The restructuring of the Benetton Group under the leadership of CEO Claudio Sforza is progressing. After the closure of numerous stores in Italy, the focus is now on the activities of Benetton Manufacturing. The Ponzano Veneto-based company has started winding down its operations in Tunisia and is already in talks with the North African government to create investment incentives for interested parties.
In 2023, as part of its sustainability strategy, the company optimized fabric consumption in Benetton Manufacturing’s Tunisian factories and achieved a saving of 4.2 percent – the equivalent of 326 kilometers of fabric. This measure not only had an economic benefit of 1.2 million euros, but, according to Benetton, also had a significant impact on the sustainability of the products.
However, amid the current crisis, the Benetton Group has now decided to reduce production activities in Tunisia. According to the Italian daily Il Nord Est, the main goal is to secure the future of the Sahline (Monastir) plant. The facility covers 33,000 square meters of production space and is located on a 16-hectare coastal site.
The CEO is currently looking for buyers who are willing to take on the more than a hundred employees at the location. The Benetton Group has signaled that it would sell the plant at an attractive price, provided that incentives are created for the establishment of new activities. The Benetton Group currently produces 60 percent of its production through external contractors and 40 percent of its production in its own factories. As part of the company’s strategy, the CEO plans to increase the proportion of external orders in order to secure employment in Italy and significantly reduce production costs.
Decline in production in Tunisia
The reduction in activities in Tunisia is linked to a progressive decline in production volumes as orders continue to decline. Production is expected to cease completely by the end of the first quarter of 2025. This development is causing great unrest among the employees of Benetton Manufacturing in Tunisia, who recently went on strike. However, the strike was postponed until January 16th.
Since taking office in the summer, the CEO has been working on a comprehensive reorganization plan. The goal is to halve losses by the end of 2024 compared to 2023 – from 230 million euros to around 110 million euros. A further reduction in losses to 50 million euros is expected for 2025, while a balanced result is targeted for 2026. A key part of the plan is the closure of 500 stores, both directly operated and franchised. However, there are currently no plans for mass layoffs.