← Good Bad Billionaire
Good Bad Billionaire
Luciano Benetton: Famous fashion to cultural controversy
00:41:25
How fashion and controversy fuelled the rise of Luciano Benetton
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- [00:00]
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- [00:36]
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Who drives the world forward? The one with the answers or the one asking the right questions? At Aramco, we start every day by asking how? How can innovation help deliver reliable energy to the world? How can technology help develop new materials to reshape cities? How can collaboration help us overcome the biggest challenges? To get to the answer, we first need to ask the question. Search Aramco Powered by How Aramco is an energy and chemicals company with oil and gas production as its primary business.
- [01:17]
Sing Sing
It's 1993 and we're in a brightly lit photography studio. Everything is white. White walls, white backdrop. In front stands a 57 year old man with a mane of frizzy white hair. He's wearing round glasses and a grin and he stares straight ahead at the camera. But that's all he's wearing. The man is completely naked behind the camera. Opposite, a photographer encourages him, teasing and joking as only an old friend could. Snap, snap, snap. They've got it. This new campaign image might shock some, but they're used to that. Our model shrugs his suit back on. It's time to get back to the boardroom.
- [01:54]
Simon Jack
Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and find out how they made their money.
- [02:00]
Sing Sing
We take them from zero to their first million, then from a million onto a billion.
- [02:05]
Simon Jack
I'm Simon Jack, I'm the BBC's business editor.
- [02:07]
Sing Sing
And I'm Sing Sing and I'm a journalist, author and podcaster. And that naked man is none other than Luciano Benetton, founder of the high street fashion brand that bears his name. And for the past 60 years it's been celebrated for its brightly colored knitwear.
- [02:21]
Simon Jack
This is a belting episode, I've got to say, which takes in Benito Mussolini, post war Italy, Formula one, a bit of Dolce Vita, some Vespers, Princess Diana. Princess Diana is an influencer now. I'm very aware of this brand. It was impossible to miss during the 80s and 90s. It was in your face wherever you looked. On billboards. I'm not sure I ever bought anything there, but I was very aware of it.
- [02:44]
Sing Sing
I think I had one or two Benetton jumpers. But I do remember those big shops. And with those, as we'll discuss later, those incredibly provocative, colorful ad campaigns. And you should look them up if you haven't seen them before. They addressed race, religion, aids, war, the death penalty. I mean, at the time, this really shocked tons of people, and some of the ads were even banned. But over the last two decades, the Benetton brand has declined to the point of bankruptcy.
- [03:12]
Simon Jack
So is Luciano a good or bad billionaire or just a regular billionaire? Let's travel back in time to find out.
- [03:22]
Sing Sing
Luciano Benetton was born in 1935 in the small Italian town of Treviso, near Venice. Now, this is Italy under the rule of the Fascist dictator Mussolini. And when Luciano was just a baby, his father Leone left Luciano and his mother to find his fortune as a trucker in Abyssinia, which is now known as Ethiopia, which had been recently invaded by Mussolini. Now, we also have to credit the author Jonathan Mantle for his book Benetton, which has been a really valuable source in finding out the history of this fascinating billionaire.
- [03:52]
Simon Jack
But Leone was not a fortunate man. He caught malaria and his truck was stolen. So he returned to Treviso and started a small bicycle hire business. And soon Luciano got a younger sister, Giuliana, and two brothers, Gilberto and Carlo.
- [04:06]
Sing Sing
Luciano was only four years old when the Second World War began. And amidst the increasing threat of violence, Luciano continued to cycle to school in Treviso. But then in 1944, Treviso was heavily bombed by the Allies. They mistook it for another town where they thought Mussolini was hiding out. Over a thousand inhabitants were killed, but by some miracle, the entire Benetton family survived.
- [04:28]
Simon Jack
I'm still getting over the fact we've got a story with Mussolini playing a large part in it, because in April 1945, Mussolini was executed by the Italian Resistance. His body, famously, along with the bodies of his mistress and his retinue, were strung upside down for public display in Milan. Now, a photojournalist called Fedeli Toscani took a now infamous photograph of that gruesome scene. Toscani had a young son at home, Oliveiro, who will go on to become an even more infamous photographer once he teams up with Luciano Benetton. We'll get to that story later.
- [05:02]
Sing Sing
Just a few months before the end of World War II, Luciano's father, who never fully recovered from the effects of malaria, dies. His mother Also develops a serious heart condition that requires long periods of rest. Luciano later described this time as a tragic period. You could say it was cruel, but you lived through it because you hoped things would change. The lesson I learned is that it was possible to fend for yourself at 10 years old, I was no longer a child. So learning independence from really quite an early age.
- [05:30]
Simon Jack
Yeah. To support his family, the young Luciano works part time selling papers and delivering bread and soap. We've had quite a lot of our billionaires deliver papers at one time in their life. It's like entry level job for a billionaire.
- [05:41]
Sing Sing
Yeah. Now that you know newspapers and print are slowly dying out, you wonder what the billionaires of tomorrow are doing.
