Benetton is putting its stamp on its Indian business after buying out the half-share owned by Indian partner DCM.

In a letter to the company's shareholders, chairman Luciano Benetton identified India as a "bridgehead to entry into other Asian countries."

Benetton has stated that it would like the brand in India to be positioned on par with other international brands in price and fashionability, rather than only slightly above the mass brands in the country.

Its positioning has suffered for several years under poor brand direction, amidst complaints that its products did not deliver value-for-money despite premium prices.

In keeping with its new strategy, the company will focus on increasing the average store size. It will be closing smaller stores, and opening mega-stores combining men's wear, women's wear, children's wear and accessories. The company aims to have over 50 large stores by 2007.

It will also look at more shops-in-shop in Indian department store chains, and aims to relocate smaller stores to high-traffic malls.

Management turnover has been another sore point for the company's Indian venture. The business is now to be led by an Italian chief, with the design and production functions also being handled by Italian expatriates.

The last CEO quit about two months ago, and an interim CEO is in place. Sales and marketing will be handled by Sanjeev Mohanty, who was previously with India's largest brand distribution company, Madura Garments.

Internationally, Benetton's sales in 2004 dropped by 9 per cent to €1,686 million, though net income was 14 per cent up from the previous year.

India and China have been identified as growth markets, under the guidance of Alessandro Benetton, deputy chairman.