BoF - The Business of Fashion » Benetton

BoF Daily Digest | Benetton ponders delisting, Good life, Bright young things, Diesel collaboration, New extremists

BoF Team — Wed, 01 Feb 2012 12:05:20 +0000

Benetton Unhate campaign | Source: Foto Telegraf

Benetton to make decision on delisting (FT)
“The Benetton family will decide at a board meeting on Wednesday whether to delist the Italian knitwear group known for its brightly coloured jumpers after the company posted another plunge in profits as it struggles to compete with Inditex and H&M.”

Luxury Companies That Can Bring You Closer to the Good Life (Money Morning)
“A lot of consumers are hurting right now, but you wouldn’t know that looking at the earnings of major luxury companies. Many luxury companies like LVMH Moet Hennessey Louis Vuitton, Burberry, Hermès, and Coach Inc had a stronger-than-expected 2011 campaign.”

Bright Young Things (Vogue)
“The British Fashion Council has announced the launch of International Fashion Showcase – a platform for international emerging designers – which will take place during London Fashion Week. Nineteen embassies and cultural institutes across London will display work from over 80 rising designers, spanning the world from Belgium to Botswana.”

The Finnish Fashion Blogger Who Landed A Deal With Diesel (Business Insider)
“Sandra Hagelstam, 24, is the founder of the hot fashion blog 5inchdesandup.com. She started blogging to create a daily log of what she wears… ‘(The blog) has opened up doors for me I never would have imagined in terms of being able to design my own collection and collaborate with others.’”

Divided they stand: the new extremists (Telegraph)
“This may look like a classic case of Roundhead versus Cavalier. Or Minimalist meets Maximalist. But that’s too simplistic.Neither Mary Katrantzou or Osman Yousefzada can be that easily pigeonholed.”

BoF Daily Digest | The perfect match, Marc Jacobs collection stolen, PPR goes green, Abercrombie suffers, Benetton’s provocation

BoF Team — Thu, 17 Nov 2011 11:24:50 +0000

A Marriage of Economic Convenience (NY Times)
“More than a decade since Target first popularized collaborations between high-end designers and mass retailers, and seven years since H&M introduced a collection with Karl Lagerfeld, there is still allure in the concept of cheap and chic… Such collaborations are proving to be both a reliable business model for retailers and a business in themselves.”

Marc Jacobs’s Entire Spring / Summer 2012 Collection Stolen (The Daily Beast)
“Call it the case of the missing dresses. Marc Jacobs’ entire Spring/Summer 2012 collection has been stolen from a train en route from Paris to London for the brand’s European press day, the company has announced. According to the e-mail circulated to press on Wednesday morning, the PR team wrote ‘our press day tomorrow in the Marc Jacobs store is cancelled, due to the theft of the spring/ summer 2012 collections during its transfer from Paris.’”

PPR to follow PUMA’s green accounting lead (Business Green)
“The parent company of some of the world’s biggest luxury and sporting brands, including Gucci, Yves Saint Laurent, and PUMA, is to embark on one of the world’s most ambitious green accounting programmes, after announcing it will create a group-wide environmental profit and loss statement (EP&L)… By placing an economic value on its environmental impact, the company hopes to improve its reporting of a wide range of green metrics.”

Missed profit forecasts hurt Abercrombie (FT)
“Shares in Abercrombie & Fitch plunged more than 13 per cent as the US teen fashion retailer missed Wall Street profit forecasts and was put on the defensive over its strategy in Europe. Abercrombie executives were grilled by analysts over falling sales at its international flagship stores after it reported a 1.8 per cent rise in net income to $50.9m, or 57 cents per share, which fell short of market expectations of 72 cents a share.”

Benetton Retries Provocation (WSJ)
“Italian clothing chain Benetton is trying to drum up attention for its flagging brand with ads showing global leaders kissing… Now, after having lost ground over the last decade to competitors such as Inditex SA’s Zara and Hennes & Mauritz AB’s H&M, Benetton is trying for publicity.”