- [05:46]
Simon Jack
What are they doing right now anyway? His sister Juliana begins knitting the family's clothes and takes on extra work sewing in a garment factory. Now, Italy was not the kind of dolce vita place that we might think, hark back to now. It was a pretty drab place. Post war clothes were grey, navy, black, burgundy. But at home, Juliana starts to get creative. She's sewing brightly colored knitted sweaters for her family. And a bold yellow sweater she makes for Luciano was particularly admired.
- [06:13]
Sing Sing
You can just imagine how much that yellow jumper would have popped.
- [06:16]
Simon Jack
It's like sort of like before the black. The black and white TV suddenly. Yes, exactly.
- [06:21]
Sing Sing
Because poverty was really rife in post war Italy, so the houses were emptied of possessions. You know, staple foods like pasta became a luxury, if you can imagine that. At only 14, Luciano quit school to get a full time job. He became a sales assistant in a clothing store run by the Della Siega brothers.
- [06:39]
Simon Jack
Now, this isn't the kind of clothing store we might recognize today. Very old fashioned. The clothes are hidden away. There's only a few examples in the shop window. And customers instead describe what they wanted to the sales assistant, who then went off to try and put together an outfit. This is time consuming. Often resulted in customers being presented with clothes they didn't actually want or like. And browsing without something specific in mind was pretty much impossible.
- [07:03]
Sing Sing
I cannot imagine this ever being a shopping experience that existed.
- [07:07]
Simon Jack
I can sort of, what look are you going for, madam?
- [07:11]
Sing Sing
It puts so much power in the hands of the shop assistant. You can see how people became tyrants.
- [07:16]
Simon Jack
Well, I think shop assistants were quite tyrannical in those days. Even I remember sitcoms from my childhood where the sales assistants were very judgmental about the customers who had come in and tell them what they should wear.
- [07:26]
Sing Sing
I mean, in one way you can kind of understand how the high street became seen as this democrat of fashion where anybody could buy whatever they wanted.
- [07:33]
Simon Jack
Yeah. But as the 1950s roll on, things began to change.
- [07:37]
Sing Sing
Exactly. Luciano began to notice a new kind of customer coming into the shop. So they were younger, they had a bit more leisure time, they had at least some disposable income because the economy.
- [07:47]
Simon Jack
Of Italy was recovering. In 1954, Fortune magazine reported that Italy's industrial production had risen 50% above its pre war base. So the exports from Italy were changing. Things like olive oil, cheese, wine, all of those decline. But fashions and fabrics were rising rapidly. Made in Italy had become a stamp of excellence. To this day, if you're a bloke and you see a shirt which is made in Italy or a tie made in Italy, you think, oh, okay, yeah.
- [08:15]
Sing Sing
We're talking business now.
- [08:16]
Simon Jack
Yes.
- [08:16]
Sing Sing
Well, as a young man, Luciano was interested in clothes. He dressed himself in a sharp suit he bought with his new wages. He even made his own bow tie, which was red, green, yellow, blue stripes on white that he made by borrowing needle and thread from Giuliana. Now, when he wore the tie to work, the de La Siaga brothers. Totally Luciano. It's original as Tesco. Ouch. But you're a salesman, not a clown. I never want to see it in the shop again. I mean, it sounds like he was doing the absolute most with that needle and thread.
- [08:45]
Simon Jack
Well, it also just shows that he's got a provocative streak in him, which will be evident throughout this story. He imagined a new kind of clothes store, one for people like him, where they could browse new fashions, spend their own money, and come back time and time again. He would later say the traditional shops were destined to die, and we killed them.
- [09:04]
Sing Sing
So in 1955, Luciano and Giuliana, aged just 20 and 18, decide to go into business. He was a natural salesman. She had the creative spark. But alas, they had no money. And the knitting machine they needed was not cheap. So it was 300,000 lira, which was around 200 at the time. But to put that into context, that was almost a year's annual wage in Italy.
- [09:26]
Simon Jack
Yeah. So big money. To raise that money, Luciano sells his beloved accordion, while his little brother Gilberto sells his bicycle. They borrow the rest from relative and friends. And when the sewing machine arrived at their home, they actually threw a party for it, as if it was a new member of the family.
- [09:41]
Sing Sing
I love that. Luciano collected wool from suppliers on his bike. Juliana knitted till midnight. Her mother ironed the sweaters. So this was a real family affair. And within A month, Juliana produced her first collection. 20 knitted sweaters. The style was typical, but the colors were not so. The sweaters were in green, yellows, pale blues. These colors were not seen in drab post war life in Italy. And they called the collection Trejo Lee.
- [10:06]
Simon Jack
Very pretty. Luciano sold the first sweater to a neighboring grocer, Mr. Zucchello. He described the feeling he had in this moment as the same intense feeling as a scientist whose theory has just been proved correct. Eureka.
- [10:20]
Sing Sing
Yep, he had that moment when he realized these things could sell. And his employers, the de la Siaga brothers, were impressed. They placed an order for 600 of these sweaters. So the Benettons were able to buy several sewing machines and employ a handful of young women from the neighborhood to sew them.
