Luciano Benetton
1935–

Chairman, Benetton

Nationality: Italian.

Born: May 13, 1935, in Treviso, Italy.

Family: Son of Leone (owner of a car and bike rental business) and Rosa Carniato; married Teresa (maiden name unknown), 1961; children: five.

Career: Benetton Group, 1965–, chairman; Italian Republic, 1992–1994, senator.

Awards: Master in Business Administration Honoris Causa, Instituto de Empresa, Madrid, 1992; honorary degree in law, Boston University, 1994; Laurea in Economia Aziendale Honoris Causa, Università ca' Foscari di Venezia, 1995.

Publications: Io e i miei fratelli, 1995.

Address: Villa Minelli 1, Ponzano, Treviso, Italy; http://www.benetton.com.

■ With an aggressive marketing style and a precise target social group—teenagers and youngsters who were not particularly wealthy—Luciano Benetton transformed the small wool sweater firm that he founded with his sister Giuliana in 1965 into a global phenomenon studied by international business scholars. Throughout the years the group's core business remained clothing, and Benetton expanded in the sector to include not only the United Colors of Benetton but also a children's line sized 0–12, the more fashionable and trendy Sisley, and the sportswear brands Playlife and Killer Loop. Through the family's company, Edizione Holding, Benetton also controlled highway and urban catering services, infrastructures and services for mobility and communications, real estate, and agriculture. Though a global phenomenon, Benetton's management style was firmly rooted in the economic and business heritage of northeastern Italy, which combined a strong artisan tradition with an abundance of labor due to shrinking agricultural production.

THE LEGEND OF THE ORIGINS

As with all phenomena that attain a near-mythical status, the Benetton Group has a legend about its founder. According to the story Luciano, after the sudden death of his father, left school at age 14 and worked in a clothing store to support his family. He sold his bicycle in order to buy the company's first knitting machine. In 1965 Luciano, together with his sister and his two brothers, set up a small company producing pullover sweaters. From the start the tasks were diversified: Luciano acted as the marketing representative, while Giuliana designed the products and was in charge of production.

More important for the development of the group than Luciano's bike, however, was the founder's trip to Scotland. Here he became acquainted with a wool-softening process, which allowed manufacturers to knit in off-white yarn. The wool was dyed only at the last stage of production, an innovation that allowed the firm to keep up with ever-changing fashion trends. The bright colors that resulted from this process became the distinctive trademark of Benetton.

DEVELOPING THE GLOBAL BUSINESS

Luciano was the mind behind the so-called "industrial fashion," fashionable clothes that were sold through a cost-effective system of production and distribution. Success arrived almost immediately, and Benetton shops began to open throughout Europe, even in the challenging Parisian market. Luciano did not opt for centralized production and wide distribution, and his intuition regarding this crucial business decision paid off. He created his own clothing empire through subcontracts and franchising. Benetton licensed out most manufacturing to smaller textile producers and specialized in design, dying, and cutting. Through franchise agreements he contracted with independent retailers so that they would stock only Benetton clothing. Thanks to this marketing strategy and to profitable exchange rates in the 1980s and the early 1990s, the group was able to make surprising gains given the context of recession in which it operated.

During the 1980s Luciano also started to diversify the group's industrial activities with the purchase of Toleman's Formula One team, the sponsorship of Treviso's volleyball team, and the commercialization of Benetton watches, makeup, and perfumes. Benetton understood that the home market was saturated and started to open stores in the new American and Japanese markets.

FASHIONABLY SHOCKING

From the 1980s until 2000, Benetton collaborated with the advertising photographer Oliviero Toscani to create promotional campaigns that became as distinctive to the firm as its clothing. At first the advertisements focused on multiracial and multicultural themes. Toscani and Benetton rejected the idea of creating standard fashion photographs simply featuring sexy models and stunning clothes: "With Benetton, we started out with the notion of color. By definition, Benetton means colors. So, to convey this idea of colors, we showed a group, made up of people with different colored skin. It was fantastic, so exhilarating to show the products in such a new and simple way" ("The Company's History," benetton.com). Yet, as the group began to face its first serious crisis with lawsuits from enraged franchisers who claimed not to have been adequately supported, advertising campaigns increasingly featured shocking images. They included an AIDS victim on his deathbed, an African guerrilla holding a Kalashnikov rifle and a human leg bone, a boat overcrowded with Albanians, a car in flames after a Mafia bombing, and even a series of male and female genitals.

These scandalous images produced heated debates. Benetton claimed to be drawing attention to social issues that were being shunned by the establishment: "We are forging a new form of communication…. We spread no lies. We say, in this world there is sickness, war and death" ("The Company's History," benetton.com). His detractors claimed that such advertising, far from rendering consumers socially conscious, subordinated social conscience to shopping.

GLOBAL MEETS LOCAL

In spite of the controversies about his advertisements, Benetton managed to retain a clear image for his group. He was not involved in the numerous judicial inquiries that caught many Italian politicians and businessmen during the 1990s. He also served as an Italian senator for the center-left Republican Party from 1992 to 1994, although he was largely disappointed and frustrated by that experience. As he remarked, "Running for office was a form of protest, I had hoped that everybody would roll up their sleeves and get to work but it wasn't like that" ("Interview with Foreign Press," www.madein-italy.com).

By the middle of the 1990s Benetton had changed his distribution strategy. Rather than relying on the capillary network of small shops with which Benetton began, the commercial organization switched to a program of investment in megastores, some of them controlled directly by the group. Given their large dimensions and their prestigious locations either in historic buildings or in commercial centers, they formed distinctive urban landmarks. Benetton expanded into more than 120 countries with 5,000 stores. Despite the global expansion, however, in the early 21st century both the group and its founder remained inextricably linked to northeastern Italy. Older employees maintained that the Benettons still talked to them in the local dialect rather than in formal Italian. In addition, the group's close relations with its local origins were embodied by the cultural activities of the Fondazione Benetton Studie Ricerche and through sports programs in a vision that went beyond athletic excellence to focus on the community building aspects of athletic teams.

See also entry on Benetton Group S.p.A. in International Directory of Company Histories.