When Luciano and Giuliana Benetton, both grown up under the harsh conditions of war and post war Italy, founded Benetton group in 1965, they probably did never dream that one day their company would among the most famous in the fashion industry. Yet, 34 years later, Benetton is present in 120 countries and Edizione Holding, the holding company of the family is now making a yearly turnover of XXX billion Lira1. Not at least due to their controversial advertising campaigns which sparked strong reactions around the world, from outright ban to art awards, Benetton has become known worldwide.
After the opening their first store in 1968 with a surface of only 40 square metres things were looking upwards soon. With the first successes, Luciano's and Giulinana's younger brothers, Gilberto and Carlo joined the business and since then Benetton has always relied on family and friends in their growing need for executives2. Thanks to an attractive design of their products with a bold choice of colors, a franchise system which allowed for expansion without large investments, a closely coordinated production and innovations in manufacturing techniques, Benetton rapidly conquered market shares, first in Italy, then in Europe and overseas3.
In 1985, their annual turnover had reached 900 billion Italian Lira and their network included 3000 point of sales, mostly in Europe4. Since the late 1980s, Benetton is firmly engaged in a diversification strategy. Starting with the acquisition of ski-boot manufacturer Nordica in 1989, the group first moved into the sportssector. Other sport brands were acquired soon afterwards, like Ki?? stle for skis and mountain bikes, Killer Loop for snowboards, Prince for tennis rackets or Rollerblade for inline skating.
In 1992, these activities were bundled in a separate division, called Benetton Sportssystem. The production of sports equipment was supplemented by the production of sports wear, the aim being to provide the customer with both the equipment and the clothing, thus realizing synergies from the existing textile manufacturing facilities5. Benetton Sportssystem is the fastest growing division of Benetton group and it already represent 21,3% of turnover6. With 55% of its sales realised in North America, it is also much less focused on Europe7.
While Benetton Sportssystem was still in connection with its original business, in the 1990s Benetton diversified into areas which were rather far from it, like retailing or the restaurant business. The acquisition of shares in Autogrill, world leader in catering services for travelers, and GS Gruppo, leader in the Italian food distribution sector, left the Benetton family with 700 supermarkets, 21 hypermarkets and over 650 restaurants, producing a combined turnover of more than 13,000 billion Lira (more than three times the turnover of the actual Benetton group)8.
Reasons for this diversification into areas remote from their core business might be found in the wish to take advantage of the privatization of national industries presently in progress in Italy and to profit from the potential development in the food retailing sector9. At present (1998), the different acquisitions and participations of Benetton are integrated into Edizione Holding, the holding company of the Benetton family, which also includes Benetton group itself. Edizione Holding realised in 1998 a consolidated net turnover of 9,148 billion Italian lire and net operating profits of 268 billion lire.
After the opening their first store in 1968 with a surface of only 40 square metres things were looking upwards soon. With the first successes, Luciano's and Giulinana's younger brothers, Gilberto and Carlo joined the business and since then Benetton has always relied on family and friends in their growing need for executives2. Thanks to an attractive design of their products with a bold choice of colors, a franchise system which allowed for expansion without large investments, a closely coordinated production and innovations in manufacturing techniques, Benetton rapidly conquered market shares, first in Italy, then in Europe and overseas3.
In 1985, their annual turnover had reached 900 billion Italian Lira and their network included 3000 point of sales, mostly in Europe4. Since the late 1980s, Benetton is firmly engaged in a diversification strategy. Starting with the acquisition of ski-boot manufacturer Nordica in 1989, the group first moved into the sportssector. Other sport brands were acquired soon afterwards, like Ki?? stle for skis and mountain bikes, Killer Loop for snowboards, Prince for tennis rackets or Rollerblade for inline skating.
In 1992, these activities were bundled in a separate division, called Benetton Sportssystem. The production of sports equipment was supplemented by the production of sports wear, the aim being to provide the customer with both the equipment and the clothing, thus realizing synergies from the existing textile manufacturing facilities5. Benetton Sportssystem is the fastest growing division of Benetton group and it already represent 21,3% of turnover6. With 55% of its sales realised in North America, it is also much less focused on Europe7.
While Benetton Sportssystem was still in connection with its original business, in the 1990s Benetton diversified into areas which were rather far from it, like retailing or the restaurant business. The acquisition of shares in Autogrill, world leader in catering services for travelers, and GS Gruppo, leader in the Italian food distribution sector, left the Benetton family with 700 supermarkets, 21 hypermarkets and over 650 restaurants, producing a combined turnover of more than 13,000 billion Lira (more than three times the turnover of the actual Benetton group)8.
Reasons for this diversification into areas remote from their core business might be found in the wish to take advantage of the privatization of national industries presently in progress in Italy and to profit from the potential development in the food retailing sector9. At present (1998), the different acquisitions and participations of Benetton are integrated into Edizione Holding, the holding company of the Benetton family, which also includes Benetton group itself. Edizione Holding realised in 1998 a consolidated net turnover of 9,148 billion Italian lire and net operating profits of 268 billion lire.
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