Scion Of A Clothing Empire

15 November, 2011

Have you seen my videos on YouTube?” asks Alessandro Benetton, scion and executive vice-chairman of the Italian knitwear dynasty, through a wide smile.

The videos he is talking about show the 47-year-old executive, who could pass for a decade younger, in the grip of adrenalin sports. In one, he is wake surfing, in another he’s doing a full somersault while kite surfing.

Part of Mr Benetton’s desire to test himself in the extreme side of sports clearly comes from family connections. His wife is Deborah Compagnoni, three-time Olympic gold medallist and one of Italy’s greatest ski champions. But the second-born son of Luciano Benetton, the bespectacled primogenito of the Benetton clan who founded a clothing empire that spans 120 countries, suggests it comes down to something else too.

A graduate of Harvard Business School, Mr Benetton shares a restlessness for personal achievement with Italy’s other young scions such as John Elkann at Fiat and Roberta Armani, who carry the weight of dynasty on their shoulders. Hence the delight in adrenalin sports which he describes as “the fun of life”.

“I came to this conclusion,” he continues, in his office in Ponzano Veneto, a rural town in north-east Italy about 50km north of Venice. “If you have this kind of need to be energetic, it’s not a question of being able to switch it on or off. You need to focus it or it will consume you.”

Benetton began in this town and today is its largest employer and benefactor, funding schools, culture and, unsurprisingly given Mr Benetton’s passion, spectacular sports facilities.

Mr Benetton is frank, softly spoken and disarmingly at ease. The second eldest of four brothers, he became the logical candidate to take on the family clothing business, which includes the brands Benetton, Sisley and Playlife, after establishing himself as an entrepreneur. Following Harvard, where he studied with management guru Michael Porter, and a year working as an analyst at Goldman Sachs, Mr Benetton started the private equity business 21 Investimenti in 1992. It now has a €1bn portfolio of assets under management. He then chaired Benetton’s Formula One team for a decade, during which time it won a constructors’ prize and two world drivers’ championships with Michael Schumacher at the wheel.

“I have already been an entrepreneur; it was in my nervous system. I had worked in the world of private equity, I was cleaning the air conditioners in the [Benetton] factory when I was 10. I was at Harvard where they had studied Benetton as a case study. I’d seen the business from the inside and out.”

Mr Benetton still describes his time at 21 Investimenti, which is today part of the family holding companies, as the high point of his career. “I sweated six shirts to create it,” he says. “It was my most formative experience because it showed me how to look at things. There was another thing too. Being in private equity was also useful because I got to ask all the questions that I had as a child.”

He claims he did not lobby for the top job at Benetton. “If they had asked me directly, I would probably have said ‘no’,” he says. “What happened instead is that I was on the board, then the executive board, then they asked if I could be vice-chairman without responsibilities, then with . . . But it wasn’t difficult coming back. It’s not like being in chains.”

What went through his mind when he realised he was back for good?

He laughs. “It was like when people said when I was little: ‘what do you feel when you are going around all these shops with your name on them?’ And what I was thinking was: ‘Are the windows clean? Are the jumpers folded well?’ I had done a few trips with my father and that’s what he did.”

Today, he considers his role as bridging two worlds and helping transition from being run entirely by “the family”, as he refers to them, to bringing in more outside management. It is an uneasy evolution over which many Italian dynasties stumble and die and a challenge as Italy struggles with economic crisis. Speaking for his family, Mr Benetton says the future will be very different from the past, which has included, in recent years, a high turnover of chief executives at Benetton. “The company needs managers. I see myself as the conductor of an orchestra, and not like 20 years ago, when that person was also playing the violin,” he says.

Mr Benetton is keenly aware of the challenge: making Benetton relevant again in a retail world where it has been left in the dust by nimbler fast-fashion rivals Spain’s Inditex, owner of Zara and Bershka, and Sweden’s H&M. Sales at Benetton have risen less than 2 per cent in the past decade, while those at H&M have quadrupled and turnover at Inditex has increased sixfold.

Benetton’s market capitalisation has shrivelled to €690m from €4.2bn in 2000. For analysts its problems are twofold: a slow design and distribution system unable to feed shoppers’ desire for fast, cheap rip-offs of the latest runway fashions; and a dependence for 48 per cent of its sales on Italy where economic turmoil is wrecking consumer confidence.

Inside the company people talk of the sense of “energy and ferment” that Mr Benetton has brought to the business since he gained executive powers in 2007. He declines to talk about his plans but admits “competition is extremely high”.

A new advertising campaign is on the way that insiders hope will lift consumer recognition of the brand. Here, of course, Mr Benetton faces the legacy of his father and Oliviero Toscani, the Italian photographer who helped the brand gain fame and censure in the 1980s and 1990s with shock campaigns featuring Aids sufferers, a nun and priest about to kiss, and three human hearts with “black”, “white”, “yellow” written beneath.

I think there is still space for Benetton but the brand needs to be reinforced and reactivated,” he says.

Observers say Mr Benetton’s progress may be complicated because the family remain very present. Gilberto Benetton, his uncle, is the head of Edizione Holding which owns nearly 70 per cent of the clothing group. Luciano, his father, is chairman of Benetton, while siblings, Giuliana and Carlo are on the board.

Mr Benetton sees it differently. For him, it’s an example of evolving from the power and governance structure of Italy’s postwar years to a new generation. In other words, how the 70- year-old gerontocracy gives way to those 30 years younger.

Mr Benetton describes his father as “a very active sparring partner”. He says that he also has “the most complete operational understanding of the business . . . But his relationship with the company is very constructive. There are people who he still deals with because these are relationships that go back a long time. But he is also always the one who’s first to say: ‘Tell me, how I can help you?’ ”

More News From Financial Times

ADB urges Asia to help rescue eurozone

IMF warns on Chinese financial system

Merkel urges stronger union to back euro

Asia slips on Europe contagion fears

Japan back to growth as GDP rises 1.5%


Leave Your Comment
Fashion Giant Gap Inc Renews India Retail Talks

Fashion Giant Gap Inc Renews India Retail Talks

Boby Kurian 7 years ago
American fashion retailer Gap Inc has renewed interest for a possible foray into India’s specialty clothing market with a business development team from the $14-billion...
Former Reliance Trends chief's lifestyle e-store gets funding from Lightspeed, Helion

Former Reliance Trends chief’s lifestyle e-store gets funding from Lightspeed, Helion

Nandana Das 5 years ago
Arun Sirdeshmukh, former chief executive of Reliance Trends, has teamed up with Darpan Munjal (former CTO of Times Internet Ltd who had also worked at...
Footwear company SSIPL appoints bankers for IPO, scraps proposed pre-IPO funding round

Footwear company SSIPL appoints bankers for IPO, scraps proposed pre-IPO funding round

Diksha Dutta 4 years ago
SSIPL Retail Pvt Ltd (formerly Moja Shoes), a company which manufactures shoes for various international brands and is also a retailer for Nike in India,...
No Comments

Scion Of A Clothing Empire

Powered by WordPress.com VIP