Benetton has been for many decades a synonym of color, good vibes, very active social campaigns and an incredible personality in its stores. We all think of Benetton and “all the colors of the world” comes to mind, right?
Well now, the most colorful brand in the whole sector is living one of its worst moments, they have had to close more than 400 stores during this 2025. It is not a small decision, nor easy to make, but it is the result of years of financial problems that have been accumulating, and that now have led the company to make this drastic decision.
The model that made them grow has become a very difficult burden to sustain in the market, especially now that consumer habits are changing. For Benetton, debts have skyrocketed, there have been very important departures inside the company and even the withdrawal of the founder in the middle of quite direct accusations about poor management…
It simply stopped working.
For years, Benetton did not only sell clothes, it sold an identity, there were social campaigns everyone talked about, sustainability (before it was trendy) and an aesthetic that could be recognized from kilometers away. They had everything for many years.
But their franchise network has become a structural problem, managing it costs money, a lot, and sales keep falling.
The brand has confirmed the closure of 419 stores worldwide, of them, 180 had already closed before the end of 2024… They need to stop an uncontrollable debt and there are not many more options.
Accusations, resignations and red accounts
The situation exploded publicly when Luciano Benetton (the founder) decided to leave the company directly accusing the CEO of having “sunk the accounts” for four years. And the accusation is not small, they talk about losses of almost 100 million dollars. A company completely broken inside, with very little room to maneuver… and in the middle of a fight for survival.
Italy, the deepest wound
And yes, nobody is a prophet in their own land, but in Italy (in the south) is where more debts accumulate (reaching 30 million euros)… Hitting bottom at home.
Closures and massive layoffs
Other countries like Spain, where Benetton was very strong in the 80s and 90s, will close 31 of the current 300 stores, and the massive layoff will affect 25% of the staff.
Why did Benetton lose weight?
Because the market is being complicated, brands like Zara, Primark… And now Shein, with very low prices, new collections every two weeks, a very strong online market, are making legacy companies unable to stay afloat. The market, in the end, is adapt or die, and for now, Benetton is not keeping up with the pace of its competitors.
And not for wanting to maintain its identity, careful, currently people value a lot companies with social conscience, but it is also true that the economic situation does not allow wasting money, and many prefer to spend “little money on many garments”.
Fast fashion sweeps
Fast fashion is dominating the market, as we say, people want cheap price, speed and constant novelty, we all love wearing new clothes and saying how little it cost us, right?
Well now, Benetton will have to play survival, close, cut staff and withstand the storm, they need time and to become what they once were.
It is a big trial by fire, even more when we talk about a cultural icon, a symbol of diversity and an experiment that tried to unite ethics and fashion within everyone’s reach.
Now, they will need to reconnect with a consumer that lives in another world, who buys differently and thinks differently. Will they succeed?