- [10:35]
Simon Jack
And over the next few years, this business grew steadily. They sold their designs to more and more Italian retailers. Luciano no longer needed his day job. He was able to hand in his notice with the Della Ciega brothers. But before he left, their store, changed his life in one more way.
- [10:50]
Sing Sing
Yes, it was on the shop floor that he met his future wife, Teresa, who was attracted to this tall, dashing sales clerk. After they married, she joined the family business and she went to work with Juliana Benetton.
- [11:01]
Simon Jack
Okay, BY now it's 1960 and Luciano is visiting Rome as it hosts the Olympic Games. Now Luciano is blown away by what they called il Boum, this post war Italian economic miracle. And if you think about the movies and the scenes from this time, I'm thinking Dolce Vita. I'm picturing Sophia Loren in a sort of headscarf and glasses.
- [11:24]
Sing Sing
Everyone going on, on Vespers.
- [11:25]
Simon Jack
Vespers. Or in a little Alfa Romeo. And the appetite for consumption meant, as the 1960s progressed, Tres Jolie, the brand they had grew from a collection of just 20 jumpers made at home and delivered by bicycle into a professional business with rented factory space. Manufact managing tens of thousands of jumpers every year.
- [11:45]
Sing Sing
And Luciano kept selling. But with sales reaching 100,000 sweaters a year, they quickly ran into a problem. They were at capacity with the factory space they rented. It just couldn't deal with this number of orders. So Luciano decided to build his own brand new state of the art factory. And to pay for it, he used the profits from their booming sales, plus bank loans that were hard won by his little brother Gilberto, who by this point had become the financial brains of the whole business.
- [12:10]
Simon Jack
And they built themselves a spanking new modern factory, air conditioned. And crucially, this factory gave them the novel ability at that time to dye an entire sweater in a vat. And that drastically sped up how quickly they could get their products into the shops.
- [12:25]
Sing Sing
Most clothing manufacturers can only really guess what colors will sell well. So if say a yellow sweater sells out, they can't produce extra supplies quick enough to keep up with this trend. But the new manufacturing technique meant that they could respond to trends within 10 days compared to a month for their rival brands.
- [12:43]
Simon Jack
So this is an earlier incarnation of what we would call fast fashion now. And if you look at the people like H and M and those kind of stores, they pride themselves on being able to respond to market trends in, you know, days rather than weeks now. And that's one of their big competitive advantages. And Luciano called this raising fashion from the artisanal to the industrial level. And it wasn't just Benetton's genius. He was exploiting the environment around him. Benetton was one of many businesses in the region capitalizing on a rich artisan tradition combined with an excess of labor due to shrinking agricultural production. Remember we talked about things like olive oil and other cheap and all that kind of stuff were in decline. So there's plenty of spare workers. And this formula combining fashion with industry and technology, that was, if you like, the sort of secret sauce for Benetton's success.
- [13:29]
Sing Sing
So they now have the production capacity to take a leap from just being the manufacturer of clothes to being the retailer in their own right to being the people who sell those clothes. A year earlier, Luciano had been approached by a man named Piero Macchiorello. Piero worked in his father's small clothing store in a town called Belluno, not far from Treviso. And on a trip to Rome, Piero had admired the treasure release designs in a shop window. And just two days later, he turned up at Luciano store with a bold proposal. He said, I want to open a shop exclusively selling your clothes. I have no money and no experience, but if you trust me, I know we will be successful. That is quite the elevator pitch.
- [14:06]
Simon Jack
What a pitch. I've got no money, no experience, but I'm sure it's going to work anyway. Luciano was excited by this idea. There had never been a one brand, one product shop like this before. It's kind of hard to imagine that now, isn't it? So he makes a deal with Piero that Piero would buy exclusively from the Benettons and keep the profits on a no return basis. So I don't want any of the stuff you can't sell back at again. The Benettons loan Piero some money and along with the bank loan, Piero opens his store. This is basic franchising and is the key to Benetton's success. Now, franchising is where, and it happens all over the world at the moment. Like McDonald's is a franchise thing where basically McDonald's, for example, doesn't own the restaurant or operate the restaurant. An independent person does that. I just supply them all of the stuff they need, ovens, the food, the branding, the menus. But you run it as your own business. So I don't have really the overheads of running the business. And you're bearing some of the risk, but you, you're the. My distribution network. That's kind of franchising how it works.
- [15:07]
Sing Sing
Yeah. And if you're the one setting it up in, you know, as Piero, as you have the brand, you have the goods, you don't need to go around trying to fill your shelves yourself.
- [15:15]
Simon Jack
Yeah, it's an interesting one because although you lose a little bit of control because you're not actually running the store yourself, it's a passport to fast expansion because you're getting lots of other people to open the stores for you.
- [15:27]
Sing Sing
Well, the first store that Piero opened was in a dead end street in a quiet part of his town in Belluno. Luciano called it the worst site I've seen in my entire life. But Piero was optimistic. If it works here, it'll work anywhere. You need that kind of optimism, I think, if you want to start a business.
- [15:43]
Simon Jack
That store opened in 1965, drawing on inspiration from swinging London. They gave the store an English name. They called it My Market. It was painted white, brightly lit, the clothes were display waves of colour. A far cry from the department stores we encountered at the beginning of this story.
