L.A. Targeted : Benetton Plans Rapid Expansion of Stores

Time was that Benetton stores were popping up seemingly on every street corner in America. People took to calling the Italian chain the McDonald’s of the apparel business.

In fact, the company in the past has been sharply criticized by some of its licensees for opening stores so close together that it was bad for business.

As it approaches the quarter-century mark, Benetton Group--which sells colorful, casual knits and cotton clothing in more than 4,500 stores worldwide--says it is starting to temper that breakneck rate of store growth. But when it comes to California, founder Luciano Benetton says, it’s full speed ahead.

“Los Angeles in particular and California as a whole are areas with huge potential,” Benetton said during a visit Wednesday to the company’s store in Seventh Market Place, at 7th and Figueroa in downtown Los Angeles.

California now has 55 stores, including about 30 in Southern California. That number is expected to rise over the next five years to more than 100, said Iraklis Karabassis, a Benetton representative overseeing the company’s growth in California.

The stores will carry a range of Benetton banners, including Sisley, the company’s upscale line; 012, for children; Uomo, for men, and United Colors of Benetton, the fledgling concept of full-line super stores. Only one United Colors store exists now--in Boston--but others are planned for San Francisco in August and Los Angeles by year-end, the executives said.

Complained About Sales

For the last eight months, Karabassis, whose office is in Washington, and a Los Angeles-based Benetton representative, Andrea Rossetto, have been scouting locations. “Each opening has to make sense,” Karabassis noted.

Benetton’s initial strategy was to cluster shops in an effort to increase demand. Some shop owners, who pay no fees or royalties to Benetton but must cover start-up fees of $200,000, complained that nearby stores simply eroded their sales.

The decision to tone down the clustering indicates that Benetton has “probably learned a lesson,” said Walter F. Loeb, a retail analyst with Morgan Stanley & Co. in New York.

And new emphasis on California makes sense, Loeb added, because generally customers here spend more freely than in other parts of the country.

Now that aggressive expansion has made Benetton a household name, a top priority will be making sure that store owners understand the Benetton products and how to market them, Luciano Benetton said in Italian, with a spokeswoman interpreting his remarks. “Style is essential,” he added.

With horn-rimmed glasses and curly, gray-brown hair nearly to his shoulders, Luciano Benetton at 52 looks more like a professor than an Italian fashion whiz. But whiz he is, with a global network of stores bringing in annual sales of about $1 billion, making Benetton the world’s largest manufacturer of knitwear.

Made First Deliveries by Bicycle

The company’s brightly colored apparel had its genesis in sweaters made by hand by Benetton’s sister, Giuliana.

Luciano’s instincts told him that the sweaters could sell, and he made the first deliveries himself by bicycle in the family’s home town of Treviso, Italy, outside Venice. Demand for the merchandise grew quickly, and soon two other brothers joined in the business.

These days, Luciano Benetton spends much of his time jetting around in a private Cessna Citation III jet to look at the company’s stores, which have sprouted up in such unlikely places as Budapest, Prague and Belgrade. This U.S. trip also is including stops in Boston, San Francisco and Las Vegas, N.M. There, Benetton will meet another global gadfly, Armand Hammer, chairman of Occidental Petroleum Corp.

Having recently received an invitation to discuss opening stores in the Soviet Union, Benetton probably will have a few questions for Sovietologist Hammer about doing business in Russia.