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Benetton Restructures Radically; Splits into Three Units

Global fashion brand Benetton recently announced a corporate restructuring initiative designed to give the Italian firm a more competitive edge, a simpler and more efficient business model, and the flexibility to respond to ever-changing market conditions while improving profitability and maintaining sales levels.

Benetton, whose annual sales are about 2 billion Euros ($2.7 billion), is known for its controversial advertising, the quality, bold colors and “democratic pricing” of its apparel, and its commitment to human dignity and to preserving the environment.

The company’s new corporate architecture will house three separate units, with the change to be implemented over the next three years.

One of the new units will focus on company brands, including United Colors of Benetton, Undercolors of Benetton, Sisley and Playlife.

Another unit will oversee all manufacturing operations at its production facilities in Serbia, Tunisia and Italy.

The third unit in Benetton’s new company configuration will concentrate on real estate management.  The firm, based in Ponzano Veneto near Venice, Italy, maintains a network of more than 6,500  stores in 120 countries.  A major goal of the real estate division will be to optimize productivity and merchandising strategy at the brand’s underperforming retail stores.

Benetton’s family holding company, Edizione Srl, will oversee the three new company divisions. Alessandro Benetton, Chairman of Benetton Group, said of the restructuring plan: “From the outset, we laid out a strategy for rethinking our business based on discontinuity and renewal, of course without forgetting our rich history.”

Benetton said there are already early signs that the new strategy is beginning to pay off.