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Exceptional, July-December 2012 - Bright ideas: Benetton - EY - United Kingdom

Exceptional, July-December 2012Bright ideas

“You need to be flexible if you’re a global company, but you also need to have a strong global statement“
Alessandro Benetton, Chairman, Benetton Group.

As Chairman of the Benetton Group, Alessandro Benetton has breathed new life into the Italian clothing retailer renowned for its vibrantly colored knitwear.

Alessandro Benetton was just a baby when his father, Luciano, set up the Benetton Group in 1965 in the Veneto region of Italy. Today, as the company’s new Chairman, he is responsible for the day-to-day running of the fashion industry giant, which now turns out more than 150 million garments a year and has a network of 6,500 shops stretching across 120 countries.

After graduating from Harvard Business School in 1991, Alessandro Benetton began his career at Goldman Sachs. It was in 1992, however, that he made his first real mark on Italy’s business community, when he set up private equity firm 21 Investimenti.

The experience of running 21 Investimenti was a “very important stepping stone” in his career, preparing him for the challenge of consolidating and reinventing the Benetton Group. Alessandro joined Benetton in 2004 after his family requested he invest his entrepreneurial expertise in the company.

Lending entrepreneurial expertise

One of his main tasks at Benetton has been to build up a stronger external management team to support the business’s growth. Under his guidance, a clear distinction is now being made between the Benetton family’s role as controlling shareholder of the group and the more hands-on role of the company’s management.

It’s a change from the past, says Alessandro, which means that “everyone must understand the business model and vision.”

With his easygoing, down-to-earth manner, Alessandro is clearly a manager who values dialogue and transparency. Yet despite his willingness to hand over more control to others, he can be demanding of both himself and his management team. His motivation is simple: the company means a great deal to him and his family.

“Benetton remains the most important shareholding of the family holding company in psychological terms,” he says. “I’m proud to represent this.”

Moving with the times

While he is not afraid of change, Alessandro believes that innovation at Benetton Group must be built on the company’s heritage. “With a company that has been successful for years, you need to start from its strengths,” he says.

Benetton’s history of international growth goes back to 1969, when the company took its first steps outside Italy to open a shop in Paris. Today, the Italian market accounts for about a third of Benetton’s total sales, but the economic slowdown in Italy and other countries in Western Europe has meant that the company is beginning to change its geographical focus.

The company is now targeting emerging countries for growth and expects these to account for an ever-greater proportion of its sales. That shift is already evident: last year, Benetton reported growth in Mexico, South America, India, Korea, Russia and other former USSR countries, as well as a solid performance in China.

Offering affordable luxury

Competing for growth on an international scale can, of course, be tough, particularly when economic conditions are volatile. An increasingly fierce competitive environment has meant that Benetton is having to reinforce in consumers’ minds the idea that it offers high-quality fashion at affordable prices. Consumers often mistakenly perceive Benetton as an expensive brand — so, says Alessandro, “in the next three years, we need to position the brand back where it belongs.”

To reinstate itself as a brand whose trademark is affordable luxury, the group is increasing the pace at which new merchandise and collections are rolled out and is making bigger investments in its international store network.

“You need to build a theater and attract customers, because they are being lured by competitors,” says Alessandro. He hopes to achieve this through a series of recently launched “icon” shops, located in five world fashion centers: Milan, London, Barcelona, New York and Paris.

The stores are designed to be focal points for fashion, art, design and multimedia experimentation, all key elements of the company’s brand identity.

The way forward

With the company’s 50th anniversary coming up, there is plenty of time to reach new audiences. Alessandro has no intention of making any long-term predictions, however. “I don’t want to look ridiculous 50 years from now,” he laughs, “but I will say that I do want the company still to be active. Having staying power is an asset, especially if you run the business with passion.”

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