Benetton Group plans to close 500 stores

Business

Benetton Headquarters in Castrette Credits: Courtesy of Benetton

Benetton Group CEO Claudio Sforza is finalising the company's reorganisation plan, which he has been working on since this summer, when he took over the Venetian company. The strategy should reduce losses from 230 million to 110 million euros within a year. The break-even point is forecast for 2026. To achieve this goal, 500 store closures are planned, according to various Italian media.

The company, contacted by FashionUnited, has not issued an official statement regarding the restructuring plan discussed with the unions yesterday.

Incentive schemes for voluntary departure

Last July, an agreement was signed in regards to the application of structural unemployment for 908 employees, impacting practically all the employees of the Ponzano Veneto and Castrette di Villorba (Treviso) offices. The duration of the scheme is six months, from 23 August last until 28 February 2025. Approximately 300 employees in production (factory workers and employees of logistics, maintenance, e-commerce and the packaging centre) are not impacted by structural unemployment.

The agreement also provides a voluntary severance scheme with a compensation of up to 50,000 euros, which can be used by all employees not covered by the structural unemployment scheme and by those approaching retirement. In July, Benetton guaranteed that there would be no layoffs for the next three years. On November 15, Gianni Boato, secretary general of Femca Cisl Belluno Treviso, recalled that "at the moment the agreements with the company are clear: structural unemployment working until February 28, 2025 with an individual limit of a maximum of two days per employee and no layoffs."

Yesterday, at the Benetton headquarters in Castrette di Villorba, Sforza met with the textile unions to discuss the restructuring plan. According to the newspaper Milano Finanza, turnover will fall by 20 percent in 2024, from 1.09 billion euros in 2023 to around 900 million, and this is due both to the shrinkage of the market (minus 10 percent) and the significant reduction in the store network.

Other measures that the CEO will take to reduce debt also include reducing delivery times for collections, which will go from 12 to 6 months. In August, creative director Andrea Incontri left and it was announced that the internal team will take over the creative direction. On the production side, the factory in Croatia is also planned to close. Those in Tunisia and Serbia will be compensated with production for third parties. In addition, the number of clothing lines will be reduced and investments will be made in 'recognizable and competitive garments'.

About ten days ago, the CEO asked the employees of the Venetian company via an email "to all row in the same direction with the will to actively participate in a process of profound change". "The goal is to launch a multi-year relaunch plan and build a truly competitive presence on the market, after a necessary restructuring phase".

With these words, the CEO of Benetton Group wrote to employees to inform them of the move, already underway, from Villa Minelli, the historic headquarters of the group founded by Luciano Benetton, to the nearby operational headquarters in Castrette di Villorba. Villa Minelli will not be abandoned as it remains a property of the Benetton family, but the move, which "will gradually involve all the colleagues who currently work there by 2025", Sforza wrote, should guarantee part of the cost savings and efficiency improvements that the new management is working on.

This article originally appeared on FashionUnited.IT. It was translated to English using an AI tool called Genesis and edited by Rachel Douglass..

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