Abstract
Benetton, known for its colorful clothes, is truly a global company that had grown within 40 years (founded officially in 1965) from a small family business into a € 5 billion1 business. The Benetton core business generated about € 2 billion in 2006. The United Colors of Benetton was the original clothing business with its franchising system. The product range, however has grown immensely. However, the sales development of the core business had been flat during the last decade.
Inditex, less known under it’s company name, is one of the most dynamic European firms in the fashion industry in the last ten years: it’s main brands ZARA und Massimo Dutti have gained market share in Benetton’s traditional core segments. The Inditex group had sales of about € 8 billion in 2006 making it the most important European fash- ion group. Inditex, founded in 1963 by Manuel Ortega in La Coruna, Spain, opened its first Zara shop only in 1975. However, between 1996 and 2002, Inditex could quadruple its sales through an aggressive policy of company owned store openings. Listed in 2001 at the Madrid stock exchange, the development of Inditex has been highly appreciated by the stock markets.
Hennes & Mauritz, better known as H&M, was IKEA for fashion. The motto of this Swedish company with almost € 8 billion in sales in 2006 was: Fashion at the best price.
What will be Benetton’s role in this industry and who will win the fashion battle in Europe where strong groups such as H&M, Inditex, the Gap, C&A or Mango fight for market share and where former industry stars such as Marks & Spencer have been slowly fading away?