Benetton hits back at crisis rumours, denies plan to sell Sisley

By

Gianluca Bolelli

Translated by
Nicola Mira

Published
Dec 2, 2016

Italian fashion group Benetton responded to negative newspaper stories this week and said it won’t be selling the Sisley brand. It also said that reported massive losses were actually due to writedowns and other one-off items, and that it has increased staffing in recent periods.

Global marketing and Communications director Gianluca Pastore hit back on Thursday after several Italian newspapers said the company was in a deep financial crisis.

The most damning indictment came from an article by business daily Il Sole 24 Ore on November 30. The newspaper wrote that the Benetton Group will suffer heavy losses in 2016, having already lost €280m in the last five years, and that Alessandro Benetton's recent resignation from the group's board "exposes the deep, irreconcilable rift between the various factions within the powerful Veneto-based dynasty."

The article noted that "the problem for Benetton … is purely one of income generation, as its costs are higher than its revenues."

The newspaper also said: "The profits alone for Spanish group Inditex, owner of Zara and Bershka, are more than double Benetton's annual revenue. And Swedish giant H&M's net income has for years been equivalent to 10% of revenue... The Benetton store chain is by now a residual business for the family, compared to its diverse industrial and financial activities. All the more so since it is not profitable any longer."

But in a letter Pastore said that the group's consolidated 2015 revenue was €1.529bn, split across its regions with 40% generated in Italy, 30% in the rest of Europe, and 30% in Asia and Latin America.

In 2015, Benetton's total sales value, net of VAT, was roughly equivalent to €2.2bn revenue. He said this is the figure that should be referred to when comparing Benetton with other groups in the industry.

As for the €280m losses in five years, they are mostly due to non-recurring exceptional items, such as writedowns and restructuring costs. The letter also indicated that, in the period in question, the group's total number of employees has increased. Its debt was reduced to zero in 2015, its cash flow is positive and its planned investment for the 2015-17 period amounts to €180m.

Gianluca Pastore ended by stressing that Benetton has no intention of selling the Sisley brand.