Italy’s Benetton family is readying plans to address mounting losses at its eponymous clothing retailer, including parting ways with CEO Massimo Renon after four years, two people close to the group said on Monday.

The board of the clothing group is expected to meet on Tuesday to discuss a net loss of around 230 million euros ($250 million) for 2023 which includes impairments, a source with knowledge of the matter told Reuters.
That compares with a net loss of 81 million euros in 2022, when revenues totalled 1 billion euros.

Benetton shareholders are then scheduled to meet on June 18, at which time Renon’s CEO mandate will not be renewed, the two sources said.

Renon, who built his career in the eyewear industry working at Luxottica, Safilo and Marcolin, declined to comment.

The Benettons own the clothing group made famous by its colourful jumpers and provocative advertising campaigns through their Edizione holding company.

Edizione is preparing to back a restructuring of the clothing retailer and to inject 260 million euros, one of the sources said, adding that Edizione would exert closer control over the group.

Benetton has struggled to withstand growing competition from fast-fashion giants such as Zara owner Inditex which have developed a nimbler production and distribution model, able to more quickly respond to consumers’ changing tastes.

In an interview with Italian newspaper Corriere della Sera on Saturday, Chairman Luciano Benetton, one of its founders, said the group had been expected to break even in 2023 under a three-year strategic plan, but a worse than expected financial situation had emerged in recent months.

Luciano Benetton told Corriere that current management, led by Renon, had surprised the board by unveiling a “dramatic” shortfall.

Founded in 1965 by Italy’s Benetton family as a clothing manufacturer, Benetton expanded to trade through around 4,000 shops globally, according to its website. After listing the group in Milan in 1986, the Benettons took it private in 2012, the last year in which it made a profit.