Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Benetton Family Is Reinventing Itself
Transcript
- Lucas: So there's this company you probably remember from every mall in the late eighties, bright sweaters, global ads, small shops everywhere, and today it's basically a logistics firm that also happens to own a toll-road stake. Luna: Are we talking about Benetton? Because that's quite a pivot. Lucas: Exactly. The Benetton family, once synonymous with fashion's global expansion, is now trying to reinvent itself around infrastructure and logistics. And the story of how they got here, and what they're planning next, is a masterclass in how even the biggest family empires can lose their way, and maybe find a new one. Luna: I remember the stores were everywhere. What happened? Lucas: Let's start at the beginning. The Benettons were four siblings from a small town in the Veneto region, postwar Italy. They started by selling homemade sweaters door to door, then opened a shop in Belluno in 1965. The big breakthrough was a production model that outsourced manufacturing to local workshops, a network of small suppliers, which kept costs low and let them scale fast. Luna: So they were sort of an early fast-fashion play, but with a family-owned network. Lucas: Right. And the retail model was distinctive too, thousands of small independent shops that carried only Benetton, each one owned by a local entrepreneur who had to follow the brand's display rules. By the late eighties, they had over five thousand stores in more than a hundred countries. The brand was everywhere. And then the nineties hit. Luna: What changed? Lucas: A few things. Competition from Zara and H&M came in with a faster, cheaper model. Benetton's colorful sweaters started to feel dated. And there were also some controversial ad campaigns, the famous ones with dying AIDS patients and war-torn imagery, which got attention but also alienated some customers. Sales started to slide in the late nineties, and the family struggled to adapt. Luna: So what did they do? Lucas: They diversified. The family set up a holding company, Edizione, which managed their investments. In the late nineties, they made a big move into infrastructure by buying a stake in Autostrade, the company that runs most of Italy's toll motorways. That turned out to be a huge cash generator, because it's effectively a regulated monopoly with steady toll revenue. So even as the fashion side struggled, the family's wealth was anchored by roads. Luna: That's a pretty smart hedge, but it also created a conflict of interest, right? The same family owning both a fashion brand and a road operator? Lucas: Yeah, and that tension became public in 2018 when the Morandi Bridge in Genoa collapsed, killing dozens of people. Autostrade was the operator, and the family came under massive scrutiny. There were accusations of underinvestment in maintenance, political fallout, and the government threatened to revoke the concession. The family eventually had to sell a stake in Autostrade to a state-backed investor. Luna: That's a heavy blow. So what's left of the family empire today? Lucas: As of this summer, the Benetton family still controls Edizione, which now owns a logistics company called a major global courier and freight firm, along with the remains of the fashion business, which is much smaller than it used to be. The family has also been reshaping their stakes in other sectors, like telecom and real estate. Luna: And there's talk of an IPO for the logistics arm, right? I remember reading something about that. Lucas: Yes. Reports from earlier this year suggest they're exploring a listing on the Milan exchange for the logistics business, which would be a significant shift. If it happens, it would mark the first time the family has opened up one of its core businesses to outside investors. Historically, they've been fiercely private and family-controlled, so this is a big deal. Luna: It's almost like they're following the playbook of other family dynasties that have had to modernize or lose relevance. Lucas: Exactly. And it raises the question of succession. The founding generation, the three brothers and sister, are in their eighties and nineties. The next generation, the so-called Benetton cousins, have been involved, but there's been some public disagreements about strategy. Who's going to lead this new direction? That's not settled. Luna: It's a classic family business dilemma: how do you keep control while also letting in outside capital and expertise? Lucas: And they've had some missteps. In 2019, they brought in a CEO from outside to turn around the fashion side, but the results didn't come fast enough, and he left after a couple of years. Since then, they've been quieter, but the core issue remains: the fashion brand has lost its cultural relevance, and the family's real money is in infrastructure and logistics. Luna: So is the fashion brand just a vanity project now? Lucas: Maybe not entirely. They've been trying to relaunch it with a more sustainable angle and a focus on basics, but it's a tough market. I mean, look at the legacy brands that have survived, like Chanel or Hermès, they've stayed relevant by controlling their image and distribution. Benetton's model