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Benetton set to remodel its brand as it looks to cut down on fashion losses

A model wears a creation as part of the Benetton women's Spring Summer 2024 collection presented in Milan, Italy, Thursday, Sept. 21, 2023. (AP Photo/Luca Bruno)
A model wears a creation as part of the Benetton women's Spring Summer 2024 collection presented in Milan, Italy, Thursday, Sept. 21, 2023. (AP Photo/Luca Bruno) Copyright Luca Bruno/Copyright 2023 The AP. All rights reserved
Copyright Luca Bruno/Copyright 2023 The AP. All rights reserved
By Indrabati Lahiri
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Benetton has been facing intense competition from other fast-fashion brands such as Zara in recent years.

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The United Colours of Benetton, one of the most well-known and loved brands of the 1980s and 1990s, is facing a revamp. According to Reuters, the company is looking to make some major restructuring changes in the near future, to try and curb losses.

The company made a net loss of some €230 million in 2023, a sharp fall from 2022's net loss of €81 million. The figures include impairments, meaning a reduction in the value or amount of a company asset, which are substantial.

One of the biggest changes expected to happen is that current Benetton CEO Massimo Renon will step down. The company's shareholders are likely to announce this formally at their upcoming June meeting. 

Renon has been widely blamed for the losses by group chairman and Benetton co-founder, Luciano Benetton, who will also be stepping down in June, having been at the helm since 2018. Renon has previous experience working at Safilo, Marcolin and Luxottica.

Benetton's holding company Edizione, is likely to finance the restructuring with a cash infusion of around €260 million, with the parent company also highlighting it is planning to keep a closer eye on the group from here on.

Regarding Renon, Luciano Benetton, who is also the co-founder of the group told Corriere della Sera: "I trusted him and I was wrong. I was betrayed in the truest sense of the word.

"A few months ago, I realised that something was wrong, and that the image of the group that management was presenting to us at board meeting was not real. Before I leave the group, I intent to explain what happened with the transparency that characterises me, without shirking my responsibility.

"We've lost four years and that makes things more difficult because we don't have a magic wand. Unfortunately, sacrifices will have to be made."

Benetton's woes could be a cautionary tale for fashion retailers

Benetton has found itself increasingly outpaced by fast fashion retailers in the new millennium. This has led to the company launching several creative revivals, such as multicultural and artisanal collaborations with designers such as Stella Jean.

In recent years, this has become progressively more of an issue, with fast fashion brands such as Zara, which still have a high-street presence, overtaking it with ease. Online discount retailers such as Shein and Temu are also eroding more of its market share.

Benetton's current situation highlights the challenges some older fashion retailers face with today's market and consumers, requiring them to need to adapt and pivot quicker than ever.

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