MILAN — Gap is now available at OVS thanks to a trip made by Stefano Beraldo, chief executive officer of the leading Italian retailer, to Terni, Italy a couple of years ago. “I was driving to Naples and decided to stop in Terni to check out the OVS store in that city,” said Beraldo. “I asked our team there what kind of product was missing and the response was: Gap. There are a lot of cities like Terni in Italy, which don’t offer the same range of stores as Rome or Milan would, but where the consumer base is still very significant.”
Just as Gap Inc. is retrenching in Europe, evaluating the closure of stores on the continent, the franchising deal with OVS allows the American group to maintain a presence in Italy, where two stores remain operating, in the country’s capital and in Milan.
At the same time, the move is relevant for OVS, which is evolving its business strategy to gradually become a platform, which in addition to offering a range of products designed and created in-house is opening up to collaborations with other brands with a lifestyle content — a point Beraldo was eager to make.
“We don’t want to become a generalist site, we are carefully selecting the brands and they must be complementary to our offer. In the case of Gap, it represents an American way of living, and strikes a chord with Italians. Who hasn’t been to a Gap store during a trip to the U.S., maybe buying something as a memorabilia?” said Beraldo.
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OVS carries Gap products for women, men, children and babies on its website and a selection of Gap Kids products are also available in dedicated corners, which will be progressively extended to its retail network from the fall, although Beraldo did not rule out expanding adult ready-to-wear to the physical stores, too. The corners and the website closely reflect the mood of the American brand. As for the merchandise, OVS has selected a number of Gap products ranging from logoed sweatshirts to chinos and denim — what Beraldo called “the soul of the brand.”
The executive said he is already evaluating and negotiating deals with other international brands and also up-and-coming labels in a strategy that points to his belief in the solidity of the OVS label and platform. He is planning to carry the Nina Kendosa brand, which caught his attention in Paris 10 years ago, for example. Last Christmas, OVS started carrying The Body Shop and Beraldo said more space will be dedicated to that brand going forward. The Switzerland-based brand Tally Weijl is also available at OVS now.
In a new development, Beraldo revealed that Piombo will launch women’s wear this fall, and OVS plans to open 500 corners to carry the new collection. Massimo Piombo, who is also creative director of OVS, launched the men’s Piombo line with the retailer in 2018. In September, OVS opened 500 Piombo corners in the chain’s units in Italy.
OVS worked for years with the late Elio Fiorucci on the Baby Angel brand and on the store’s label Grand & Hills, with Davide De Giglio, who would go on to create New Guards Group.
The retailer has over the years dropped capsules with Aspesi, Matthew Williamson and Kristina T, but this is not the path Beraldo wants to tread.
OVS SpA, which also includes Upim banners, operates around 1,400 stores in Italy and 400 outside the country, and has been revisiting a number of units, adding lounges and greenery; the latest one modeled after this blueprint will open in Treviso in two weeks.
The group is leveraging both its physical stores, including a click-and-collect service, and its 12 million visitors to its e-shop. In 2020, the OVS online business grew more than 60 percent. Its market share has grown from 8.1 percent to 8.4 percent in 2020 and analysts expect a double-digit increase in sales in 2021. OVS went public in 2015 on the Milan Stock Exchange and shares have risen 33 percent since the beginning of 2021.
According to an Equita research published earlier this month, “OVS is proving the solidity of its business model, showing positive sales and stable EBITDA as soon as store restrictions were lifted (as in the third quarter last year) and taking market share from weaker domestic and international players. Key elements underpinning the solidity of OVS’ business model in our view are: the strong brand awareness and clear value-for-money proposition; an integrated business model, with full control from sourcing and product development to store management; category killer in the kid segment,” which accounts for more than 40 percent of group sales, and a management team “fully committed to exploit growth opportunities and fully aligned with investors’ interest.”
In January, OVS acquired the financially troubled Stefanel company and some related assets, including 23 stores and the collection archive.
As per the latest figures available, in the third-quarter last year, OVS sales totaled 361 million euros, up 6.1 percent compared to the same period in 2019, while EBITDA amounted to 38.1 million euros, substantially in line with the same period a year earlier.
In the 12 months ended Jan. 30, 2020, sales totaled 1.37 billion euros, down 1.5 percent compared with the previous year.
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