For generations, United Colors of Benetton shaped the meaning of stylish clothing. Its vivid hues, memorable promotions, and cultural impact extended far beyond shopping centers.
Today, however, this legendary label faces a very different scenario: hundreds of outlets will soon shut their doors.
The announcement surprised many, especially because it is not related to bankruptcy. What went wrong, and what does this signify for the wider fashion sector? Let’s examine Benetton’s history, obstacles, and extensive transformation plan.
A Legacy of Six Decades
Founded in 1965, Benetton has existed for over sixty years, establishing itself as a key player in global apparel.
Celebrated for its distinct style and international presence, the brand remained prominent across multiple generations. Yet even a long-standing reputation cannot guarantee success in a fast-evolving marketplace.
A Mall Essential
At its height, Benetton stores were more than just shops, they were gathering spots. Consumers visited not only for garments but also for identity and connection. In many retail complexes, a Benetton location was an essential stop for teenagers and young adults seeking contemporary trends.
Global Expansion
Starting as a European fashion line, Benetton rapidly spread across continents. By the early 2000s, the company had locations in major capitals and small towns alike.
Its logo, campaigns, and colorful clothing became iconic symbols worldwide, making Benetton one of the first truly international clothing brands.
A Signature Product
One article defined a generation: the multicolored block sweater. This roomy, brightly patterned garment was ubiquitous in the late 1980s and early 1990s.
It became a wardrobe essential and cultural emblem. Copies were frequent, yet the original Benetton sweater maintained prestige and increased brand recognition.
Bold Advertising
Benetton’s marketing campaigns were daring and attention-grabbing. Advertisements addressed topics such as inclusion, racial equality, and the AIDS crisis.
These highly visible campaigns gave the company an advantage over competitors, connecting with consumers beyond clothing.
Cracks Appear
Despite early success, weaknesses surfaced. Rapidly changing fashion trends and emerging rivals strained profits. Shoppers who once relied on Benetton started turning to cheaper, faster alternatives. Even the brand’s bold publicity could no longer ensure steady store visits.
The Fast-Fashion Challenge
By the early 2000s, brands like Zara, H&M, and Forever 21 transformed the industry. They offered frequently updated collections at lower prices. Benetton’s slower supply chain and traditional pricing structure made competition difficult.
Leadership Changes
In 2024, management transitions attracted attention. The chief executive resigned after reporting financial results, and the creative director also left. Frequen
t leadership changes exposed instability at the top, emphasizing the need for new guidance.
Financial Strains
In 2023, Benetton reported losses of €230 million, improving slightly to €60 million in 2024. Despite partial recovery, profitability remained distant, prompting cost reductions and concern among stakeholders.
The Restructuring Plan
In late 2024, Benetton announced a major overhaul. The plan seeks to reduce design-to-shelf time, simplify product ranges, and close hundreds of outlets. The company is also emphasizing online sales, particularly in the United States, where physical shops will vanish.
Store Closures
Entering 2025, Benetton operated over 3,000 locations worldwide. The restructuring will permanently close 500 stores, affecting both company-owned and franchise shops. For loyal customers, these closures mark the end of a long retail era.
Workforce Impact
The changes also affect employees. Factories in Tunisia, Croatia, and Serbia are shutting down, while Italian operations are being reorganized.
Over 400 jobs have been eliminated, reducing staff from 1,100 to 700, highlighting the human cost of efficiency measures.
Family Support
The founding Benetton family intervened through Edizione, their investment group, contributing €260 million to stabilize cash flow during the transition. This support demonstrates the family’s commitment to the company’s future.
Profitability Goals
Benetton aims to return to profit by 2026 or 2027. Executives focus on cost management, faster design timelines, and narrower product lines. Whether these measures succeed remains uncertain, but the brand insists bankruptcy is unnecessary.
No Bankruptcy
Unlike many struggling retailers, Benetton is not pursuing bankruptcy. Restructuring with family backing gives the resources to manage store closures while continuing operations, signaling confidence in the brand’s lasting value.
Changing Consumer Behavior
Consumers today are less loyal to individual brands. Online shopping and fast-fashion companies dominate, offering speed, affordability, and convenience. Benetton’s traditional identity faces increasing challenges in this fragmented market.
Timeline of Highs and Lows
From the iconic “United Colors” campaigns of the late 1980s to downturns in the 2000s and pandemic-driven online transitions, Benetton’s history shows creativity and mistakes. The 2025 store closures mark another critical chapter.
Lessons for the Industry
Benetton illustrates how rapidly a leading brand can lose ground when customer preferences shift. It also highlights the difficulty of modernizing traditional systems in an era that demands speed, flexibility, and strong digital presence.
The Road Ahead
Closing 500 stores ends one stage but not the company’s journey. With a leaner footprint, stronger online presence, and ongoing family support, Benetton is working to rebuild. Future success depends on adapting to today’s competitive fashion landscape.