
Benetton is no longer what it used to be
The brand continues to close stores due to the crisis it is going through
February 4th, 2025
Recently, Corriere della Sera revealed that by 2025, Benetton could close around 400 stores worldwide, with at least 200 of them in Italy. Over the past 12 months, the brand has already shut down more than 100 of its stores in the country. Globally, the brand currently has about 3,500 stores, but it has been in severe crisis for some time, forcing it to significantly reduce the number of locations. This is a strategy to tackle high production costs compared to the significant decline in sales since 2012, which dropped from around 2 billion to just over 1 billion in 2023. In the same year, the company recorded losses of 230 million euros. The current CEO of the group, Claudio Sforza, stated that one of the goals for 2025 is to reduce this deficit to 50 million euros in an attempt to reach break-even by 2026.
@benetton Introducing the United Colors of Benetton SS24 Ad Campaign at Venice Marco Polo Airport. BE FAMILY Creative Direction @andreaincontri Photography Giampaolo Sgura Styling Jacob K Hair Franco Gobbi Make-up @lucacianciolomakeup Casting Barbara Nicoli & Leila Ananna #Benetton #bebenetton suono originale - Benetton
Benetton is one of the most famous Italian clothing brands, known worldwide for its colorful and affordable clothing, as well as its innovative advertising campaigns – especially those between the 1990s and 2000s. During that period, the company began collaborating with photographer Oliviero Toscani, who started incorporating social themes into his shoots, addressing issues like the fight against AIDS or anti-racism, among others. This strategy, paired with the slogan “United Colors of Benetton,” brought the company immense notoriety. The brand, moreover, remained family-run for many years, but the crisis of the last decade led the Benetton family to formally exit the group due to a series of corporate dynamics. Regarding these events, founder Luciano Benetton blamed former CEO Massimo Renon, claiming he failed to transparently communicate the company’s financial issues. The Benetton family will still manage the group that bears its name through the Edizione holding, which deals with many other activities, with clothing being a secondary sector.
The Consequences of Benetton’s Crisis
The success that Benetton enjoyed for so long was also and especially tied to its sales strategy, which in some ways anticipated the typical business model of fast fashion brands. However, over time, the company has faced increasing competition, compounded by the broader and more recent difficulties in the clothing sector, further aggravated by the group’s business model. Unlike other brands, Benetton takes on the entire production process of its clothes, all the way to the sale. This level of control, however, comes with very high costs, especially when compared to those of other fast fashion brands that don’t manage the entire supply chain. This model, while more economical, raises several questions regarding both ethics and sustainability, as well as the quality of the final product. However, the new CEO of Benetton, given the need to reduce the company’s costs, is considering adopting a similar approach.
Lightening the production chain, however, has the main consequence of cutting many jobs – Benetton has over a thousand employees in Italy and several thousand worldwide. Among Sforza’s plans is also the closure of many of the brand’s franchised stores, which buy and sell the company’s products, but which are not directly managed by the brand. In recent years, many of these stores have accumulated significant debt to the group due to seemingly controversial management of unsold goods – as revealed by Report. To address this situation, Sforza has imposed the closure of businesses in cases where managers are unable to settle the debts owed to the company. Another issue with Benetton’s business model, which the new CEO will need to address, is the poor performance of e-commerce, which only accounts for just over 10% of the company’s revenue.