Benetton announces closure of more than 400 stores

The Italian textile giant is facing one of the deepest crises in its history.

The brand that once revolutionised the concept of casual fashion is immersed in a massive restructuring that makes it clear that times have changed. With the closure of 419 shops globally and 31 of them in Spain, a question arises… How has it reached this point of no return?

Throughout the 1980s and 1990s, Benetton achieved global fame thanks to its colourful, vibrant collections and an aesthetic that appealed to youth. Moreover, with the advertising campaigns devised by the great Oliviero Toscani, it succeeded in inciting social norms by addressing issues such as racism, homophobia, AIDS and war, rather than focusing solely on the superficial.

This mix of freshness, quality and a clear social commitment helped Benetton to gain an advantage and differentiate itself from its competitors. The famous United Colors of Benetton slogan not only referred to the colours of its clothes, but also to its philosophy of uniting cultures, identities and communities under the same message.

However, in the early 2000s, the fast fashion phenomenon began to dominate the market with brands such as Zara, H&M or Primark offering clothes at lower prices and more variety in their collections. It was then that Benetton began to lose the battle. It tried to adapt to the new times with strategies that did not prove fruitful, and its sales continued to plummet, resulting in a growing debt.

Italy and Spain, its key markets, saw the brand lose ground in other countries at an alarming rate. And as if that were not enough, there was also an internal crisis that further exposed the cracks in the brand. Luciano Benetton, one of the founders, decided to leave the company at one of the most critical moments, alarming that the company’s CEO had left a 100 million euro hole.

To try to solve this, the Benetton family decided to take control of the company and implement a drastic restructuring plan that includes the closure of hundreds of shops and a drastic reduction of staff. That is why they have announced the closure of 31 stores in Spain, affecting some 169 employees, and the most affected cities will be Madrid, Barcelona, Valencia, Bilbao and Seville.