CEO Talk | Alessandro Benetton, Executive Deputy Chairman, Benetton Group

Imran Amed, Editor — Mon, 04 Jul 2011 12:44:27 +0000

Alessandro Benetton | Source: Benetton Group

MILAN, Italy — It’s not always easy running the family business, especially when that business is an Italian fashion powerhouse, operating in 120 countries around the world and earning more than 2 billion euros in annual revenue from its more than 4,000 directly-operated and franchised store locations.

That’s exactly what Alessandro Benetton, 47 year-old scion of the Benetton fashion dynasty has been doing for the past few years. He returned to the family fold as Executive Deputy Chairman in 2007 after earning an MBA at Harvard, putting in a few years in M&A at Goldman Sachs, and successfully running his own private equity fund, 21 Investimenti S.p.A, which today has over 1.2 billion euros in assets under management.

The Benetton brand was in great need of new energy from someone who could navigate the family dynamics, but also bring an outsider’s expert perspective. In the context of increased global competition from the likes of Zara, H&M and Uniqlo, and rising raw materials prices, Benetton Group operating profit has fallen from €145m in 2007 to €102m in 2010, on total revenues which have remained flat.

Now firmly esconced in his role, Mr. Benetton is looking to re-assert the company’s position as source of high-quality fashion basics, while further emphasising Benetton’s ethical operating principles and provocative and colourful marketing strategies. To drive this creative repositioning, Benetton announced in June that You Nguyen, formerly of Levi Strauss & Co., would become chief merchandising officer and creative director.

I chatted with Mr. Benetton by phone from Milan to learn more about his vision for reshaping Benetton for the 21st century.

BoF: I wanted to start by asking you about returning to the family business. You’ve had a very successful career in other business areas, including private equity. What was it that motivated you to return to the family business in 2007, and why at that particular point in time?

AB: It was a completely unexpected move. In order to be an entrepreneur, you need to be on your own. After I graduated from business school, instead of joining the family business, I went into the world of private equity and things went well. I was expecting to move on with my career, seeing my little baby, the private equity company, grow.

But in 2007 something unexpected happened. Since the beginning of this century, maybe earlier, the middle of the 90s, our family company started diversifying. My family has always been very active in new ventures, a new phase; discovering. If you move into new fields it’s much better to have a strong management. It is the beginning of a new era for our company. In the end, my family asked me. It was not my decision.

BoF: Did it take a lot to convince you, because I can imagine that as difficult as it is managing a two billion euro business, it’s even more complicated managing a two billion euro business in which you share ownership with members of your own family.

AB: I think the real question for me, the way I interpreted it was, that I was taking some time off from my private equity activity. I have to do this for the family. Why? Because Benetton is at a new stage.

BoF: Has Benetton always been run by a Benetton?

AB: Yes, up until today, where we have two strong Managing Directors, it was always run by the family.

BoF: Now, Mr Benetton, it’s been a few years since you’ve come back into the family business. What were your impressions of the business when you returned, and what was your strategy for reinvigorating this incredible, historic business, with such a huge global presence?

AB: I think it took a couple of years to understand a map of the situation. My approach was that if you write a new chapter of the same book you always have to get started from the last line of the previous chapter, so a sense of appreciation, a sense of recognition, and look for the point of strength in the company was my first part of analysis. You must always start from your strengths.

At the same time there was an analysis of our weaknesses. In a changing world, Benetton has written the history of franchising, and colours and communication. But at the same time the environment is changing. So I think the hardest part has been to develop new projects that could start by respecting the past but imagining the future.

BoF: I grew up wearing Benetton. The things that were really on offer were lots of knitwear, lots of colour, in a way it was a basic approach to fashion. Then there was a fashion element to it as well, really rooted in an Italian aesthetic.

