- Prachi Singh |
Reporting one of its worst results in the country over a decade, Italian fashion retailer Benetton revealed a 5 percent drop in its revenue in India to Rs 699 crores with net loss of Rs 49 crores for the fiscal year ended March 2017, reports Economic Times quoting data filed by the company with the Registrar of Companies (RoC). These number compare with sales of Rs 735 crores and a profit of Rs 2.3 crore posted by the company in the previous year.
Most of the early foreign entrants into the country such as Levi's, Benetton and Marks & Spencer are finding it difficult to compete with the recent entry of new rivals like Zara, H&M and US Polo. Also impact of demonitisation announced by the government last year negatively impacted consumer demand.
"The revenue loss is mainly due to demonetisation, especially at a time when we are in consolidation phase and topline was not being driven by expansion. This does not impact profit to that extent. Fire in a partner's warehouse and a capital-intensive consolidation exercise lead to the company to report a loss. Otherwise we would have been at par with last year," Sandeep Chugh, CEO, Benetton India told Economic Times commenting on the company’s poor performance in the country last year.
During 2016-17, Benetton pulled shutters on around 119 stores and opened 63 new stores at other locations. The company currently operates 718 stores in India.
Meanwhile, on the international front, Luciano Benetton, 82-year old founder of the Benetton Group recently announced his comeback to the label to infuse life into the troubled clothing brand. “It’s an intolerable pain for me. That’s why I am stepping in again, together with my sister Giuliana, who has returned to making sweaters at the age of 80,” Benetton told in an interview to La Repubblica, expressing his desire to revive the brand’s lost glory.