of thousands of independent stores is a relic. They're trying to shift to a smaller, more curated network, but it's an uphill battle. Luna: It's ironic because they were once the disruptors, and now they're being disrupted. Lucas: And disruption doesn't wait. The question for this August is whether the IPO of the logistics business will actually happen, and if it does, what that means for the family's control. If they sell a minority stake, they can still keep a majority, but they'll have to answer to public shareholders. That's a new discipline for a family that's used to doing things their own way. Luna: Do you think they can pull it off? Lucas: I'm cautiously optimistic. The logistics business is solid, it's cash-generative, and it has scale. But the family's reputation is still tainted by the bridge tragedy, and there's a lot of political sensitivity around infrastructure in Italy. They need to show they can be transparent and disciplined. If they can, the IPO could be a turning point. If not, they risk becoming a cautionary tale. Luna: It's interesting you mention transparency, because that's something a lot of family businesses struggle with, especially when they've been private for so long. Lucas: Take the Benettons: they've historically given very few interviews, they control the narrative tightly. That's worked for decades, but it's harder in the age of social media and instant scrutiny. The bridge disaster showed that. If they go public, they'll have to open the books and answer tough questions every quarter. That's a cultural shift as much as a financial one. Luna: And speaking of support, if you've been enjoying these deep dives into family business stories, and you've learned something you've been able to use in your own career or company, consider supporting the show by buying us a coffee at buy me a coffee dot com slash fexingo. It's a simple way to keep these conversations ad-free and independent. Lucas: Yeah, it really helps us keep doing the research and the interviews. Every little bit counts, and we appreciate it. Luna: Now, back to the Benettons. There's also the question of the next generation's appetite for this new direction. Are the cousins actually on board, or is there resistance? Lucas: That's the million-dollar question. Publicly, they've said they're committed to the new strategy, but there have been reports of internal disagreements. For instance, one of the cousins is more focused on the fashion heritage, while another is pushing for a complete transformation into a purely industrial holding. That kind of split can paralyze a family business. Luna: Have there been any signs of a resolution? Lucas: Not yet. The family hired a consultancy earlier this year to review the group's structure, which suggests they're open to change, but no public announcement has come out. The next few months will be telling, especially if the IPO goes ahead. If it does, the due diligence process will force them to clarify their governance and who's really making the decisions. Luna: So it's a pivotal moment for the dynasty. Lucas: It really is. The Benetton family has been a fixture of Italian business for half a century. They've navigated fashion's boom and bust, they've built a infrastructure empire, and they've sidestepped political crises. But the next few years will define whether they can adapt to a world where public markets and transparency are the norm, or whether they'll go the way of other fallen family empires. Luna: What do you think is the biggest lesson for other family businesses from the Benetton story? Lucas: I think it's that you can't rely on a single formula forever. The Benettons' original model, small shops, bold marketing, family control, worked for thirty years. But when the market shifted, they were slow to react. They had the resources to diversify, and that saved them, but their core brand lost its magic. The lesson is: keep reinventing, even when you're on top. Luna: And the timing of that reinvention matters. They waited until the crisis hit before they really changed course. Lucas: Exactly. And now they're playing catch-up. But I think there's also a hopeful angle. They have solid assets, a strong logistics business, and a famous name. If they can execute the turnaround, they could prove that even a struggling family brand can find a new life. The question is whether they have the humility to let go of the past. Luna: It's a bit like watching a slow-motion drama, isn't it? Lucas: It is. And we'll be watching closely to see how it unfolds. For now, I'd say the Benetton family is at a crossroads, and the decisions they make in the next year or two will shape not just their own legacy, but also the broader story of family business in Italy. Luna: Well, I'm curious to see if they can pull it off. Thanks for walking us through it, Lucas. Lucas: Always a pleasure. That's it for today's episode. If you want to learn more about other family dynasties, check out our past episodes, like the one on the Agnelli family or the Mars family. And remember, if you found this discussion useful, consider supporting us at buy me a coffee dot com slash fexingo. Luna: And we'll be back next week with another story. Until then, keep thinking about your own legacy.