Now on the High Street we see two things happening. On one end of the spectrum, I see companies like Zara and H&M which are operating at this extremely fast pace in regards to refreshing fashion assortments. And then there are businesses like Uniqlo, which are really about basics. Where in this spectrum of the High Street do you see Benetton today? And how has that changed from where Benetton might have been in the past?

AB: I guess this is another part of discussion. What we want with [Mr Nguyen] is to bring back this image and perception to the consumer. Go back to basics, trendy, Italian, fashion orientated, colourful at a democratic price.

The question is, did we lose a bit of that over the last few years? I don’t think we have lost it, I think what has happened is that our business model has not allowed us to show entirely, all these values.

We see Benetton where it belongs, which is a company that wants to have a psychological communication, an emotional dialogue with its consumer, which is a sharing of a point of view, which has some social implications, which means our campaigns mean something. We do it because we have been doing it for 30 years. This so-called disposable fashion is not for us. We have reached a point where consumers prefer to throw away a garment after using it three times because taking it to the dry cleaner would cost more.

I think fashion, colour, the natural fabrics, stylish. This is where Benetton belongs.

BoF: When you talk about Benetton being a socially responsible company what does that mean to you in practice?

AB: I could give you a list of the very many things we do, but just to give you an indication, we had air conditioning in the factories 50 years ago, we have been recycling paper within the company for more than 25 years, we’ve had underground parking lots since the 80s in order to respect the [land]. We even check the source of energy of some of our suppliers in order to give a judgment of how they operate their own companies. What I like about what my father and his brothers have done is that everybody is conscious about this issue. It’s not just a marketing tool, it’s not a gimmick, it’s something that has always been a part of this company.

BoF: I find this so fascinating because I am a pretty savvy consumer of fashion, and this is such an amazing story you are telling me, but it’s not something that instantly comes to mind for me as a consumer when I think about Benetton. Why is that?

AB: Yes. I think you’re right. I think we may have lost partially the perception of being a socially conscious company. One possible explanation is that we have missed the change in media technology and we have been leveraging our ability to communicate social issues, but have not been able to capitalise enough on the changing manner of communication as the new media era began. It’s just speculation, I’m not sure.

BoF: One thing that comes to mind for me when I hear Benetton is those extremely provocative ads from the 1980’s and 1990’s where Benetton owned the consumer space for provoking interesting debate and conversation. I think there is potentially a huge amount that can be done with digital strategies and approaches to regaining that position again of being the company that is socially responsible but also understands how to provoke conversations that lead to interesting discussions with consumers…Is digital what you’re looking at, can you tell us a little bit about your plans for that?

AB: I launched a programme where I would love to see 80 percent of our communication be digital within the next, let’s say three years. I have encouraged our managing directors to create a new division for new media. I think it would be an efficient tool to reaffirm many of the topics that you and I have underlined today. The social aspect and the courage to be out of the scheme, are values we can share with our consumer.

Imran Amed is founder and editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

BoF Daily Digest | Back in Print, Brands reach out to Japan, Insights from SXSW, Benetton profits slip, The new ‘It bag’

BoF Team — Wed, 16 Mar 2011 16:23:06 +0000

Missy Rayder for WSJ Magazine Spring 2011 | Source: Art8amby

Is Print in Vogue Again? (WWD)
“Maybe the Web’s ascent and print’s decline is happening a bit more slowly than originally thought. Maybe the only money to be made these days is in print or some tablet-Web-print hybrid. Whatever it is, it appears the old-fashioned print world has a little left in the tank.”

What luxury brands are doing to help Japan victims (Luxury Daily)
“Brands such as Bergdorf Goodman, Gilt Groupe, David Yurman, Gucci and Swarovski are using Facebook and Twitter to encourage consumers to donate money to the Red Cross and other disaster-relief organizations dedicated to helping those affected by the tsunami and earthquake in Japan.”

5 Digital Marketing Trends to Watch (Mashable)
“If this year’s SXSWi conference is any indication, the foremost digital marketing trends of 2011 will be central to one theme: user presence. Too often, businesses over-engineer their marketing efforts in an attempt to capture the attention of their audiences’ minds and wallets.”

