BENETTON MAPS GROWTH ON NET AND IN THE U.S.
Byline: Anne D’Innocenzio
NEW YORK — Benetton SpA will be selling its clothing in cyberspace by yearend. And the retailer, which scaled back its growth plans in the U.S. for most of the Nineties, is now looking to step up the expansion pace here.
That was just some of the news revealed at an Italian industry luncheon, held Tuesday at the Pierre Hotel, to honor Luciano Benetton, a founder, who discussed some of the company’s plans and his thoughts on its controversial death-penalty advertising campaign.
The luncheon was hosted by GEI, a consortium of Italian and American business executives, which paid tribute to Benetton for his contributions to the Italian economy and global commerce.
The Internet presents big opportunities for Benetton, though he declined to offer sales projections.
“The fact is that everything we know today about the Internet is still only the tip of the iceberg. We can only attempt to imagine how it will change our way of life,” he said, in a speech delivered in Italian. “The new economy seems to wipe out all the traditional competitive advantages of big, established companies.”
In an interview following the address, Benetton, through a translator, said that the company has hired Arthur Andersen Consulting to help develop its e-business.
“We are putting a lot of energy into the project,” he said, adding about 50 people so far have been hired to develop the e-commerce site. The initial launch will feature a selected number of styles from the company’s Benetton brand, as well as from its other collections like Sisley, its contemporary line.
After 10 years of pulling back its growth plans in the U.S., Benetton is getting more active here. Currently, the U.S. accounts for 15 percent of the company’s overall business, but Carlo Tunioli, president of U.S. operations, estimates it could be 20 to 25 percent over the next few years.
The strategy includes opening about 10 to 15 stores a year starting next year, and expanding existing stores in such key markets as Chicago, San Francisco and Los Angeles, Tunioli said.
The company, which a year ago began taking control of its European stores, will be shifting toward corporate ownership of its American stores over the next couple of years. Benetton owns its flagship at 597 Fifth Avenue here.
The goal is to give all the stores a consistent merchandising message, according to a spokesman.
The average size of Benetton’s stores is about 3,000 to 3,500 square feet, but the new prototype will be from 5,000 to 7,000 square feet, Tunioli said.
In his address, Benetton also talked about the growth potential for Benetton’s portfolio of sports brands. They are Nordica, Killer Loop, Prince and Rollerblade. The firm’s sportswear clothing lines are under the Playlife and Killer Loop labels. He noted that the Italian Olympic Committee has chosen Playlife and Benetton as official suppliers of apparel for its Summer Olympics team in Sydney this year. Benetton officials later said they are considering opening stores in the U.S. under the Playlife brand. Currently, there are 150 Playlife stores in Europe.
The company’s Sisley brand, which offers more sophisticated contemporary clothing, also promises growth opportunities. The retailer owns stores in Manhattan and Atlanta and plans to take over control of its licensed stores in Washington and Los Angeles.
Benetton didn’t want to elaborate on the collapsed apparel venture with Sears, Roebuck, which ended in February. The exclusive collection for young men, juniors and misses’ was launched to much fanfare last fall under the Benetton USA label, but Sears pulled the plug, citing the controversy over the death penalty ad campaign.
“I was very sorry to see it interrupted, because it started so well,” Benetton said.
Sears’ move, however, didn’t seem to change Benetton’s position. In his address, Benetton took the opportunity to vigorously defend the company’s stance on its controversial advertising.
“I am truly sorry to have caused new pain to the families of victims or reopened old wounds,” he said. “That was certainly not our intention. I have received some dramatic letters that have move me greatly, including those that criticize us for having transformed condemned murders into communication stars.
“We never intended to publicize anyone’s crimes or take the side of a guilty party,” he continued. “To the contrary, our campaign was intended simply to make a small contribution to the debate about capital punishment, a debate that continues all over the world, including the United States.”