Dsquared2’s Bold Split Ignites Legal Showdown with OTB | Image Source: www.businessoffashion.com
DUBIN, Ireland, March 29, 2025 – What started as a routine business relationship between a luxury fashion label and its production partner has become a high-performance legal dispute. Dsquared2, the brains of the Canadian twins Dean and Dan Caten, officially cut off links with Staff International – the manufacturing and distribution division of Italy’s OTB group – years before the expiry of their licensing agreement in 2027. The movement, announced this weekend, marks a radical turning point for the brand while preparing to internalize its production and distribution activities for the first time since 2000.
What caused the early termination of the Dsquared2 licence agreement?
This question remains unanswered, at least officially. Dsquared2’s brief statement simply declared the license agreement with Staff International “immediately completed”, adding that the brand would assume full control over the production and distribution of its wear lines ready from the pre-collection spring/summer 2026. The legal reasons for a sudden departure are not mentioned, nor are there any explanations at this time.
However, behind the fashion drama is a deeper narrative: creative control, strategic independence, and perhaps a configuration for a large capital movement. Watchmakers in the industry have long believed that Catens can see an important investor or private partner. Such an agreement is often more attractive when a brand directly has its operational infrastructure, and not just its creative vision.
How did Staff International react to the sudden exit?
Swiftly and with legal firepower. On 27 March – two days before the public announcement – Staff International filed an application with the Court of Milan. The case is addressed to Grascoe Holdings Limited, Dsquared2 Trademark Limited, and to the designers themselves. In its statement, Staff International stated that the licence agreement remained fully valid and that there were no legal conditions to justify early termination.
“Staff International reaffirms its conviction that the licensing agreement is fully effective and confirms its intention to fully implement it until its natural expiration”
the company stated. It also emphasized its commitment to transparency and to defending its rights and reputation in court.
What does this legal dispute mean for both companies?
For Dsquared2, this is a bold but risky maneuver. While direct control of manufacturing and distribution offers a long-term strategic advantage, it also requires immediate investment, logistical preparation and operational muscle. The brand’s wholesale model, which is about 80% of its sales estimated in 2023, means that any disruption to its supply chain could rapidly develop through its global retail network.
For Staff International and the OTB parent company, the implications are also important. Losing Dsquared2 not only deprives a creative player of his portfolio, but also moves away from his revenue base. OTB, which has brands like Diesel, Maison Margiela, Marni and Jil Sander, has recently declared 4.4 percent discount in 2024 products, ending the year at 1.8 billion euros. While Margiela and Diesel have published modest profits, the unexpected fracture with Dsquared2 adds new turbulence to Rosso’s empire.
Does this trend fit into a broader industry trend?
Sure. Throughout the luxury sector, an increasing number of brands are re-evaluating legacy licensing agreements for internal control. Rationality is simple: margins. By having production, distribution and retail activities, brands can not only protect their intellectual property and creative vision, but also gain more profits per unit sold. Consider this as a vertical integration with a seam twist.
The Dsquared2 movement perfectly matches this trend. It follows similar decisions from heritage houses like Valentino and emerging actors like Jacquemus, who reshape their business models to meet changing consumer expectations and digital sales landscapes.
How did the 30th anniversary event anticipate this transformation?
The week saw Dsquared2 stage a celebration of high energy and theatre that marks its 30th anniversary. Models made of buffoons inspired by trapper and custom costumes, with dominant style characters and live musical performances rounding the show. But under the surface, the show carried subtle signs of a mark ready to trace its own trajectory.
The event took place in a context of increasing independence. The headquarters of Dsquared2 in Milan - a converted power plant with rooftop pool and extended event areas – is already serving as a cultural centre. The growing infrastructure of the brand suggests that the internalization of production was less a question of capacity and more a moment.
Is there a financial strategy that drives this movement?
There are good reasons to believe that. Former CEO Ennio Fontana, who left for Bally, estimated that Dsquared2 could raise revenues from 280 million euros to 500 million euros in five years, provided they are transferred to the current license-dependent model. Total ownership of transactions, and potentially a share in retail distribution, makes the brand more attractive to investors and accelerates this path towards profitability.
In addition, the current fashion landscape rewards flexibility and speed – characteristics difficult to achieve under rigid licensing agreements. By going alone, Dsquared2 gains more agility in prices, product declines and supply chain optimization, all of which are essential in a post-pandemic and digital market.
What’s next for both sides?
The request will probably take months, if not years, to resolve. Legal experts suggest that, unless the original contract contains escape clauses, which have not yet been described, Staff International has a solid record. However, prolonged litigation could lead to a negotiated settlement rather than a judicial battle.
For Dsquared2, the challenge is now shifting from legal defence to operational crime. The transition to self-managed production and global distribution is not of low weight. Robust internal systems, third-party associations and, perhaps, cultural discipline may be needed to maintain brand consistency as operations are intensified.
What does it say about Dean and Dan Caten’s vision?
The Caten brothers have always walked at their own pace, from their theatre tracks to their unorthodox brand. The decision to leave a nearly three-decade partnership with Staff International reflects more than just a contractual dispute. It evokes a new era of ambition, an era rooted in property, a legacy building, and perhaps a final act of reinvention for its brand name.
It is worth remembering: the Catens began their journey by contesting the rules of fashion. Its first collection, the “Homesick Canada Collection” in 1995, blended robust exterior elements with the Milanese saster. Since then, they have dressed Madonna icons in Beyoncé and collaborated with institutions like Manchester City Football Club. Now they seem ready to take this disruptive energy into the common room.
In a landscape where fashion and finance are more intertwined than ever before, Staff International’s Dsquared2 division can be the first chapter of a broader evolution, where heritage, control and vision converge to redefine what a modern fashion house is.
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