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Remember the bright colors hyped by Benetton two decades ago? Benetton was one of the hottest brands of the 1980s and a leading global retailer, known for provocative ads that kept the brand edgy even when the design of the clothes seemed conventional. However, after losing its appeal to most customers, the company is ramping itself up again to compete with fast-fashion retailers like Zara and H&M.

For example, Benetton has hired a leading designer who worked for Ralph Lauren and Escada. To gain design inspiration, the company looks to European fashion shows and then places photos from these prestigious collections next to its design templates. The designer essentially must “translate” the designer looks to a Benetton price range by using cheaper fabrics. Furthermore, Benetton is working hard to improve efficiency by ensuring that the designs match the costs involved.

In addition to creating great designs, Benetton is building a logistics system to compete with the fast-fashion companies. It has invested more than $160 million in its supply chain, which also includes brands such as Sisley, Killerloop, and Playlife. Benetton outsources production of high-margin accessories and maintains a worldwide distribution network. With this system, the company can reroute merchandise during shipment if another store needs more clothes. Its network also allows small inventory shipments, sent every two weeks, though it can ship in seven days if a product is in real demand.

From its start as a design and logistics leader, Benetton has had to transform its strategy to compete in the competitive fashion market by not just copying runway designs but also improving its logistics system. The logistics system is just as important as the design of the clothes, because clothing that is not in stores cannot sell and, by the next week, simply isn’t cool anymore!

Discussion Questions:

1. How is Benetton’s supply chain benefiting its operations?

2. Will Benetton be able to revive its brand?

Stacy Meichtry, “Benetton Picks Up the Fashion Pace—Tracking Trends with Fast Deliveries, the Italian Brand Makes a Comeback,” The Wall Street Journal, April 10, 2007.