- [15:58]
Sing Sing
Yeah, it was enticing people in, and the store was an instant success in this quiet town. Young people just flocked to it. They were excited at being encouraged to browse the clothes without the pressure to buy from those shop assistants we talked about. And franchise stores quickly followed in Cortina, which is a fashionable ski resort town in the university town of Padua. And there were young customers there queuing up around the block to get in. So a very early version of the kind of queues you now see outside stores such as supreme or Stussy in London.
- [16:28]
Simon Jack
Yeah. So Luciano was perhaps understandably feeling pretty confident, so he dropped the name Tres Jolie and replaced it with his name, Benetton. But it would be several years before the family name graced the front of its franchise stores. Luciano didn't want the Benetton brand damaged if my market proved a failure.
- [16:46]
Sing Sing
But he needn't have worried. My market shops are spreading to Italy's major cities. Rome, Florence, Naples and Trieste. These franchises were largely run by people who had visited the original three shops, and they saw that retail could be fun. They wanted in on this kind of revolution. But Luciano decided he would no longer raise funds for these new shops to open. Budding entrepreneurs had to do it themselves.
- [17:10]
Simon Jack
This is the franchising model. It's interesting, isn't it? This idea of retail becoming an experience, a pastime, you know, something to do, a hobby almost. Yeah. With the success of these franchise stores, Benetton stopped supplying independent retailers. So they wouldn't sell bits of their product to get be in one corner of somebody else's shop. Instead, they developed new stores to sell a bigger range of products. Mercaria was a gentler experience, more traditional, with classical music to appeal to the older female customer. There was Tomato that was aimed at teens, while Fantomax lent into hippie culture. These stores would often compete in the same towns. And I guess it's better to compete with yourself than with others. Within a year, there were 300 stores that sold Benetton clothes exclusively.
- [17:52]
Sing Sing
You know what this reminds me of? This reminds me of what? Inditex, which own Zara Kids, Zara Home, you know, all these kind of, kind of diffusion lines in a way that are still kind of offshoots of the main brand.
- [18:02]
Simon Jack
I think Intertex also earned pull and bear. There's this illusion of choice on High street when in fact they own quite a lot of these brands. All this meant that by 1969, the family was wealthy enough to buy the grand 17th century villa Minelli near Treviso. It'd been abandoned for over 150 years, so not surprising. The renovation took over 15 years to finish. But it remains Benetton's headquarters today.
- [18:24]
SAP Concur Sponsor
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- [18:24]
Sing Sing
And Luciano was also busy growing his own family. By the end of the 60s, he and Teresa had four children together. Mauro, Alessandro, Rosella and Rocco. Fortunately, he was making enough money to provide for this big family. And we think that it is around 1970 that Luciano became a millionaire. Now, it's hard to get exact figures as it was a privately run business, but at the start of the 70s, they went from dozens to hundreds of stores. So it was feels pretty safe to say at this point, he is a millionaire.
- [18:54]
Simon Jack
Luciano Benetton is a millionaire.
- [19:13]
Ed Helms
Hey, everyone. Ed Helms Here.
- [19:16]
Simon Jack
And hi, I'm Cal Penn, and we're the hosts of Ears, The Audible and iHeart Audiobook Club.
- [19:23]
Ed Helms
This week on the podcast, I am sitting down with Jenny Garth, host of the iHeart podcast. I choose me to discuss the new Audible adaptation of the timeless Jane Austen classic Pride and Prejudice. This is not a trick question. There's no wrong answer. What role would I play?
- [19:43]
SAP Concur Sponsor
You know what?
- [19:45]
Aramco Sponsor
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- [19:47]
Sing Sing
You got a little Colin Firth.
- [19:49]
Ed Helms
Okay, that's really sweet. I appreciate that. But are you sure I'm not the dad? I'm not Mr. Bennett. Here, listen to Earsay the Audible and iHeart Audiobook Club on the iHeartradio app or wherever you get your podcasts.
- [20:09]
Aramco Sponsor
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- [20:39]
Sing Sing
Mmm, I love ravioli.
- [20:41]
SAP Concur Representative
O tanta fame.
- [20:42]
Sing Sing
Since when do you speak Italian?
- [20:43]
SAP Concur Representative
Since we partnered with SAP Concur, their integrated travel and expense platform and breakthrough solutions with AI G me Time back to dive into our financial future. We expand into Europe in 2027. So I'm getting ready.
- [20:55]
Sing Sing
Well, you can predict the future.
- [20:56]
SAP Concur Representative
I can predict you'll like that message.
- [20:57]
Simon Jack
What message?
- [20:58]
Sing Sing
Oh, hey, we all got bonuses.
- [21:00]
SAP Concur Representative
You can save for college now.
- [21:01]
Sing Sing
I don't have kids.
- [21:03]
Simon Jack
You don't say SAP Concur helps your business move forward faster.
- [21:07]
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- [21:29]
Sing Sing
So let's take it to the 70s. They were all about Benetton's franchise stores expanding throughout Europe. And in each country, they adapted their offering to local tastes. So by the end of that decade, there were 1700 stores across the continent.
