The rise and fall of Benetton, the most provocative fashion brand
The Italian brand goes bankrupt and agrees to a collective redundancy plan to lay off 138 workers in Spain
BarcelonaAIDS was the focus of one of Benetton's 1992 advertising campaigns. The photograph by Therese Frare, a journalism student, shows activist David Kirby lying in bed on the verge of death amid the cries and hugs of his family. Kirby wanted to raise awareness of what it is like to have this infectious disease and Oliviero Toscani, the Italian brand's most famous creative director, wanted to share it with the world. Other examples of its shocking advertising campaigns include a photograph of a nun and a priest kissing, as well as images of prisoners sentenced to death, which led the company to publicly apologize.
Benetton Group declared bankruptcy this January and decided to lay off a thousand workers and close nearly 500 stores worldwide, five of them in Catalonia and 31 in Spain. In this extreme situation, the unions agreed with the multinational to lay off 138 employees in Spain, 24% of the total, of the 169 that had been initially proposed. The employment regulation file (ERE) was open to negotiation and the agreement between the company and the unions has allowed some of the workers who could be laid off to be relocated to other stores. Those laid off will receive compensation of 27 days for 24 months and for the most vulnerable and with more than 15 years of seniority, a bonus of 1,500 euros. Those over 55 years of age will have special treatment with Social Security.
In Italy, the closure of more than 200 stores is already planned. In addition, last weekend the mayor of Nis (Serbia), Dragoslav Pavlović, announced that in April it will close the production plant in the country, which has a workforce of 950 people. In total, it is estimated that the brand will close around 500 points of sale, as a strategic plan is being followed to try to reduce the company before closing it. The multinational had losses of 230 million euros in 2023 and has accumulated more than 700 million in the last five years, according to the accounts from its family parent company, Edizione.
The company's problems go back a long way. Luciano Benetton made a interview to the Corriere della Sera in May 2024, where he explained that the family left the company in the hands of a management team led by Massimo Renon, who "betrayed" it by omitting a 100 million euro hole. Since May 2024, the company's management has been led by Claudio Sforza, responsible for the recovery attempt based on a restructuring plan to close insolvent businesses.
The company was founded in Treviso (Italy) by Luciano Benetton, Gilberto Benetton, Carlo Benetton and Giuliana Benetton in 1965 and began to grow in the context of post-war Italy. It quickly became a fashion icon, not only for its production strategy, but also for its communication campaigns. Oliviero Toscani was one of those responsible for the company's growth with the slogan of its first campaign, All the Colors of the World, where he brought together models from different parts of the world and ended up transforming into the company's current motto: United Colors of Benetton. Based on the importance of its advertising, in 1994 the company inaugurated what it calls the Factory, its communications research center, which welcomes creatives under 25 years of age.
Benetton was at its peak in the late 20th century and early 2000s, when it ranked 75th in Interbrand's ranking of the most prestigious brands of the year. "People fell in love with this brand because its collections were so well designed, but they were from another era," says Cristina Lastra, professor of fashion marketing and communication at IED Barcelona and a member of the ESADE fashion faculty.
"They were stuck in time," says Lastra. "The middle class of fashion disappeared and very few brands were able to survive, we also saw the crisis of GAP and Topshop." The fashion professional explains how the current business model of companies like Inditex is far superior when it comes to logistics and distribution: "The product is always fresh, Benetton is unable to compete with a Zara today."
As for social media, Lastra thinks Benetton has missed an opportunity. "They are late and they need a rebranding", she says. Lastra points out that with a young public that is increasingly aware of the common good, the company would have an opportunity: "Currently there is a social movement against consumerism and more nostalgic and long-lasting profiles are sought; it is a shame because it would be a very good moment for Bennetton and his style."