Thriving on Controversy, Benetton Stays Out Ahead
TO lead is to follow no one, and for Luciano Benetton, founder and chief executive officer of the global apparel manufacturer Benetton Group Sp.A., following no one has been the secret to his company's burgeoning success.
Known not only for its colorful knitwear and sportswear, but also for its controversial advertising campaigns, Benetton has carved a niche for itself in the competitive world of fashion.
On a trip to Boston last week to accept an honorary degree from Boston University, Luciano discussed with the Monitor the company's past successes and future enterprises.
``If something is not working, we consider it our fault,'' Luciano said through an interpreter. ``The consumer, if we produce good products, will be generous with us.'' And, indeed, the consumer has been generous. Benetton is Europe's largest clothing manufacturer and boasts 7,000 retail stores in 120 countries. Last year, the company saw $1.76 billion in sales, up 9.5 percent from 1992.
Luciano founded the company in 1965 in Treviso, Italy, with one product - his sister's uniquely colorful, hand-knit sweaters. Today, Benetton has clothing lines for children, teenagers, and adults, plus shoes, handbags, cosmetics, and watches.
Luciano attributes much of Benetton's success to the fact that it is a family-run business. ``In this case, unity is strength,'' he said, explaining that each of the four siblings has his or her own area of expertise. ``It's not a trademark, but a family,'' said Luciano, who expects Benetton's management to remain in the family.
One of the ways Benetton has displayed its leadership is in advertising. While most companies in the clothing industry seldom stray from image advertising, Benetton has associated itself with everything from the crisis in Bosnia, to AIDS, to birth and death and racism. The purpose of such campaigns is to generate discussion of serious social issues while creating brand awareness, the company says.
Benetton's most recent ad campaign - no less controversial than earlier ones and under attack in France - shows a bloodstained T-shirt with a bullet hole in it and a pair of camouflage pants against a white background. The uniform belonged to a Bosnian soldier killed in the fighting. The only hint of Benetton in the ad is the company's logo in one corner.
Why has Benetton associated itself with events that loosely fit or don't seem to fit at all under the ``United Colors of Benetton'' slogan? ``We feel that this enriches us to have a greater number of points of view,'' Luciano said. ``Obviously, there's no particular place in which everybody will be in total agreement, so you get a variety of opinions.''
During the Gulf war, Luciano wanted to create a relevant campaign that related to the war. So Benetton came out with an ad that showed a war cemetery in France. The campaign drew heated criticism.
``We were criticized for our image of death, but that's what war is about,'' he said. ``War is about death.''
So Luciano decided to select a positive image for his next campaign, he said. The company used the image of a baby just seconds old with the umbilical cord still attached, to celebrate life. ``This was the most highly boycotted of all the publicity campaigns we ever did,'' Luciano said, ``and yet we thought it was optimistic.''
The company spends 4 percent of its annual budget on advertising, he said, but does no market research for its ad campaigns.
Benetton's advertising will take a completely different turn in the coming months. The subject of its next ad campaign will be Fabrica, the company's new art school that opens this fall.
Scouts will select 50 students between 18 and 25 years old from around the world to study at a restored 17th-century villa near Benetton's Treviso factory. The school and students' expenses will be underwritten by the company.
All in all, Luciano said he considers Benetton to be fairly universal already and does not intend to pursue new markets any time soon.
``I can't think of anywhere we would go,'' he said. He cites Japan and Korea as fast growing markets and predicts future success in India and China.