- [21:43]
Simon Jack
Astonishing fact. Benetton was now the largest consumer of world wool in the world. They were also diversifying into denim. The world was now wearing jeans, including Luciano himself. So they acquired French denim Fashion company Sisley.
- [21:57]
Sing Sing
It was in one of Luciano's Jean stores that he met an employee called Marina Salomon. She was in her early 20s, about to attend university in London. He was in his 40s at the time and he fell for her instantly and he flew to London to begin an affair.
- [22:14]
Simon Jack
After several months, Luciano came clean to wife Teresa. She ended their marriage, moved out of the family home and in with Marina Luciano. Marina would stay together for almost two decades and have a son, Brando. He would also help her set up her own luxury fashion group.
- [22:30]
Sing Sing
But let's get back to the 80s. Luciano and Marina are in love and he's about to expand his empire beyond Europe, opening the first stores in New York City and Tokyo. Benetton was the hot brand at the time. Celebrities like Sylvester Stallone, Dustin Hoffman, Jackie O all visited the New York stores. And in London, Lady Diana, who was then the fiance of Prince Charles, was photographed stepping out of a Benetton. So this is amazing because, I mean, I feel like Diana at the time was a proto influencer.
- [23:02]
Simon Jack
Oh, for sure. You know, I'm struggling to see Sylvester Stallone in a yellow sweater, I've got to say.
- [23:06]
Sing Sing
I can sort of see it. But Diana, I can see definitely in a Benetton knitted jumper. She was also notorious for those.
- [23:13]
Simon Jack
And as we'll see, she was super progressive on some of the issues that Benetton was also interested in. And so, I mean, she's a perfect fit and a very powerful, probably the most famous woman in the world. World at that time, I would say.
- [23:24]
Sing Sing
Yeah, well, I'm a perfect brand representative for Benetton.
- [23:27]
Simon Jack
And he understood full well Luciano did, that sport could also help grow the brand. He chose the glamorous, globetrotting, technology driven world of Formula One. In 1983, Benetton sponsored the Tyrrell Racing Team. Three years later, he purchased a team outright, Toleman, and rebranded it Benetton Formula. Now, one of its famous drivers was Michael Schumacher, who got his big break with the team. He won two drivers World Championships and was the most famous driver at the time. They also won what they call the Constructors Championship before eventually being bought out by Renault. I remember that period really well. So if you weren't getting to me with high street clothes, you were getting to people like me through sport.
- [24:06]
Sing Sing
Well, Benetton was loved by movie stars, sportsmen, royalty, affordable and wearable. So obviously the public went completely mad for it. I mean, it's quite rare to actually have a high street brand that was this loved by the Rich and the Famous. The closest I can think of top shot is Top Shot with Kate Mosses, that collaboration with Kate Moss. But it's very rare that a high street fashion label in today's day and age is so closely associated with celebrities of that caliber.
- [24:33]
Simon Jack
So by the mid-80s, Benetton had over 3,000 shops worldwide. They were opening one a day, most of which now bore the Benetton name above the door. The Financial Times profiled Luciano at the time, trying to identify the source of his success. The company now uses some of the most advanced data processing and factory automation techniques. In fact, Benetton employed more computer operators than people making clothes. They have more sales information than almost any other company in the world. They would joke, first we sell the clothes, then we make them. Who does this remind you of? Walmart, exactly?
- [25:06]
Sing Sing
One of our other billionaires who founded Walmart. And in some ways it reminds me a lot of all the fast fashion chains now because they respond to what they see on the Internet, what they see trending, and then they make it within days. But as Luciano's wealth and notoriety grew, organized criminals were taking notice. One evening, Luciano and Marina were relaxing at home when five men entered, tied him up at gunpoint, and left with money and jewelry. Just months later, driving through the gates into their villa, two men with crowbars and pickaxes attacked their car. And the police uncovered even more kidnap plots against Luciano's son Alessandro and sister Juliana. So Luciano decided to move to a town, in his words, near lots of other houses, in a home where we can be safe. And they all got armor plated cars and bodyguards. Such a long way away from post war Italy.
- [25:54]
Simon Jack
Yeah, well, I suppose no one gets very rich in Italy without the Mafia raising an eyebrow and saying, hang on a second, look what's going on here?
- [26:01]
Sing Sing
Without the eyes, criminals following.
- [26:03]
Simon Jack
So a big security retinue of people doesn't come cheap. But fortunately, Luciano is about to make the move to take the company public. We've been through this many times on this program. The initial public offering, the ipo, when you sell shares in the company to the public. And this gives you a very good snapshot of what a company is worth at that time. You have to, because everyone's got to price the shares. So 20% of the company went on sale to the public. It raised over $270 million in less than 15 minutes. So at that point in 1980, when Fortune magazine releases its inaugural billionaire list, its inaugural unmind, Luciano makes the list with $1 billion. Age 52 he's a billionaire.
- [26:45]
Sing Sing
The 1980s made Benetton a billionaire and a household name. But it was over the next decade that the brand would become infamous and the name Benetton would become mired in controversy.
