Benetton halves losses, focuses on digital restart and rationalises distribution network

Benetton’s losses were more than halved compared to the previous year, amounting to just under 100 million euros, an improvement of 57.5 percent year-over-year (YoY). In 2023, this was 235 million euros. The net financial position improved by approximately 50 million euros, from 460 million euros in 2023 to 411 million euros in 2024.

Five pillars of chief executive officer Claudio Sforza’s plan

The plan for improving efficiency and reorienting the activities of Benetton Group, led by chief executive officer Claudio Sforza, is continuing.

The plan rests on five pillars: relaunching the brand and strengthening digital channels; restoring competitiveness by reducing the costs of the final product, with attention to its quality; rationalising the distribution and sales network; process and organisational efficiency; and reducing overheads.

Slightly less than a year after the manager took office, the Treviso-based group closed the 2024 financial year with a turnaround. This was supported by the work of the team led by Sforza and by the new direction of Edizione.

All company functions are concentrated in one location, that of Castrette di Villorba

The cost-cutting plan has been effective, leading to the concentration of all company functions in one location, that of Castrette di Villorba. This was also with a view to a more synergetic and efficient approach to the organisational transformation process.

The company has started a process of improving efficiency and reviewing the points of sale and distribution channels. On the one hand, directly owned stores in the market are being protected, with positive results in 2024, with an average sales growth of 7 percent compared to the previous year. At the same time, commercial relationships are being terminated with partners facing significant credit insolvencies with Benetton Group.

On the other hand, there is significant investment in digital sales channels, with the launch of a programme to strengthen the company’s e-commerce. This is designed to catch up with the benchmarks in the sector. The goal is to significantly increase the impact of e-commerce on total group turnover, from the current 13 percent to between 20 and 25 percent in the coming years. This will be partly through the creation of an e-business division that reports directly to the chief executive officer.

In parallel with this, with a view to rationalising the workforce, measures have been taken that have affected a significant proportion of the parent company’s employees. The consultation with the trade unions was based on collaboration, with the aim of minimising the social consequences.

In the area of adapting production processes to market standards, Sforza’s plan has provided for a purchasing strategy that can influence costs. It also considers the possibility of using specialist suppliers, to align Benetton Group’s production chain with industry benchmarks. This will surpass the consolidated model, in which only 60 percent of the production of goods was outsourced to third parties in recent years, and 40 percent was still produced by its own factories.

This situation led to production inefficiencies, both in terms of costs and collections. The development of the latter was significantly shortened in terms of processing times, from 12 to six months. This acceleration has had a dual impact: on the one hand, financially, with a reduction in immobilised working capital, and on the other hand, commercially, allowing for greater reactivity to market trends and a product offering that is more in line with consumer preferences.

This includes the launch of two new collections, which have their roots in South Korea, one of the most important markets for the group, where it is present with approximately 300 stores of its two brands, United Colors of Benetton and Sisley. On the one hand, Sisley K, a new premium line with an urban and refined style, is debuting with a monobrand store in Rome and online, targeting a female audience with a refined taste. On the other hand, Bbold is reinterpreting the heritage of United Colors of Benetton with the aesthetic codes of knitwear, denim and bold colours that merge with oversized volumes and sporty details.