By  on May 16, 2005

Ponzano Veneto, Italy — Luciano Benetton turned 70 last Friday. His round spectacles and waves of white-gray hair are as distinctive as the company his family founded.

Benetton, the company Luciano started with his brothers Gilbert and Carlo and his sister Giuliana, was always one step ahead of the industry, whether it involved quick-response garment dyeing or shock advertisements with a social statement. Arguably, times have changed, with industry experts praising Zara's business model and Hennes & Mauritz grabbing headlines as it signed Stella McCartney. But those developments haven't deterred Benetton from pondering its future as it celebrates its 40th anniversary this year.

"The world was different,'' the Benetton chairman told WWD in an exclusive interview at the group's headquarters, a 17th-century frescoed villa here. "It was much simpler. Our collections were much smaller. We saw great results for many, many years, just as we played with different colors. Later on, competition increased, and now you always have to be looking for new spaces to attract the attention and interest of the customer."

Benetton is facing what many have said is the most challenging period of its four-decade history. There has been a lot of criticism directed at the firm: that it has missed trends, relies on an outdated business model and lacks a clear brand identity in an ever-crowded mass market for clothes. Profit warnings and missed sales targets haven't bolstered market confidence.

Armando Branchini, vice president of the consultancy Intercorporate, summed up a widely held belief regarding one of Italy's most famous labels: "They had a brand and product identity until the end of the Eighties. Then at the beginning of the Nineties, it started to weaken."

At the same time, Branchini expressed optimism that the company is on the right track to reposition itself and create stronger, more interesting clothes, rather than compete solely on the base of price.

Luciano Benetton is quick to defend his empire's strategy and structure. But he also admits that the company is in a transition phase, as the family reconsiders its role in the day-to-day operations and Benetton grooms his 41-year-old son Alessandro to succeed him. A board meeting scheduled for Monday is expected to nominate Alessandro to be co-vice president, a title he would share with his uncle Carlo.

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