- [26:57]
Simon Jack
Enter Olivero Toscani, whose father, you may remember, took that gruesome photo of Mussolini's hanging body. Toscani Jun Oliveiro has become a photographer in his own right and was working with fashion magazines like Vogue. He was also a self described anarchist.
- [27:13]
Sing Sing
Yes, that's an interesting point given what is soon to come. After being introduced at a party in 1982, Oliviero and Luciano immediately hit it off. And Luciano soon made him art director for Benetton. His first campaign was titled all the Colors in the World and featured images of young people of different ethnicities laughing together. So, you know, a real display of inclusivity at a time when people. That was actually quite far from the conversation in fashion.
- [27:39]
Simon Jack
Yeah. Campaign won praise from even the United nations and by 1989 they officially adopted the brand name. I remember this United Colours of Benetton.
- [27:48]
Sing Sing
But remember, Oliviero is a self described anarchist. He's a provocateur. And what began as a campaign about harmony began to show ever more controversial imagery. So the first campaign to cause real backlash featured a black woman breastfeeding a white baby. It received accusations of being racist. It was felt by some to conjure up historical images of slavery and wet nursing. And today Benetton's own website states this photograph led to global controversy. The African American community in the United States protested and obtained its withdrawal from the United States.
- [28:22]
Simon Jack
But they were not deterred. Luciano and Toscani doubled down. In fact, the 1990s saw them release a whole series of ad campaigns that commented on contentious social issues at often, often. Well, almost always had very little to do with clothing.
- [28:36]
Sing Sing
Yeah, if you actually look at some of the ad campaigns from the time, very few of them actually feature any Benetton clothing at all. So there's images of, you know, one I remember is of a blood smeared newborn baby and you could still see its umbilical cord. So quite a gory image.
- [28:50]
Simon Jack
Yeah, I remember the one with the Catholic priest and the nun passionately kissing. That was banned in Italy after the Vatican protested.
- [28:56]
Sing Sing
And there's also a photograph of the AIDS activist David Kirby on his deathbed. So it was originally published in Life magazine you might have seen before it became a global symbol of the AIDS epidemic at the time. And Benetton's use of it in a fashion campaign sparked a ton of debate about exploiting this tragedy for advertising. Kirby's family, on their part, reportedly approved the use of the image.
- [29:19]
Simon Jack
There was also death row inmates photographed in their cells. These images appeared in magazines, on billboards all around the world. Victims rights groups were outraged. The state of Missouri in the US sued for misrepresentation and major retailer Sears dropped their Benetton products.
- [29:35]
Sing Sing
It's really interesting, I think, to understand a bit about fashion and why these campaigns were seen as the thing for Benetton to do at a time when the brand was still rising high. Because I think, you know, controversy and viral imagery, and this was before the word viral had even been coined. Right. Plays a really huge part in fashion's role in selling to consumers.
- [29:55]
Simon Jack
There is the old adage, isn't there? There's no such thing as bad publicity and that anything that raises your profile, you know, controversial or not, achieves something, something. And you could argue they're not individual examples of trying to shock. They've kind of a theme to this which is sort of, you know, just basically difficult issues. But, you know, I don't know, it's a tricky one.
- [30:16]
Sing Sing
Yeah. I think fashion is one of those industries where they're always chasing this quite nebulous idea of cool and sometimes it can go over into the realm of edgy, which then turns into the realm of needlessly provocative. And you could argue that Benetton's imagery kind of straddled all three at a time. But, you know, clearly Luciano really, really believed in Toscani because he told the Telegraph newspaper, I approve them all and I defend them all. Our filters had a fantastic effect on public opinion. We wanted to probe emotions and stir debate and we did. And, you know, that is certainly true.
- [30:49]
Simon Jack
Yeah. And reflecting later, he also told the New York Times, am I a radical? I rather think so. I believe this is the only way one has. In my position to be an example myself, I paved the road trying to make people aware of participating in problems.
- [31:02]
Sing Sing
And Oliviero said of him, luciano is a modern Medici. He goes on instinct. He'll say, let's try it.
- [31:08]
Simon Jack
Although in his book, Jonathan Mantle quotes a high ranking non family member of the business, if Mr. Benetton suspected for a second that the recent campaigns were causing losses, he would have fired Toscani immediately, even though he's a close friend. So bottom line still talks.
- [31:23]
Sing Sing
Yeah. Business is still number one. By the new millennium, however, fashions were changing and Benetton was no longer the Hot Neil brand. So sales were decreasing as competition from other high street Brands was increasing. So you had Gap and Banana Republic in the United States, you had and H and M in Europe. And Luciano had invested in Italy. Benetton played catch up well after rival brands had saved money by moving manufacturing to the East. So in 2002, Benetton lost money for the very first time in a 38 year history.
- [31:54]
Simon Jack
Don't feel too sorry for him though.
- [31:55]
Sing Sing
No. Despite this, Luciano was still listed as being worth almost $5 billion that year. And that made him the 62nd richest person in the world.
- [32:03]
Simon Jack
In 2003, he announced that his family would be taken, taking a step back from the day to day running of the business. But in 2012, Luciano stepped down as chairman as well of the Benetton Group. The same year, the company delisted from the Milan Stock Exchange.
