MILAN — Benetton Group SpA put a former Fiat executive in the driver’s seat Monday after posting its first-ever full-year loss.
This story first appeared in the April 1, 2003 issue of WWD. Subscribe Today.
Silvano Cassano, president of Fiat’s consumer services unit since last year, will become chief executive officer of Benetton on May 12, following the firm’s annual meeting. He will succeed Luigi De Puppi, who was expected to leave after completing the firm’s expensive exit from the sporting goods business, which weighed heavily on 2002 results.
Bogged down by write-offs from sporting goods ventures it has since sold, Benetton posted a net loss, as expected, of $10.6 million for the year ended Dec. 31, versus net income of $160 million in 2001. Operating profit slid 15.1 percent to $262 million from $308.5 million. Benetton said that stripping out the write-offs and other one-time costs, its net profit would have been $138.6 million, a figure it expects to surpass in 2003.
Revenue slid 5 percent to $2.15 billion from $2.27 billion as stable apparel sales compensated for a steep drop in revenue at the sports division. Dollar figures have been converted from the euro at current exchange rates.
Before assuming the presidency of Fiat’s consumer services unit last year, Cassano headed up the carmaker’s leasing and financial activities. Earlier, he was vice president of European operations for Hertz.
Benetton said in early March that De Puppi “reached his objectives” by selling off the company’s struggling sports assets, which include the Nordica and Rollerblade brands. On Friday, Benetton agreed to sell its Prince and Ektelon brands to Lincolnshire Equity Fund II LP for $39.4 million.
As reported, news of De Puppi’s departure coincided with an announcement that the Benetton family was relinquishing its daily management role to a new set of executives. Luciano Benetton will stay on as chairman but in an almost “honorary” capacity, the company said.
That management shakeup comes amid increasing competition in Italy’s moderate market, which is dominated by small, family-run stores and until recently, few chains. Hennes & Mauritz AB will open its first Italian store in Milan come September. Inditex’s Zara opened a Milan flagship last year and has plans to open three to five more stores in Italy next year.