In the late ’80s and early ’90s, fashion trends came and went quickly. There were a few months when paisley shirts were in, a period where everyone wore parachute pants, and at least a couple of years when Guess jeans were the coolest thing anyone could own.
As someone who graduated from high school in 1991, I lived through Swatch watches (I had at least a few) and had the trendy oversized shirt with the Coca-Cola logo on it.
I lived through Ocean Pacific (OP!), one of the many periods when Polo shirts were trendy, and had at least a couple of years where The Gap was the only store I needed to visit at the mall.
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Benetton, however, was an even bigger phenomenon. It was a fashion brand, although it was really just one shirt that powered the trend.
The “Benetton Color Block Sweater,” a sort of oversized long-sleeved shirt, was a must-own item for a brief period, and knock-offs were common. Benetton was a global brand that had a brief moment as the hippest brand in the United States.
Since those days, the company has endured, but it’s in the middle of a massive reorganization which will involve closing hundreds of stores worldwide.
Image source: Benetton
Benetton has struggled in recent years
Benetton’s upheaval started in June 2024 when the company’s CEO stepped down.
“Following an agreement reached with Benetton Group, CEO Massimo Renon is going to consensually leave the company after completing his term of office. After the full and unanimous approval of the financial statements for 2023, which happened in an atmosphere of transparency and collaboration, the company and the outgoing CEO mutually acknowledge that a cycle is coming to a close on June 18.”
That was followed by Benetton’s creative director stepping down.
“Andrea Incontri has announced he is stepping down from his role at Benetton Group. Reached by mutual agreement between the designer and the company, the decision fits within the ongoing organizational restructuring. The goal is identifying a management team who will support CEO Claudio Sforza in facing a new phase of rationalization and relaunch.”
Those changes happened as part of a broader plan to cut expenses in order to return to profitability.
Benetton wants to cut its losses
- The company launched a restructuring plan in October 2024 to cut its losses.
- At the end of 2024, Benetton posted a loss of €60 million, compared to €230 million the previous year.
- Now the group has notified the unions that it plans to return to profit in 2026 or 2027 as a result of the plan and the injection of €260 million made by Edizione, the Benetton family’s holding company, last year.
Source: Modaes.com
Benetton closes production facilities, stores
Fast fashion has taken its toll on traditional fashion companies, including Benetton.
“Fast fashion, characterized by its rapid production cycles and low prices, has profoundly reshaped the apparel industry. This has far-reaching consequences, particularly for traditional crafts,” Sustainability Report shared.
Benetton has made cuts partly to lower costs in order to compete.
“In the last year, Benetton has closed production sites in Tunisia, Croatia and Serbia, while in Italy it has transferred workers from the Ponzano Veneto plant to Castrette di Villorba. The company has reduced its workforce by more than one hundred employees with an incentive redundancy plan, so that by the end of 2025, Benetton had 700 workers, compared to 1,100 a year ago,” Modaes reported.
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Benetton entered 2025 with more than 3,000 stores globally, but it has plans to cut at least 400 locations worldwide.
The company’s CEO Claudio Sforza has laid out the challenge for the legendary brand.
“We are securing the company, but the situation is complex. We need everyone’s cooperation,” he told a group of union leaders.
His plan involves more than just cuts.
Benetton’s turnaround plan
- Halve the time needed to produce collections from 12 to six months, reducing the cost of the finished garment, which is higher than the industry benchmark.
- Thin the assortment (primarily children’s clothing and other lesser-selling products).
- Close 500 stores permanently between indirect and direct.
- Use an online-only model in the United States.
Source: Modaes.com
Benetton’s rise and fall timeline
“It’s not something that happened recently, but in the early 2000s, the brand began to lose strength. Changes in consumer habits and the rise of ‘fast-fashion’ have meant that Benetton has not been able to re-engage in the market, and although they have tried to reinvent themselves on several occasions, the damage was already done and it has been very difficult for them to adapt to the pace of the market,” UnionRayo reported.
- 1988: Provocative Advertising: Launched the “United Colors of Benetton” campaign, featuring diverse models and addressing social issues like racism and AIDS.
- 1989: Global Expansion: Continued to expand its retail presence internationally, opening flagship stores in major cities.
- 1990: Iconic Campaigns: Released the “We, on Death Row” campaign, which featured death row inmates, sparking significant media attention and controversy.
- 1993: Fashion Shows: Hosted innovative fashion shows that emphasized inclusivity and diversity, further solidifying its brand identity.
- 1995: Market Challenges: Faced increasing competition and changing fashion trends, leading to a shift in marketing strategies and brand positioning.
- 1999: Digital Presence: Began to establish an online presence, recognizing the growing importance of e-commerce in retail.
- 2000-2005: More Market Challenges: Faced increased competition from fast-fashion brands, leading to a decline in market share and store closures.
- 2010: Social Campaigns: Reintroduced provocative advertising campaigns, addressing contemporary social issues like immigration and climate change.
- 2020: Digital Transformation: Enhanced e-commerce capabilities and digital marketing strategies in response to changing consumer behaviors during the Covid pandemic.
- 2024: Leadership changes: CEO and Creative Director resign.
- 2025: Closures: Multiple production facilities are closed; over 500 stores are expected to close.
“Benetton’s problems did not appear overnight. The current crisis is the result of years of mismanagement, outdated business strategies, and external market pressures,” wrote Shraddha Srivastava at NoNameGlobal.
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