This Iconic 90s Retail Chain Is Closing Over 400 Stores Worldwide And The Reason Is Clear

A large number of retailers are financially struggling in 2025 and for some, like Benetton, the reasons are crystal clear. In 1996, during the brand's heyday, WWD reported that Benetton had 7,000 stores around the globe and was bringing in over $2 billion in annual sales. However, as of 2025 Benetton's website listed only 3,000 physical stores in operation in 2025. Fast fashion, and a failure to modernize production and capitalize on online sales all contributed to Benetton's financial predicament. Per NoNameGlobal, in 2022, Benetton reported €80 million ($93 million) in losses, a number that skyrocketed in 2023 to €230 million (almost $268 million) in losses. This pushed the brand's total debt beyond €460 million (over $535 million) and has forced it to make the tough call to cut costs in order to hopefully financially stabilize the company by 2026 or 2027.

These financial troubles largely contributed to co-founder Luciano Benetton and CEO Massimo Rendon fighting each other for control of the company. Rendon would eventually go on to accused Benetton of digging the brand into a €100 million (roughly $116 million) hole that forced Benetton to resign in 2024. Now, Benetton is hoping to dodge a potential bankruptcy by shutting down over 400 brick and mortar locations by the end of 2025 in the hopes of avoiding joining other popular fashion brands that have filed for bankruptcy in 2025.

The brand was founded in 1965 in Trevieso, Italy, and managed to carve out a niche for itself in the world of fashion with the slogan "all the colours of the world" — which backed the company's social agenda to address geopolitical topics like racism, violence, and public health, particularly in the wake of the AIDS crisis. However, by the 2000s, Benetton was already starting to become irrelevant in the face of fast fashion. The brand ultimately struggled to keep up with a changing market place that was increasingly dominated by clothing companies such as Zara, H&M, and Temu. Plus, as internet shopping became easier and more accessible in the new millennium, Benetton stalled behind other brands that could produce chic outfits and modern accessories in a faster production period, and through direct-to-consumer (DTC) online portals.

To that end, much like Torrid, the women's apparel brand that closed 180 stores recently, Benetton also closed 180 stores in 2024. Also, it's not just physical locations that Benetton is scaling back on, but also the factories and workers who produce the company's product lines. The Sarajevo Times noted that the Benetton factory in the City of Niš closed in April 2025, laying off 950 employees in the process. The plant had been open for operations since 2011.

Under the new leadership of CEO Claudio Sforza, the fashion brand is aiming to return to being profitable by the end of 2026. There are plans for subsidiary "spin-offs", with e-commerce avenues at the top of the list. Benetton actually began its restructuring plans in 2024, with a 2025 agenda of closing store locations, reducing overall expenses, and implementing cost-effective sales methods such as adding a significant percentage of products to external suppliers and distributors. So far the strategy appears to be working as Modaes reported that 13% of Benetton's total sales now come from online shoppers, with an end of 2025 projection of a 20% to 25%.  

In order to help bring the clothing brand back to life, Benetton has also secured a bit of help in the form of a 2024  €260 million (almost $303 million) boost, courtesy of the Benetton family holding company, Edizione. According to the Benetton Group, Edizione pulled in €10.1 billion (almost $12 billion) in consolidated revenues in 2024, making the company's net asset value investment portfolio €13.2 billion (over $15 billion) by the end of that same year. With the Edizione cash injection and boost in online sales, Benetton could make a strong comeback in the coming years.