Known as the "king of high-end casualwear", the rockstar-looking businessman is one of the most dynamic figures in a fashion industry threatened by a slowdown in its core markets.

A painful recession in southern Europe and a slowdown in China are forcing European brands to come up with new ideas to lure consumers back into their stores.

Accessories, which, like leather belts and perfumes, are more affordable than evening dresses, are the fastest-growing category in a luxury industry expected to grow 5 percent this year from 13 percent in 2011 at constant exchange rates, according to consultancy Bain & Co.

Italian designer Giorgio Armani said in September he would boost sales of accessories.

Rosso, who also owns young-focused brands such Maison Martin Margiela and Viktor & Rolf, said he expected the recession to continue to hurt Italy well beyond 2013.

"There is a deep crisis and I believe it will remain serious for two other years," Rosso said on the sidelines of the IHT summit on Friday afternoon.

"We need to take care of our licences for sunglasses, watches and perfumes. A world that fascinates me is jewelery. With my brands I want to enter this category too," he said.

A visionary entrepreneur, Rosso was the first to turn stone-washed denim into a premium category in the 1980s.

His holding "Only The Brave" - which includes his brands as well as Staff International, a company that produces under licence for Just Cavalli, Vivienne Westwood Red Label, DSquared and Marc Jacobs Men - had revenues of around $2 billion in 2011.

DENIM KING

Rosso said he finds inspiration for new projects from travelling and working with his international team.

"I went to Japan with my daughters for three days and I came back with an incredible idea about a business that is totally different from what I do but related to clothing," he said.

Rosso said nobody really understood him when he started to age his jeans by washing them with stones. His products are now sold worldwide, mostly in Japan.

"Japan is a country where fashion is extreme, more than elsewhere. I also love London," curly haired Rosso said.

"Russia is going very well, like the Arab countries. Another growing market is Brazil, where people enjoy life," he said.

Rosso, who works hands-on in Diesel but leaves designers at his other brands complete autonomy, has interests spanning from wine to eco-friendly technologies.

On Friday, Rosso announced a partnership with his friend rockstar Bono to sell in Diesel stores fashion products, sourced or entirely made in Africa under an Diesel+Edun label.

Through his Red Circle investment arm, Rosso is also the single-biggest shareholder with a stake of around 9 percent in growing Italian online fashion retailer Yoox (YOOX.MI).

Rosso has also invested in an Italian start-up incubator called H-Farm and in a maker of electric vehicles.

Rosso, whose thought-provoking slogans "Be Stupid" and "For Successful Living" have inspired books, did not rule out other investments in the future.

(Editing by Alison Williams)

• A Permanent Economic Emergency