- [32:17]
Sing Sing
I don't know if you've ever had a company on good bad billionaire delisted. Why would they do that?
- [32:22]
Simon Jack
Well, if we keep doing this for some time, I think this will come up more and more because it's happening more and more often.
- [32:26]
Sing Sing
So what is it exactly?
- [32:28]
Simon Jack
So basically, if you're a public company, you're required to have a level of transparency that private companies are not. So for example, you've got to show how much all the top bosses earn. You've got to report your earnings either every three months or every six months. And the analysts pour over all your results. And if you don't get the profits in this particular quarter or this half year, they push your share price down. So you're subject to a lot of expectation and public scrutiny as a public company, none of which you are by private company. And at the moment, we're seeing tons of companies go from being publicly quoted on stock markets to being private.
- [33:04]
Sing Sing
So what happens to all the stocks that the public bought?
- [33:06]
Simon Jack
So basically what will happen is the private company will come along, along and make all the owners of those publicly listed shares an offer. Send me your shares, I'll give you X amount of money. You then cancel the shares, delist the company, and it's no longer listed on the stock exchange.
- [33:22]
Sing Sing
Right. Well, I mean, this all heralded quite the changes at Benetton. And so over the next few years, the brand suffered even more losses. So just like in the movies, Luciano came out of retirement for one more job. At the age of 83, Luciano once again becomes executive chairman, taking charge of commercial operations and communications alongside that controversial photographer Oliviero Toscani.
- [33:45]
Simon Jack
Luciano told newspaper La Repubblica, it's unbearably painful for me, it's our own fault. Our stores were bright with lights. Now they've become sombre and sad. The worst sin was that we stopped making sweaters. It's as though we took the water away from an aque product.
- [33:59]
Sing Sing
But it wasn't just the Bennett and Claudes brand he had to worry about. Over the decades, the family had also been making money through their holding company. Edizioni holdings included transport, infrastructure, catering, real estate and agriculture.
- [34:12]
Simon Jack
That infrastructure transport arm hit a real crisis though, because in 2018, a bridge in Genoa, the Ponte Mirandi, collapsed during a rainstorm, killing 43 people. Now the Benettons controlled Autostrade, the company charged with maintaining public infrastructure. The New York Times reported at the time. Now the Benettons are suffering through their first encounter with national infamy. Three days after the collapse, the anti establishment newspaper Il Fato Quotidiano ran photographs of the Benettons on the front page and the headline read, we pay Bridges collapse and they cash in.
- [34:46]
Sing Sing
Benetton's holding company sold Autostrade after the intense political scrutiny. And the incident also saw the end of perhaps Luciano's longest relationship. After Oliviero Toscani said on national television, who cares about a bridge collapse? The company immediately cut ties of Oliviero and released this public statement. Luciano, Benetton and the entire company renew their sincere closeness to the families of the victims and to all those who have been involved in this terrible tragedy.
- [35:14]
Simon Jack
It was a massive event that I remember that very clearly in the news. Let's bring it up to date, though. Last year, age 89, Luciano Benetton finally stepped down as chairman of Benetton. He blamed losses of over $100 million on a new boss and management. In short, I trusted them and I made a mistake. In January of this year, Benetton Group filed for bankruptcy. Wow. Announcing that over the course of the year it would close 400 branches around the world. So, gosh, bankruptcy. A long way from the heady height of the 80s and 90s.
- [35:45]
Sing Sing
Yeah, a long way from Dian stepping out in one of your sweaters, you know. But don't worry, because Luciano's still doing okay, despite the fact that his company has gone bankrupt. At 90 years old, he's still worth around 3.7 billion. Today, a highway infrastructure company accounts for more than half of his fortunes despite that crisis. Exactly. So despite, you know, the crisis with the bridge, despite the bankruptcy, he is still riding high, relatively high, as a billionaire.
- [36:11]
Simon Jack
What a story. Starting in Mussolini's Italy and ending up right where we are today. A fantastic story of Luciano Benetton. So now we have to judge him. So let's start with wealth. And in this we like to look at the journey they've been on in terms of their wealth. And this is pretty much rags to riches.
- [36:31]
Sing Sing
I mean, it really is. Talk about working from the age of 10 to support your family, flogging your accordion and your bike to buy your first sewing. I mean, this is a guy who's actually really grafted and come from nothing.
- [36:43]
Simon Jack
Yeah. Cycling around on his bikes, delivering newspapers in a bombed out Traviso where his family, you know, narrowly avoided being killed. Compare that to today. He owns nearly a million hectares. That's two and a half million acres of Argentina. And of course, he bought a Formula one racing team.
- [37:02]
Sing Sing
Well, he isn't up there with, you know, the tech billionaires that we've covered, but I think he scores really highly just because, God, I mean, his journey from where he started out, I think he would score for me, an 8 out of 10.
- [37:13]
Simon Jack
I agree. 8 out of 10 for sure.
- [37:15]
Sing Sing
What about controversy?
- [37:16]
Simon Jack
No shortage of that.
