ITALY: Benetton restructuring to cut brands and workforce
The group intends to focus on its two main brands, which includes United Colors of Benetton
Italian fashion firm Benetton Group has confirmed to just-style that around 130 employees are to lose their jobs as the company offloads its Jean's West, Killer Loop, Anthology of Cottons, and Playlife brands as part of a three-year restructuring programme.
In further details released this week, it has emerged that the company plans to divest the other brands by the end of 2014 and will close all its directly-managed Playlife retail stores.
"Our group has the potential to be a leader in the markets in which it operates," said Benetton CEO Biagio Chiarolanza.
"We own one of the most significant brands in the history of global fashion, United Colors of Benetton, which is also one of the most renowned and respected brands in all key markets for apparel.
"This is why the three-year programme that this management team is implementing above all involves the continuous improvement of our entire retail network, as well as other initiatives aimed at strengthening our business by focusing on where we see the most potential for growth."
The aim of the restructuring is to split the company into three separate divisions that not only simplify its business model but also enable it to respond more quickly to changes in the global market. It also plans to exit around 60 countries "that are no longer strategic."
Of the new units, one will focus directly on the brands, one on manufacturing and one on real estate management - and at the end of the three-year period all entities will be directly controlled by Edizione Srl, the holding company of the Benetton family.
The division focusing directly on the brands will continue to be called Benetton Group, with its chief aim of returning the store network to profit. The United Colors of Benetton and Sisley brands will be developed separately, with investments focusing on flagship and key stores directly owned by the group.
There are also plans for a "radical improvement" of the store network, both in key countries and new retail formats.
Back in November, the company said the manufacturing unit will be dedicated to serving the group's brands, through its existing production platforms in Serbia, Tunisia and Italy.
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