It is a name symbol of Italian capitalism and mainstream fashion in the 80s and 90s. Benetton, founded in 1965 by three brothers and a sister, will no longer be quite the same from the month of June: there will no longer be a family member on the board of directors. Luciano has just announced his departure while the company, whose annual turnover remains significant – more than a billion Euros – recorded losses of 230 million last year.
Overtaken by the competition
This is the effect of a slow shift and fierce competition from so-called “fast fashion” brands – H&M, Zara and others. The recipes for Benetton’s success at the end of the 20th century were: innovative style, eye-catching advertising and franchise stores. In all these areas, the brand with the colorful sweaters has been overtaken. “These competitors have chosen a system different from franchising: they own their stores,” analyzes Andrea Colli, professor of economic history at Bocconi University in Milan. “They control distribution more closely and analyze consumer tastes better. They have accelerated the renewal of collections in stores. Benetton is slower in this area. And then Zara understood that the world of advertising had changed: the link with the consumer goes through social networks and online sales. Here too, Benetton is slower.”
Do you hear eco? Listen later
Reading listen 58 mins
Textiles have become marginal in the holding company’s activities
The holding company that owns Benetton, Edizione, will put some money back into the pot – 260 million. Because if, symbolically and historically, textiles remain important – it is with this activity that it all began – its weight is now marginal in the activities of this holding company. And if the Benetton family moves away from the textile group, it remains present in Edizione, chaired by Alessandro Benetton, Luciano’s son. Activities revolve around real estate, catering, infrastructure – Rome airports for example.
A tarnished image
Until recent years, the business portfolio also included a motorway company. The road which passed over the Genoa bridge – which collapsed in August 2018 – belonged to Benetton, which significantly tarnished the family’s image. “The investigation revealed deficiencies in the maintenance,” says Gianni Dragoni, journalist and author of a very critical book on the Benettons “La sacra famiglia”. Little money had been invested in this area while the activity brought in very large profits The highway company was then bought by the Italian state and two foreign investment funds were paid, a large part to the Benetton family: a scandalous operation. So the family’s image has been tarnished, but they are still treated with kid gloves in the press, because they are powerful, and therefore well treated.” Powerful, especially in the Treviso region where it all started and where Benetton still employs 1,300 people. Luciano’s departure worries the unions who see the family as a guarantor of the defense of employment.
The eco brief Listen later
Reading listen 2 min
