Speaking just days before the appointment of Gerolamo Caccia Dominioni as Benetton's new chief executive in March, group deputy chairman Alessandro Benetton outlined plans for a "revolution", designed to help the company move on from the executive rifts that beset it last year.Benetton said that he was looking for change to come from the bottom, adding that he wanted a much stronger management team and a clearer distinction between management and shareholders to enable the company to take advantage of growth markets, such as China and India, and respond effectively to the challenge of rivals including H&M and Zara.
Caccia Dominioni, who leaves his post as vice-president and chief operating officer at Warner Music International, will be responsible for leading the revolution. When he takes up his new position on 1 June, it will be more than six months since his predecessor, Silvano Cassano, resigned amid clashes over the company's international strategy. CFO Pier Francesco Facchini resigned at the same time, citing personal reasons.
At the time of Cassano's resignation, Benetton said the new chief executive would concentrate on developing business overseas, especially in Asia. The attraction of Dominioni, apart from the fact that he is not a family member, is his international experience and his years in the "complex" entertainment industry, where he was among the first to take advantage of the new digital technology.
Benetton has annual revenues of EUR2 billion from its 5,000-plus stores in 120 countries, but in recent years has fallen behind H&M and Zara, amid suggestions it has lost its edge. In particular, it has attracted criticism for its business model, which is built around a group of risk-taking entrepreneurs to which Benetton sells its clothes wholesale. This approach fuelled rapid expansion and has enabled the company to avoid the large investments required to own and manage its own stores. The disadvantage is that it cannot update its clothing lines and store displays as regularly as its rivals: Zara changes gear almost monthly and Gap every few weeks.
Benetton has only two collections a year and its clothes have become regarded as conservative - unthinkable a decade ago.
CV AT A GLANCE...
Degree in business and economics, Bocconi University, Milan
1980 assistant controller, Philips Italia
1982 assistant controller, PolyGram (Italy)
1984 controller, Time Warner
1997 president, South Europe, Warner Music International
2000 president, Europe, Warner
2004 COO and vice-chairman, Warner
2007 CEO, Benetton
In comparison... Pablo Isla Alvarez de Tejera, ceo, inditex
Next month will see Pablo Isla Alvarez de Tejera's second anniversary as CEO and first deputy chairman of Inditex, owner of the Zara fashion chain -one of Benetton's biggest rivals. He will probably look back on his first two years with some satisfaction. In March this year, Inditex posted a 25% jump in profits after a year of intensive global expansion and banked net profits of EUR1 billion.
Inditex has said it will step up its fight against global warming and it plans to unveil an environmental strategic plan in July. In March, Alvarez de Tejera said he wanted to save energy across all the manufacturing plants and stores network; wind power and solar panels already supply most of the energy at the company's HQ.
The total number of stores of Inditex's eight brands (of which Zara is by far the largest) is well over 3,000 (the same number as Gap), while the group's entry into Serbia, Tunisia and China last year means that it now operates in 64 countries worldwide. The group aims to have more than 4,000 stores by 2009.
This expansion has been built largely on Zara's ability to move fast. With a tightly controlled factory and distribution network, the company claims it can take a design from drawing-board to store in just two weeks. Alvarez de Tejera has said that he foresees no difficulty in "scaling up the model" across continents and cultures.
CV AT A GLANCE...
1992: Director, legal services, Banco Popular
1996: Director, state assets, ministry of economy and finances, Spain
1998: General counsel, Banco Popular
2000: Chairman and vice-president, Altadis
2005: Deputy chairman and CEO, Inditex