ITALY: Benetton restructures to focus on brands
The Benetton Group will be split into three separate entities
Italian fashion business Benetton Group has outlined a three-year restructuring programme that will see the company split into three separate divisions in an attempt to simplify its business model and respond more quickly to changes in the market.
The programme, Benetton says, is designed to improve the competitiveness of its brands, which include United Colors of Benetton and Sisley. The first unit will focus on the brands, the second on manufacturing and the third on real estate management.
The brands entity will invest in directly-owned key and flagship stores, develop new retail concepts, and have a strong geographic focus to target key markets.
Meanwhile, the manufacturing unit will be mainly dedicated to serving the group's brands, through its existing production platforms in Serbia, Tunisia and Italy.
And the real estate division will be allowed to maximise returns from store locations that are no longer strategic for the group or no longer in line with its sales format.
All three entities will be directly controlled by Edizione Srl, the holding company of the Benetton family.
The key objective, Benetton says, is to maintain turnover by offsetting exits from certain countries with like-for-like sales growth, and to improve profitability.
"From the outset, we laid out a strategy for rethinking our business based on discontinuity and renewal, of course without forgetting our rich history," said chairman Alessandro Benetton.
"Today we see certain early signs that the strategy is starting paying off, even if we are still only at the beginning of the journey and the market environment remains uncertain.
"Our efforts are focused on recovering profitability by simplifying the business model and focusing on our brands."
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