Benetton warns of rising costs as profits slip (BBC)
“Italian fashion retailer Benetton has reported a fall in 2010 profits and warned the high cost of raw materials could hit profitability this year. Net profit for 2010 came in at 102m euros ($142m; £89m) compared with 120m euros in 2009.”

When It Comes to Style, It’s In the Bag (WSJ)
“All of the attention lavished over the past decade on behalf of luxury-goods companies in the quest to create and sell ‘the world’s most desirable bag’ has led to the construction and revamping of some pretty thoughtful, well-put-together classics, with a degree of longevity one would never have attributed to the ['it bag'].”

BoF Daily Digest | Valli courts royals, Benetton CEO to step down, Ralph’s online show, Brazil’s emerging luxe, CFDA nominees announced

BoF Team — Fri, 19 Mar 2010 11:15:36 +0000

Giambattista Valli Autumn/Winter 2010 | Source: Style.com

Inside a Jet-Set Designer’s Atelier (WSJ)
“Mr. Valli has become a go-to designer for the rich and royal. Producing confections of silk satin, cashmere and tulle that have been compared to Rolls-Royce sedans and have prices to match, he has dressed clients from Queen Rania of Jordan to Sarah Jessica Parker.”

Benetton CEO Leaving In April After Sales Drop (WSJ)
“Italian clothing retailer Benetton Group said Thursday Chief Executive Gerolamo Caccia Dominioni will depart after nearly three years at the helm, news that came as the company cut its dividend amid a drop in sales.”

Ralph Lauren Takes Online Marketing to Next Level (The Thread)
“Right now on Ralph Lauren’s website, anyone can watch a virtual presentation of the Lauren by Ralph Lauren collection, and — here’s the kicker — buy anything you like straight off the runway… Ralph Lauren has even created a virtual front row.”

Brazil: Lessons in luxury for an emerging class (FT)
“But it is only in the past 10 years that they have begun to develop an original style. Today, thanks to a flourishing economy, a growing middle class and increasingly sophisticated buyers, the domestic luxury jewellery market is thriving.”

CFDA Announces 2010 Awards (Vogue.com)
“Alexander McQueen will be honoured with a posthumous CFDA Board of Directors Special Tribute award in June, it was announced in New York last night.”

BoF Daily Digest | Benetton’s middle age, Shifting luxe behaviour, Valuing brands, John Lewis thrives online, Crowdsourcing fashion

BoF Team — Mon, 26 Oct 2009 11:56:09 +0000

Benetton Autumn/Winter 09 | Source: Benetton

Benetton’s Faded Colors (Time)
“Benetton, which had sales last year of about $3 billion, hasn’t gone away. The ads for its United Colors of Benetton stores are tamer and its growth less stellar, but even in middle age — the brand turned 43 this year — Benetton is proving itself to be a case study in business management.”

Luxe Market Faces Wealth of Challenges (Adweek)
“With economic conditions compelling even affluent consumers to pay more heed to what’s “absolutely necessary,”… survey data on the attitudes of affluent consumers, plus the observations of people in the business of tracking their thinking, point to a market that faces a wealth of challenges.”

Questioning the value of designer brands (FT)
“‘I used to look at $3,000 dresses and think that was reasonable – expensive, of course, but worth it. That’s just what things cost,’ says New York businesswoman Betty Sargent. ‘Then I saw all the sales last autumn and it altered my perspective.’”

John Lewis online fashion sales triple (Drapers)
“John Lewis Direct managing director Robin Terrell said that the department store had aimed to generate £8.5m of extra revenue from the relaunched fashion website in the half year to January. However, it is now expected to hit its target in early December.”

New fashion label relies on web community to design clothes (Independent)
“Beta Fashion, dubbed by its owner as the “first online fashion label whose collections are entirely based on designs submitted by members of its community,” has launched October 21, ready to take on the big labels of this world.”