ICB » Retail » COVID-19 : Benetton India expects a plunge of upto 45% in revenue this year

COVID-19 : Benetton India expects a plunge of upto 45% in revenue this year

The company in its first phase of reopening has resumed operations in 15 out of the 350 stores in the country. Goa, Bangalore, and North East are the cities, where the brand is standing with open arms to welcome people.

The recent news of Benetton opening some of its stores across the country gave a ray of hope to the retail industry after a long halt, However, it looks like resuming operations does not solve all the problems for the international retailer.

The brands recently announced that it is expecting a revenue slump as low as 45% this year as the pandemic continues to spread its fear. It believes that the company might go back by a year owing to the disruptive health crisis.

“From the point of impact, yes, it is a big one and from our business perspective we feel that we are a year behind now in our brand journey,” Sundeep Chugh, Managing Director, and CEO, Benetton India told PTI.

Elaborating further, he said, “What we are supposed to deliver in this year’s budget (January-December), if everything goes well and there is no COVID-19 phase II, we anticipate that it can only be delivered next year. To sum it up, almost a year behind in our brand journey in India.”

When everyone is predicting that this situation might turn people towards the online modes due to its convenient nature, the company still believes that the fashion of offline retailing is evergreen. Despite the company’s online sales gaining traction by 10-15%, it says that their offline sales will remain dominant. Commenting further on the revenue condition, the MD says he expects a 35-45 percent impact, similar to other fashion retailers in the country.

Furthermore, the company takes pride in standing beside their staff in a time where the news of furloughing and retrenchments is all over the place. Benetton, instead, has been taking this time to upskill its employees and get them acquainted with new technological methods prevalent today.

“Our first priority was protecting and investing in our people. Our brand is all about the team, which is behind the brand…We realize that we are in a very difficult situation…(but) we keep investing in our people. Whatever brand we are today, we are all because of our team,” he said.

He added, “Even if we lost two months of turnover, the team when they are back, with an incremental contribution every day over the next 12-15 months, when they look back this (difficulties) should be a thing of the past…”

The company is also focusing on coming up with new ways of communication and presentation to make customers comfortable with the new normal of today. Chugh believes that this pandemic is definitely going to define the customer’s buying patterns.

Commenting on the revival of the industry, he shared, “But I feel that change in behavior will not be very significant,” he said adding in China which is now settling down, there is a 10-15 percent better throughput in online as compared to offline, similar to what Hong Kong witnessed during SARS.”

“So the better traction or throughput of online will continue for 4-6 months and certain people would also try to adapt to that habit…it would see an initial advantage for the next four to six months. There would be a balance tilting towards online,” he added.


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