Benetton's newly named CEO must turn the tide

The Italian fashion empire Benetton will recruit a new general director, Claudio Sforza, to straighten out its accounts and replace Massimo Renon, who had been publicly accused by his co-founder Luciano Benetton, sources close to the company said on Tuesday.

Sforza, a "manager with recognised financial and industrial expertise" will be given the onerous task of "managing the reorganisation and relaunch of the company", the same sources reported. Sforza, born in 1957, has held executive positions at a number of major Italian groups. He was CEO of gaming company Gamenet and CFO of postal group Poste Italiane.

Mr Sforza's appointment must be approved by the Benetton group's general meeting of shareholders on 18 June, when Massimo Renon's term of office expires. Luciano Benetton, 89, announced on Saturday he was stepping down as chairman of the Italian family-owned group. He accused his chief executive of leaving "a gap of 100 million euros" after four years at the helm of the clothing brand.

However, the figures adopted by Benetton's board of directors on Tuesday turned out to be even worse than forecasts. Benetton saw its net loss almost triple to 230 million euros in 2023, after already recording a loss of 81 million euros in 2022. This loss was mainly due to impairments of 150 million euros.

‘I've been betrayed’

Since 2013, Benetton has accumulated losses of more than one billion euros. Benetton's turnover was 1.09 billion euros, almost unchanged from 2022. The group also posted an operating loss of 113 million euros. Family holding company Edizione plans to "support the Benetton Group's reorganisation and recovery plan by investing 260 million euros in the coming years", having already invested 350 million euros in the previous three years. On Saturday, Luciano Benetton criticised Mr Renon for destroying the group's account.

"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 presented to us at board meetings was not real," he said in an interview with Corriere della Sera.

Founded in 1965 in north-east Italy by four brothers and a sister, Benetton was initially known for its soft wool jumpers in a wide range of colours. 'United Colors of Benetton’ became increasingly successful, reaching global proportions between 1982 and 2000 thanks to the eye-catching advertising campaigns of photographer Oliviero Toscani.

But the brand then went through more difficult times and steadily declined, failing to innovate in the face of ‘fast fashion’, a trend characterised by the rapid renewal of clothes on sale and the rise of chains Zara and H&M. Luciano Benetton took the helm of the brand in 2018 in an attempt to turn it around, but the appointment of Massimo Renon as CEO did not lead to the expected results.(AFP)

This article originally appeared on FashionUnited.FR. Translation and edit by: Rachel Douglass.