A recognized clothing brand will close 400 branches after declaring bankruptcy

A recognized clothing brand will close 400 branches after declaring bankruptcy

This is the Italian company United Colors of Benetton. The famous store made the decision in the midst of a hard financial crisis.

United Colors of Benetton

The clothing store chain, United Colors of Benettonrecognized worldwide in the fashion industry, announced that will close 400 branches worldwide. The Italian company faces a hard financial crisis that caused it to be declared in bankruptcy.

Due to this sensitive situation, the company decided to adopt different actions to be able to save, even if, a part of the brand. Thus, the closure of premises throughout the planet is part of the plan to Cutting its operations worldwide and achieving stability in the competitive market.

The drastic decision of United Colors of Benetton

The recognized clothing brand faces an unprecedented economic crisis in its history. Because of this, finally declare in bankruptcy and, consequently, began to adopt a series of actions to try to save the brand and resume stability.

The decision to close 400 stores It was a situation that was announced in advance because the company faces financial difficulties several years ago. This measure It will mark the beginning of a global restructuring.

The debts facing United Colors of Benetton reach the hundreds of millions of euros. Different foreign media assured that Benetton faces economic losses of 1.6 billion euros at least in recent years.

H&M.AVIF

The emergence of brands like H&M put in check the position of United Colors of Benetton.

The emergence of brands like H&M put in check the position of United Colors of Benetton.

H&M

In addition, I also know will reduce all operating costs and all contracts and processes with suppliers will be reviewed to optimize resources and recover part of lost competitiveness with The purpose of getting ahead of the situation.

Benetton will close more than 400 storesbut that does not mean that the brand is finished, because the important decision is part of its Restructuring to survive. In this sense, the company’s managers guarantee the company survival.

The reasons behind the closure of United Colors of Benetton stores

Benetton was erected, in recent years, as one of the most important brands for certain regions of the world. Its colorful designs and its advertising campaigns that promote social issues placed it as one of the most prominent in the fashion industry for more than half a century. However, now the brand is going through a bad streak due to different factors, among which are:

  • Direct competition with Zara, H&M, and Uniqlo
  • Lack of adaptation to electronic commerce.
  • Licage in innovation.
  • Slow in production.
  • Accumulated debts.

Pandemia was one of the events that most impacted Benetton’s accounts. The health crisis limited its operations, as well as reduced its sales to a minimum.

Source: Ambito

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