Benetton halves its losses in 2024

The drastic therapy prescribed by CEO Claudio Sforza at Benetton seems to be bearing fruit. In the last decade, the Italian apparel group had accumulated losses for nearly €1.6 billion, and when Sforza joined the group in June 2024 to spearhead its recovery, he announced a radical restructuring plan, which is yielding better-than-expected results. In 2024, Benetton Group generated revenue of €916.9 million, virtually on par with the €1.098 billion recorded the previous year, while the group’s losses were reduced from €235 million in 2023 to €100 million last year.

Sforza had forecast losses of €110 million in 2024, but Benetton did better than expected, managing to cut losses by more than half. The group’s net financial debt also improved by approximately €50 million, falling from €460 million in 2023 to €411 million last year. Sales have remained stable, despite an extremely tense business environment and the fact that the group has undergone an in-depth reorganisation.

To begin with, Benetton has concentrated all operations at one site, in Castrette di Villorba in Veneto, leaving its prestigious former headquarters at Villa Minelli in Ponzano Veneto. The move generated “significant structural savings” according to Benetton, which also shut down a number of stores, especially those run by external partners, some of which were hit by major solvency issues in the last few years.

Benetton has embarked on an extensive rationalisation and renovation programme of its stores and distribution channels, prioritising the upgrade of its directly operated shops. In 2024, the latter’s sales grew by 7% over the previous year. In parallel, Benetton has invested significantly in online retail, launching a revamp of its e-shop and setting up an e-business division reporting directly to Sforza. The goal is to increase the Benetton e-shop’s current 13% share of the group’s overall revenue to 20%-25% in the next few years.

Benetton has also made a major effort to reorganise its manufacturing operations, reducing internal capacity and resorting to third-party producers. The group’s production sites in Tunisia, Croatia and Serbia have been closed. Benetton currently produces 40% of its assortment in-house, and the rest is supplied by contractors, enabling the group to slash collection development time from 12 to six months. This has allowed the group to reduce fixed working capital, to respond more quickly to emerging market trends, and to develop a product range more in line with consumers’ tastes.

Following the store and factory closures, the group’s workforce has been downsized. Benetton has not provided details about redundancies, simply stating that the measures introduced “have affected a significant number of the parent company’s employees.” Last December, the group struck a deal with unions to encourage employees to leave.

In terms of products, in April Benetton launched two new collections inspired by South Korea, one of its main markets, where it operates 300 stores for United Colors of Benetton and Sisley, the group’s premium label. The first was BBOLD, a womenswear capsule collection by Benetton with a K-Pop vibe, designed by local designers, and the second was Sisley K, a more sophisticated womenswear line also developed by Korean creatives, inspired by the country’s style.