Traditional Fashion Brand Struggles to Adapt to Fast Fashion Era

Benetton, the iconic 60-year-old fashion retail chain, is undergoing a massive reorganization that will involve closing hundreds of stores worldwide. The company has been struggling in recent years, with leadership changes and financial struggles taking a toll on its operations.

In June 2024, Benetton’s CEO, Massimo Renon, stepped down, followed by the departure of the company’s creative director, Andrea Incontri. These changes are part of a broader plan to cut expenses and return to profitability. Benetton has also closed production facilities in Tunisia, Croatia, and Serbia, and has reduced its workforce by over 100 employees.

The company’s turnaround plan, led by CEO Claudio Sforza, aims to secure Benetton’s future, but the situation is complex. With over 3,000 stores globally, Benetton plans to cut at least 400 locations worldwide. The company’s struggles are not new, however. According to reports, Benetton began to lose strength in the early 2000s, due to changes in consumer habits and the rise of fast fashion.

Industry experts attribute Benetton’s problems to years of mismanagement, outdated business strategies, and external market pressures. The company’s failure to adapt to the fast-paced fashion market has made it difficult for Benetton to regain its footing. As the fashion industry continues to evolve, Benetton’s future remains uncertain, but the company’s determination to revamp its operations and cut costs is a crucial step towards recovery.

Benetton’s current situation serves as a reminder of the challenges faced by traditional fashion brands in the fast fashion era. With the rapid production cycles and low prices of fast fashion, companies like Benetton are struggling to compete. According to a sustainability report shared by Benetton, fast fashion has profoundly reshaped the apparel industry, with far-reaching consequences for traditional crafts.

The company’s financial struggles are also evident in its sales figures. In 2023, Benetton reported a significant decline in sales, with revenue decreasing by over 20% compared to the previous year. The company’s losses are substantial, with estimates suggesting that Benetton has lost over $100 million in the past year alone.

Benetton’s turnaround plan includes a range of measures aimed at reducing costs and improving efficiency. The company has implemented a new organizational structure, with a focus on streamlining operations and reducing waste. Benetton has also invested in digital technologies, including e-commerce platforms and social media marketing, to improve its online presence and engage with customers.

However, the road to recovery will be long and challenging. Benetton faces intense competition from fast fashion brands, which offer trendy and affordable clothing at a fraction of the cost of traditional fashion retailers. To stay competitive, Benetton must adapt to changing consumer habits and preferences, and find new ways to differentiate itself in a crowded market.