Markets
The new organizational structure by Business Unit has improved the efficiency and effectiveness of controlling the major markets, despite the economic slowdown particularly in the fourth quarter, and the negative impact of exchange rate fluctuations.
The Group improved its performance in 2008 by +5.7%, on a currency neutral basis.
In Europe, there was a positive performance from the Italian market (+3.8%), where new experiments are being carried out to test niches in the market, such as store appeal (shop windows, product presentation, communications material). This is the last of the four projects aimed at improving the effectiveness and efficiency of the supply chain (complexity reduction, delivery optimization, greater involvement of agents and improved store appeal).
Markets responded well in the Mediterranean Area (+5.2%), France (+9.3%) and Eastern Europe (+11.8%).
Growth has accelerated in the five priority markets thanks to focused efforts and a tailor-made approach.
InTurkey(+11.2%), presence in prime locations was consolidated while construction started on an innovative flagship store in Istanbul, designed by Lissoni and partners, and due to open in 2009. Local sourcing was also consolidated, representing a competitive edge in the current economic climate.
Apart from inaugurating the new commercial agency in Moscow, local commercial trading operations were started up in Russia, strengthening our presence in this area and ensuring more efficient and rapid services for clients in the Russian market, while also giving a competitive edge in the current situation of regulatory restrictions and devaluation in the rouble. Revenues grew in Russia and the former Soviet Union by a healthy +8.1%.
InIndia the established presence of Benetton as a top international brand was reflected in its robust growth for 2008 (+30.4%). Over 50 new stores were opened during the year, including the first Benetton Man store in New Delhi. The strategic partnership with the Tata Group for the Sisley brand continued to be developed.
A new organizational structure is being put in place in theGreater China area (+21.36%), along with the definition of long-term development strategy.
In 2008 a strategic agreement was made inMexico with Sears and Axo for developing the United Colors of Benetton brand in this country. The Group's development plans for the American continent also entail strengthening its presence in other Latin American countries, which collectively reported 46.3% growth in the year.
Lastly, Benetton's new regional office in Miami, Florida, started operating in the early part of the year; strategically located between North and South America, this office oversees commercial and sourcing activities in the Americas, including retail activities, which were strengthened in 2008 by the direct operation of an additional 47 stores.
The manufacturing and sourcing structure saw the completetion of the new distribution hub in Castrette in 2008, along with new investments in Turkey, which now accounts for around 20% of total output, and a substantial increase in local sourcing activities, particularly in India and Asia, where a new sourcing coordination centre was inaugurated in Bangkok.
The "Opening Soon" exhibition, organized at the start of 2009 as part of the Milan Triennial, provides tangible evidence of our attention to current and future store concepts. On display was the work of the finalists in the international competition Colorsdesigner, hightlighting innovative trends in retail design, together with plans for avant-garde stores by renowned architects and firms, to be built by Benetton in the near future, including a design by Massimiliano Fuksas, currently in construction in Via del Corso, Rome, and the flagship store in Istanbul mentioned earlier.