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IT WAS A bitter farewell. On May 25th Luciano Benetton, the 89-year-old eponymous co-founder, with his three siblings, of the maker of colourful jumpers, told Corriere della Sera, an Italian daily, that he would step down as chairman. Signor Luciano, as he is known, explained that he felt “betrayed” by Massimo Renon, the firm’s chief executive. Mr Renon was, in Mr Benetton’s telling, insufficiently transparent about a pre-tax “hole” of some €100m ($108m). That lack of transparency, and Benetton’s threadbare results, provoked the near-nonagenarian to throw in the towel. For the first time since its creation in 1965, Benetton will have to make do without a Benetton.
The company says that Mr Renon did not break any rules or laws. On May 28th its board approved the financial statement for 2023. Revenue was €1.1 bn, with a net loss of €230m. Still, on the same day it said that Mr Renon would be replaced by Claudio Sforza, a restructuring expert with no experience in fashion but plenty in the turnaround of struggling firms.
The Benettons will still call the shots. The company is entirely owned by Edizione, the family vehicle headed by Alessandro Benetton, Luciano’s 60-year-old son. Today it represents a mere 2% of the net value of Edizione’s assets. Lucrative stakes in Mundys (motorways and airports), Generali (insurance) and Mediobanca (investment banking), among others, are keeping Benetton alive. Since 2020 Edizione has pumped €350m into the ailing fashion house. It will bail out Benetton again to the tune of €260m over the next four years; €150m of that will come in the next 12 months.
Benetton has lost money continuously since 2013. By 2018 it had accumulated net losses of €600m. That year the elder Mr Benetton returned from retirement to save the company. But the silver-haired tycoon had lost his golden touch. He may have been distracted. Also in 2018 the Benetton name was tarnished after 43 people were killed in the collapse of Genoa’s Morandi bridge, which was managed by Autostrade per l’Italia, then owned by what is now Mundys (and later sold). Luciano’s two younger brothers, Gilberto and Carlo, died that year, too. Since then Benetton’s cumulative losses have swollen to €1bn.
Can the new boss patch things up? Fashion retail has become fiercely competitive. Newcomers such as Shein and Temu, two online clothes merchants with ties to China, are giving even profitable rivals like Zara and H&M a run for their money. Mr Sforza will present his turnaround plan at the company’s annual general meeting on June 18th, when he will also be formally enthroned as chief executive. The Benettons have plenty of affection for the company that has made theirs a household name the world over. But Signor Luciano’s departure may hint that it is not infinite. ■
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