There’s no looking back for the Caten twins.
Dsquared2 marks 20 years in business in 2015, but for founders, owners and creative directors Dean and Dan Caten, it’s “eyes forward” as they view this year as a pivotal turning point for the brand.
“Practice makes perfect. We’ve built the foundations, everything is in place and now we’re starting to grow. We know where we want to be,” said Dean Caten, during a joint interview with his twin at their Ceresio 7 restaurant in Milan.
“It’s her time to go and run,” added Dan, speaking of a figurative Dsquared2 customer.
The brand grew from one simple premise — that men’s fashion week was “a bore.” So they set out to fill the category with clothes that were anything but boring — and fill it they did, as they grew their company to reach revenues in 2014 of 205 million euros, or about $242 million at current exchange, up 10 percent compared with the previous year. The brand now includes comprehensive men’s, women’s and children’s lines, completed by handbags and footwear collections made in-house, and a successful licensing business, including eyewear, innerwear and fragrance agreements, plus a network of 33 stores and 600 points of sale around the world.
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To put things in perspective, sales in 2001 stood at 3 million euros, or $3.7 million, noted chief executive officer Gianfranco Maccarrone. The company is forging full steam ahead as the executive expects a double-digit growth in 2015.
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While the designers convey a free-spirited image and a playful attitude, they “have a very important vision of the numbers,” said Maccarrone. “They are easy to work with, they like their business and they know their business.”
To be sure, the affable brothers bristled at the suggestion that design was their main focus. “There are those days we have to talk numbers — they are not our favorite days, but we do,” said Dean.
“We are not money-driven. If we don’t like it, we don’t do it,” added Dan of their decision-making.
Ubaldo Minelli, ceo of Staff International, which has produced and distributed the brand since 2001, noted that the designers “have a precise knowledge of their consumer target. They have very clear ideas and an extraordinary lucidity. They’re very much in contact with their customers, and know how those tastes and expectations evolve — and they follow that evolution.”
Minelli said Staff International, owned by Renzo Rosso’s OTB Srl, has grown together with Dsquared2 and that the “profitable collaboration” is one of the longest in the industry, as the license was renewed in 2010 until 2027. Underscoring their “extraordinary talent,” Minelli said that, while driven by a strong desire for experimentation, they “remain faithful to their style and DNA. Hats off to them for their extraordinary consistency.”
The executive noted that, while the market is operating a “ferocious selection,” Dsquared2 wholesale clients are giving the brand “more space — we haven’t expanded our distribution, but it is much more penetrated.”
Minelli highlighted how the companies have worked on distribution “step-by-step and by priority.” Dsquared2 is broadening its retail network, also via franchised units. In the U.S., however, the priority is to open directly operated stores.
The first American venue opened in Beverly Hills on North Rodeo Drive in September. A New York store, which opened in December at the corner of Spring Street and Broadway in SoHo, is the largest, at 6,467 square feet. A 2,000-square-foot door at Miami’s Bal Harbor Shops is due to be unveiled early this year as well.
A store will also open in London by the end of February.
Wholesale still represents 80 percent of business, but the designers are working on growing the retail network to convey the brand’s “full message,” which they believe will also help develop their wholesale revenues. Men’s wear accounts for 55 percent of sales, and women’s wear makes up the rest.
Maccarrone said online is the brand’s best store and credited the Catens for their own involvement in the channel. The Dsquared2 online store is operated by Yoox Group and the partnership agreement was renewed in May for another five years. The collaboration with the Caten brothers started in 2009, selling on Yoox’s Thecorner.com and moving onto the brand’s own e-commerce site.
Upon the renewal, Yoox founder and ceo Federico Marchetti said Dsquared2 is one of the group’s “top stores in terms of revenues, and the brand has one of the highest online penetrations on its total sales. It’s a benchmark for us.”
Asked to explain why the Dsquared2 site is so successful online, Marchetti said, “Their product and target customer are in line [fitting the Internet] but this would not be enough. They have a clear managerial online strategy that is well communicated within the company, a well-executed management of the store and the designers are actively engaged. They have fun with it, and the store reflects their brand.”
He said there is an ambitious five-year plan, with hopes of a triple-digit growth of this store.
Maccarrone said that, offline, Europe is the biggest market, accounting for 60 percent of sales, while the U.S. is the company’s main online driver, representing 24 percent of revenues. Offline, the U.S. accounts for 5 percent of sales. After opening stores in Dubai in 2009 and Abu Dhabi in 2013, there are plans for units in Kuwait and Qatar in 2015.