Benetton Group has announced a thorough recovery plan that should help the ailing brand to get back into profitability by 2026, but that come at the cost of closing 500 shops – mainly in Italy.
Road to profitability
The recently appointed CEO Claudio Sforza is launching an ambitious restructuring plan to turn the tide after years of losses. The Italian fashion company suffered losses of 230 million euros last year, but hopes to return to profit by 2026. Speaking to the trade unions, Sforza announced a combination of cost cutting, efficiency improvements and a focused brand strategy.
The number of shops will be drastically reduced, while production cycles will be halved from twelve to six months. The closure of the Croatian factory and a shift of operations to factories in Tunisia and Serbia should also further reduce production costs. In addition, the number of clothing lines will be reduced, with a focus on more recognisable products.
“Last chance”
Although no collective redundancies are planned, there is a working-time reduction programme for almost a thousand employees and a voluntary departure scheme with allowances of up to 50,000 euros. Another notable measure is the relocation of the headquarters of Villa Minelli, a historic property of the Benetton family, to an office in Castrette di Villorba.
Sforza stressed that “this is our last chance” and called on employees “to all row in the same direction”. Sales this year are expected to fall 20 % to 900 million euros, partly due to the impact of shop closures.
