The licensed boutiques are the easiest, simplest and fastest way to give the client an item right off the factory line at a good price, Benetton officials contend. "What we tried to do is try to figure out a way to best give consumers what they want." "Benetton is a philosophy," the Italian businessman explained. It's not possible to deliver through a department store because its effect would be diluted people would be selling it in different ways" than what Benetton's formula dictates, he said. Although Benetton appeared to understand much of the English spoken, he always answered in Italian. "As far as we're concerned, it would be corruption" to sell Benetton goods in a department store, said the 50-year-old Benetton through an interpreter. Throughout the world, Benetton has followed a simple formula: It bypasses department stores and sells its own manufactured goods directly to consumers through its own boutiques, which are licensed to local businesses. It's hard enough to sell the same toothpaste to both European and American consumers," Pennington said. Perhaps even more significant, Benetton "has managed to cross cultures and succeed, which is almost unheard of in marketing. Additionally, "they have taken a relatively limited line and a highly focused line" of clothing and have succeeded in attracting a continuing stream of customers to the stores. "Like most companies I'm aware of that have done extraordinarily well, Benetton has thrown out the rule book and done things conventional wisdom said couldn't be done."įor example, Pennington said, Benetton has "set up 250 stores in no time at all," with many concentrated in a small geographic area. "I think they are a fantastic success story," said Alan Pennington, president of the New York retail consulting firm, Pennington Associates. That means we have to stay with the masses and know what the market is all about. Four times each year, we create a fashion collection.
"We have a lot of European experience, and we have a European vision of fashion that gives us a leg to stand on. While some financial analysts wonder whether Benetton is only a fad that will experience a slump, just as Levi's and other denim companies did in the 1970s, Luciano Benetton himself is confident the chain is here to stay. Their formula of offering a very narrow but deep selection of clothing is working very beautifully for them." "The company has emerged as a powerful competitor in the American retail marketplace. "You are seeing a company that is sweeping America," noted Kurt Barnard, president of Barnard's Retail Marketing Report.
Only a handful of clothes are displayed on racks the rest are folded neatly and stacked colorfully on modern shelving that lines the walls, from floor to ceiling. The shops are distinguished from most clothing stores by their sparse furnishings. Within the next three years, Benetton hopes to quadruple the number of its U.S. But already the company has more than 250 shops across the country, with at least one of its uniquely styled boutiques in every state. Selling clothing in more than 53 different nations, including four Iron Curtain countries, Benetton has become both the world's largest consumer of wool and maker of knitwear, with revenues of $350 million a year.īenetton came to the United States only five years ago. Last year, Benetton sold about 39 million garments in its 3,000 shops around the world - shops that, like fast-food restaurants, are run by local owners under a type of franchise system. They are the consuming generation," Benetton said earlier this month, while in town on one of his frequent U.S.
"The same kids that are eating and consuming hamburgers are the same kids buying our clothing. And like the fast-food chain, it sells them worldwide. With its Kelly green signs almost as prominent and prolific as the famous Golden Arches (in midtown Manhattan alone, there are a dozen Benetton shops within five miles of one another), the 20-year-old company is dishing out sweaters, jeans and other casual clothing almost as fast as McDonald's sells hamburgers. "If people are too busy eating hamburgers, they cannot buy my clothes," he said.Īn odd analogy perhaps, but not to the business community, where many executives call Benetton the "McDonald's" of retailing.
Luciano Benetton once joked that the only competition to his Italian clothing boutiques were fast-food chains.