the progress just as Piombini moved back to his hometown of Milan and began a weekly two-hour commute to Breganze. Beyond the necessary cutbacks, Piombini thought he saw deeper problems with how Diesel was trying to communicate with consumers. Advertising has been superseded by technology, social media and a society-wide desire for authenticity. Reaching today’s consumers requires entertaining them rather than pitching them, he felt. What followed swiftly became a repositioning of the brand that’s intended to recalibrate its carefree sensibility for a culture that is vastly different than the one in which Diesel emerged, when designer denim was a new concept. The aim is to be both local and digital, attuned to the cultural tastes and technology of the third decade of the 2000s as well as the complex world that consumers live in with multiple choices on how to spend their time and money.

“We want to have a physical presence and a cultural presence,” says Piombini. “My competitors aren’t Levi’s or Balenciaga. My competitors are the gym, Netflix. Diesel has to be a part of your life.”

Diesel's new CEO Massimo Piombini. 

Diesel

The stage for this attempted comeback is not the friendly one Diesel took 40 years ago. “The market is really crowded, and before they had a new different proposition,” says Mario Ortelli, managing partner of merger and acquisition and strategic advisory firm Ortelli & Co. “Nowadays, there are many denim brands and the competition is by far higher.”

Success, Ortelli says, means becoming one of a handful of top-of-mind brands. “You win or you lose. Now it’s more binary, the math.”

The new Diesel

When Piombini arrived at Diesel in January, he sat down with about 20 employees individually and asked them to tell him about Diesel. “Every story was different,” he says. This led him to feel that the brand’s mission was unclear, even internally. He hired the Los Angeles-based branding and entertainment firm The Sunshine Company to work on a new playbook, which he calls Project Sunshine.

The work included interviewing 10,000 consumers in the US, Europe, China, Japan and elsewhere, asking questions such as how they viewed Diesel, and who they saw as its rivals. The group derived, over six weeks, four archetypical customers that Piombini is calling the Gang of Four. These archetypes run the gambit from trend-hungry teens to middle-aged men and women who long ago established their personal style and seek designs with longevity. The groups are only for internal use at Diesel, intended to make employees aware of the “tribe audience” they are to keep top of mind — those who love high design; experimenters; “settled” who value function over trend; and individualists who value their own style above all.

Every employee at Diesel now has elements of this playbook at their desk, and Piombini expects them to know how their job relates to the Gang of Four and Project Sunshine. Employees are expected to be familiar with slogans and brand concepts, such as “denim is the social fabric of the world”, and to act with “brave behaviours” such as “stay curious”, “take chances”, and “get connected”.

“The onboarding of this idea will take time,” says Piombini, acknowledging that the shifts require extensive relearning for Diesel employees. “This is a cultural revolution for this company.”

The Covid-19 pandemic led Diesel, like many companies, to rapidly implement digital operations that might otherwise have taken years. With eight showrooms shut down around the world, Piombini hired a New York virtual reality startup, Obsess, to build a digital showroom, called Hyperoom, that allows store buyers to move through the brand’s Milan showroom much like Google Street View. Users click on arrows to move and can click a button to segue into the order placement system. Diesel is now completing a mobile version that will work on store buyers’ phones and iPads.

Hyperoom, the digital showroom Diesel built in collaboration with virtual reality startup Obsess. 

Diesel

This is a new approach for Piombini, who has spent his career as a luxury executive working at Balmain, Valentino, Gucci and Bulgari. He says he didn’t bring a single former colleague along to Diesel, and he says he has no intention of lifting the denim label into the luxury tier. “It’s not in the DNA of the brand,” he says.

Still, he brings luxury experience to Diesel, including the special relationship between brand and price, which in luxury has little to do with cost of production.

“When you think a brand is expensive, it’s because your perception of the brand is wrong,” he says. “When your perception is right, there is no price resistance. Suddenly paying €250 for a pair of jeans, you think you got a good deal.”

Piombini’s past with corporate-owned brands didn’t quite prepare him for working with a passionate founder accustomed to involving himself in every aspect of the brand. “It’s my daily challenge,” he says with a wry smile on a Zoom call. “When I joined, Renzo was the creative director of the brand — according to him. He didn't have that title on his business card.”

Rosso says he sees his role as encouraging and protecting talent, and that bringing Piombini and Martens on frees him up for other endeavours at Only The Brave.

“Today more than ever, I am busy on countless fronts, and the time has come for Diesel to have a full-time figure guiding and directing all the expressions of the brand’s lifestyle, from style to interior design to marketing, with modernity and new energy,” Rosso said in an email. “It is not difficult for me, emotionally. Diesel is and will always be my creation, Glenn will be free to forge his way, and I will be by his side to ensure the fundamental values and DNA of the brand are protected and enhanced.”

Piombini says it was Rosso’s idea to bring in a creative director. Rosso has been turning more responsibility at Only The Brave to his children and said last year that he is ready to share more control. With other brands owned by his privately held Only The Brave Group, he is often remarkably hands-off and willing to take risks on personalities. Rosso hired John Galliano to design Maison Margiela in 2014, when much of the fashion industry was shunning the designer following his anti-semitic tirades and a conviction in France for making racist remarks. Rosso has also proved to be loyal, often giving years to designers to find their stride.

Piombini is banking on Rosso’s agility — moves like agreeing to develop a new sneaker business in one afternoon. “The big groups are sometimes a little slow in their decision making,” he says. “We are very fast. My boss is on the other side of the building.”

He can’t say how much this new strategic and capital plan will cost Diesel — they haven’t quite figured that out yet, he says. But he is proceeding with one eye on a pandemic that is likely to be a scourge on business for another year. Piombini isn’t banking on a return to pre-Covid-19 business performance until 2022, which he predicts will perform at 2019 levels. “If the vaccines really work and are distributed around the world, maybe these numbers can be accelerated,” he says.

He has found a location in Shanghai for the first Diesel hub, but is finding it difficult to look for the other locations without being able to travel.

“Doing all this from my office is really frustrating,” Piombini says. “It’s like you have a car and it’s started with the key in the ignition, but you cannot go.”

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