AGENDA: Diesel fights to keep a cult image - Jeans brand Diesel is in danger of losing its streetwise image. Lisa Campbell finds out why the company believes launching a designer sub-brand, Diesel Style Lab, will keep it cool

The latest copies of Vogue and Elle must make depressing reading

for people in the jeans industry.

One of this season’s looks is part Greenwich Village, part Saint Germain

- think Audrey Hepburn dancing in black pipe-cleaner leggings. Another

is elegant, shapely silhouettes, cut in ’to-die-for’ fabrics such as

snakeskin and silk. And then, of course, there are combat trousers,

which are still out in force.

Good old-fashioned denims are nowhere to be seen. With jeans having been

shoved to the back of the wardrobe for some time, it’s no surprise that

the market for them is shrinking; four million fewer pairs were sold

last year than in 1996.

Diesel, which describes itself as ’a lifestyle brand with denim roots’,

insists the declining jeans market has nothing to do with its decision

last week (Marketing, September 3) to part company with ad agency Lowe

Howard-Spink. Nor did it prompt its move away from its jeans range with

the launch of an upmarket designer sub-brand: Diesel Style Lab.

The moves also coincide with the appointment of a new marketing

director, Luca Fuso, who takes over from the company’s founder, Renzo

Rosso.

’Everyone’s talking about the crisis in the jeans industry, but while

it’s true that jeans sales have fallen by about 8%, the value of the

market has only dropped by 2%,’ says Peter Schofield-Lawley, Diesel’s

commercial director. ’This is because while some brands, particularly at

the cheaper end of the market, have collapsed dramatically, those at the

designer end have grown. Diesel has increased its jeans sales by 35% in

the UK.’

Popularity risk

So why establish a new, higher-quality brand when Diesel is already

perceived as cult and cutting-edge? After all, Diesel does not suffer

from the Jeremy Clarkson Effect: the problem of older, unfashionable

types wearing certain jeans brands and so diluting their cool image.

Diesel may not be quite that mainstream yet but it risks becoming too

populist, according to Lawley. It currently has 30 stores worldwide and

is expanding rapidly. An ongoing survey of 100 men’s retailers by

fashion magazine Menswear has put Diesel in the top five brands for the

past four months, with more retailers clamouring to sell its

products.

While Diesel welcomes the opportunities, it is keen to avoid alienating

what it sees as its crucial market: stylists, opinion leaders and

celebrities.

’As the traffic and interest builds in the brand and the core product,

there’s obviously the feeling that we may alienate these people. What

the new brand does is show that we are not abandoning our commitment to

innovation; we’re not going mainstream and we’re not selling out the

brand name,’ says Schofield-Lawley.

Diesel has been aiming to establish two brands for the past 18 months by

making a clearer distinction in-store between its denim products -

streetwear aimed at the over-16s - and its high-fashion goods, the more

individual items aimed at the over-20s.

’The problem when a collection grows and diversifies is that it pulls at

the brand message. Diesel saw this coming and has taken action to

prevent it. It’s very important to have purity of message in fashion,’

says Andy Gilgrist, deputy editor of Menswear.

Diesel Style Lab will launch during London Fashion Week, with 30 to 50

stores, designed by Conran Design Group, due to open over the next two

years. The two brands will also be kept separate with different store

environments, logos and advertising.

The core Diesel range will see more emphasis on the famously

controversial branding campaigns by Diesel’s original agency,

Stockholm-based DDB Paradiset, rather than product advertising which was

the main focus for Lowe Howard-Spink.

Separate styles

Diesel Style Lab will receive a very different treatment, believed to be

more along the lines of Prada or Gucci ads: conventionally beautiful

models, rather than street models, shot by well-known photographers.

Instead of mainstream advertising, the range will feature in magazines

such as Arena Homme Plus and Wallpaper.

’It will also maintain its exclusivity by being sold in a limited number

of retailers. This is important for the development of the brand in the

long term and will enable us to keep the focus on innovation and

experimentation, which is Diesel’s strength,’ says Schofield-Lawley.

Observers point to a number of problems with launching two separate

brands.

Some question whether Diesel’s association with a clubby and juvenile

image will prevent it from being taken seriously as a fashion house and

suggest it may have been wiser to launch under an entirely different

name.

Others suggest the brand name has not been used enough.

Jeremy Bowles, former Diesel account handler at Lowe Howard-Spink, says:

’Instead of launching a completely new brand, perhaps Diesel could have

used its brand equity more.

’Once you split brands, you split resources, operations and budgets,

which tends to make everything much harder work.’

DENIM’S DECLINE

- Total jeans sales fell from 22 million pairs to 18.9 million in the

year to May.

- Sales change by brand in the year to May (%):

Lee               -12.9

Wrangler           -9.0

Levi’s             -7.8

- Value of total jeans sales fell 2% from pounds 609.5m in 1997 to

pounds 561.2m in 1998.

Source: ACNielsen

This article was first published on Marketing