Diesel Will Lay Off Workers To Improve Profitability

According to the world clothing and shoe net, Italy's first high-end loss in 2016.

Brand Diesel will lay off workers to improve profitability.

Diesel chief executive Alessandro Bogliolo has confirmed to Italy media that it will cut 37 headquarters positions in the next few weeks.

Employs 597 staff at the headquarters of Breganze Town, Venetian.

He acknowledged that the loss of about 10 million euros last year is the reason for their reassessment of their staffing structure. It also points out that the number of original posts has been reduced from 84 to 37 after internal resetting and mobility.

But this has opened a precedent for layoffs in the history of Diesel.

Alessandro Bogliolo said that the choice of layoffs is not easy, because "other roads are blocked" before they are "unavoidable", and "to ensure the future of the company and employees" is necessary.

He disclosed that at the same time, the company is investing more in digital and other businesses, "obviously we want to grow."

According to the data, Diesel's income in 2016 fell to 1 billion euros, only 960 million euros, and the proportion in the parent company and the Italy luxury goods group, OTB SpA, also fell to 60% from 65% in the past two years.

When the annual report was released in March, Riccardo Stilli, chief executive of OTB SpA, stressed that the group was deliberately lowering its reliance on the brand.

In order to solve the erosion of the high-end image of the brand by over distribution, Alessandro Bogliolo joined the company in 2013 and began to restructure its distribution channels to ensure the long-term success of the brand. "We want products to be sold in the best stores, which is where our customers will visit," Alessandro Bogliolo pointed out.

Last year, the reorganization of distributors resulted in a sharp reduction of 110 million euros in wholesale sales of Diesel.

Europe, the US and Hongkong are frustrated.

After restructuring, Riccardo Stilli said that the brand started well in the first two months of this year, and online sales also had double-digit growth.

Now Diesel has begun to make a more rigorous assessment of each point of sale. The unqualified brand will try to improve or cut it down directly.

In an interview, Alessandro Bogliolo revealed that taking French as an example, the knock-out rate of stores was 10%-15% after assessment. He pointed out that the aim was to improve the customer experience of sales outlets. This is especially important in the context of today's consumers who can buy Jeans online.

Diesel will begin negotiations with the trade unions on the issue of layoffs in May 15th.

Alessandro Bogliolo emphasizes that Diesel is not a "company in crisis".

Last year, OTB SpA did not fall into a marked retrogression. It depended entirely on the weakness of the luxury brand business to offset Diesel Diesel. The Group recorded a 1 billion 580 million euro income for the whole year, down slightly from 1 billion 590 million euros in 2015, with a net profit of 3 million 800 thousand euros, an increase of 8.5% over the 3 million 500 thousand euros in 2015, and the core profit EBTIDA 6800 euro was barely equal to 68 million 500 thousand euros in 2015.

Brioni and Roberto Cavalli SpA cut their spending by layoffs because of the cooling of luxury goods industry in recent years, but they all caused protests and demonstrations by employees.

Louis Vuitton, Louis Weedon and French workshop workers also took a rare strike in the beginning of April this year with a rise in salary. The background of the strike was a marked increase in the sales of the brand in the past year, and workers also received the equivalent of 17-18 months' monthly salary last year.

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