Once the go-to label for vibrant, preppy style, Benetton—one of the most recognizable mall brands of the ’90s—is now pulling back in a big way. The iconic Italian retailer, celebrated for its bold colors and provocative ad campaigns, is set to close 500 stores worldwide in a sweeping global retreat. But what led to this dramatic downsizing—and does the brand still have a chance to reclaim its place in today’s fast-moving fashion scene?
How Benetton’s struggles began
United Colors of Benetton became a global sensation by combining bold, colorful designs with provocative ad campaigns that pushed social boundaries. The brand’s rise was fueled by the Color Block Sweater, a ’90s must-have that turned the Italian retailer into a cultural icon. Today, however, Benetton is in the middle of a major transformation—one that includes shutting down hundreds of stores worldwide.
The shake-up began in June 2024, when longtime CEO Massimo Renon stepped down, followed shortly after by creative director Andrea Incontri. Leadership then passed to Claudio Sforza, who is now driving a sweeping restructuring plan focused on cutting costs, streamlining operations, and putting the company back on track toward profitability.
That plan officially rolled out in October 2024 and has already reshaped the company’s footprint. Benetton has closed production facilities in Tunisia, Croatia, and Serbia, while in Italy it shifted staff from its Ponzano Veneto plant to the Castrette di Villorba site. Workforce reductions have also been steep: through a voluntary redundancy program, more than 100 jobs were cut, reducing headcount to about 700 employees by the end of 2025, down from 1,100 the year before.
The cost-cutting is starting to show results. Benetton closed 2024 with a €60 million loss, a marked improvement over the €230 million deficit posted the previous year. Backed by a €260 million investment from Edizione, the Benetton family’s holding company, the retailer now expects to return to profitability by 2026 or 2027.
What still needs to be done
CEO Claudio Sforza has made it clear that the road ahead for Benetton is anything but simple. “We are securing the company, but the situation is complex. We need everyone’s cooperation,” he told union leaders, underscoring the difficult path to recovery.
At the start of 2025, Benetton still operated more than 3,000 stores worldwide, though the company now plans to permanently close between 400 and 500 locations. Yet the turnaround strategy is not limited to cutting back on stores. Sforza also aims to slash production times, reducing the design-to-shelf cycle from 12 months to just six in order to bring down garment costs that remain higher than the industry average. The company will also trim its product range, placing less emphasis on children’s clothing and other underperforming lines, while in the United States, it will pivot to an online-only model to reduce overhead and better align with consumer behavior.
Can Benetton bounce back?
Benetton’s future depends on whether it can turn its bold restructuring into more than just survival. The brand still has strong global recognition and the financial backing of the Benetton family, but awareness alone won’t guarantee success in a fashion industry dominated by fast-moving competitors like Zara, H&M, and Shein. To regain relevance, analysts said Benetton will need to reconnect with younger shoppers, sharpen its identity, and prove that its streamlined operations can deliver both efficiency and style. The coming years will reveal whether this once-iconic name can reinvent itself for a new generation—or fade into retail history.
Source: The Street