Benetton losses widen in 2016
Benetton is not yet back on track, but is still pursuing its investment plan. The clothing group has struggled to take off despite its reorganization that began in 2015, which saw the company refocus on its two main brands, United Colors of Benetton and Sisley, by completely changing its structure.
In 2016, the Italian brand had a turnover of 1.376 billion euros compared to 1.504 a year earlier, down 8.5%. The decline was related to the large number of store closures and also due to, as the company points out, "the decline in sales, especially through indirect sales channels, and the poor performance of stores in direct management, especially in Italy, France, Germany, Poland and Turkey ".
Benetton Group also nearly doubled its net loss from 46 million in 2015 to 81 million euros a year later, while it recorded an operating loss of 38 million compared to 19 million the previous year.
The results were published in Edizione’s 2016 balance sheet, the holding company which controls 100% of Benetton and the empire of the eponymous family. "In 2016, Benetton Group suffered from continued economic stagnation in Europe, with a deterioration in sales and profitability which resulted in a weakening of its financial position," the report said. Cash flow going from 85 to 24 million in one year.
The textile group says, however, that "it has not slowed down its ongoing transformation projects or its investment plan, and is on track to achieve them as planned without falling into debt".
Moreover, Benetton accelerated its investments last year, since they increased by 39.2% compared to 2015, reaching 45 million euros. Nearly 330 outlets were opened or repositioned in 2016.
Italy is now the company's second largest market with 36.5% of sales, behind Europe (38.8%) and ahead of Asia and Latin America (24.7%). Sales in the three regions still declined.
As the report concludes, "the road ahead is still long".
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