- [37:17]
Sing Sing
Yeah. I mean, those campaigns, they really did kick up quite a fuss. And, you know, fashion is so subjective. Someone can like a piece of clothing and someone can absolutely hate it.
- [37:26]
Simon Jack
Yeah.
- [37:27]
Sing Sing
And I think in the same way those campaigns straddled that line. I mean, I personally, I remember seeing those campaigns when I was a kid. The photography itself is actually really beautiful and startling and stunning. The imagery, the themes, no matter what you think of it, the images themselves are just quite amazing.
- [37:45]
Simon Jack
Yeah. So that's the controversy on the marketing side of it, of course.
- [37:48]
Sing Sing
There's the bridge collapse.
- [37:49]
Simon Jack
The bridge collapse. I suppose he's one of the pioneers of fast fashion, which, you know, is, is notoriously environmental. I think one of the most polluting industries in the world. People will always point to that. Although there are worse offenders, you could argue, than Benetton in that regard. I would have to. I'm going to give them a 9 out of 10 or maybe even a 10 for controversy. I mean, they deliberately courted it. I can't give them a low mark.
- [38:14]
Sing Sing
Yeah, that is true. I don't know though, because, yeah, it's, it's a funny one. I feel like maybe my, my opinion on, on how controversial those ad campaigns, well, would have differed five, 10 years ago because now I almost feel like a lot of fashion brands play it too safe. So maybe by courting controversy, you're actually, you know, doing and saying something more interesting than most fashion brands these days.
- [38:37]
Simon Jack
Okay. I'm not Saying controversy is a bad thing here or. I'm not saying controversy. Nine. Oh, that's terrible. I'm just saying that they sort of went out of their way to court it.
- [38:46]
Sing Sing
That's true. They actually did. And maybe now you've swayed me. I'm going to give him an 8 out of 10, I would say.
- [38:51]
Simon Jack
And giving back philanthropy. He's set up a bunch of nonprofit initiatives on art and communication. He does residencies for young artists and a research foundation. He's clearly a man for whom art and image is really important. I mean, I suppose in a way they would consider some of those controversial campaigns a form of philanthropy in their own right.
- [39:11]
Sing Sing
Yeah, I mean, raising awareness of issues like aids. You know that scene that we opened the episode with where he's naked? That was actually for an ad campaign to persuade shoppers to bring their unwanted clothes into Benetton to be redistributed through the Red Cross. So there was a message behind it.
- [39:26]
Simon Jack
Resulted in the redistribution of 500 tons of clothes. Set that against them. Any the tons of clothes he's actually sold, I'm pretty sure it's pretty low. He's so environmentally conscious. He built an environmentally friendly yacht, Treeboo, in the early 2000s. A 50 meter luxury yacht. First ship of its type to be awarded a green Star certificate of environmental efficiency.
- [39:47]
Sing Sing
Sorry, but that is so billionaire. You know, it's like something you'd find in a satire of the rich.
- [39:52]
Simon Jack
Oh, man. Don't worry, don't worry. It's environmentally friendly. I'm going to give him a three for philanthropy. Yeah, well, hang on a second. I'm going to upgrade that because I do think those campaigns and their, you know, what they were trying to achieve in terms of bringing important issues to the fore, you could argue as a form of philanthropy itself. So I'll give him a five.
- [40:11]
Sing Sing
Yeah, yeah, I think I would give him a five out of ten for that. What about final category, Power and legacy?
- [40:19]
Simon Jack
I mean, I think you're probably much more qualified than I am to talk about this. I mean, did Benetton change the way that ad campaigns worked or people thought about clothes, Clothes as lifestyle, clothes as who you are, clothes as identity.
- [40:32]
Sing Sing
I think that when you put it into the context of what fashion was like at the time that Benetton was at its peak, to have someone set up a fashion label who still remembered when you had to go in and describe clothes to a fashion assistant, who would tell you, you, yes or no, you know, to have someone who set up what you could basically almost describe as the first modern high street fashion brand. Like that is quite something.
- [40:54]
Simon Jack
Yeah. And probably revolutionized the sort of post war Italian clothing scene.
- [40:59]
Sing Sing
Exactly. And those campaign images, they really did push the boundaries of what was considered acceptable for a high street brand, let alone, you know, more a more kind of high level fashion brand. Brand, yeah.
- [41:12]
Simon Jack
Power and legacy. Will we remember Benetton in a hundred years time?
- [41:17]
Sing Sing
You know what, even though the company has filed for bankruptcy, I wouldn't put it past him to maybe select a successor who could revitalize it. There's a lot of nostalgia nowadays for those fashion brands from the 80s and 90s. You never know, there could be a third act.
- [41:31]
Simon Jack
You think there's some latent affection for that brand which could be revived in the right hands.
- [41:36]
Sing Sing
Exactly. Well, watch this space.
- [41:37]
Simon Jack
Okay. I'm gonna say probably could have picked up the phone to speak to the head of state of Italy. Probably not the President of the United States. I'm going to give a six for power and legacy.
- [41:46]
Sing Sing
I'm going to give him a 7 out of 10 because I think what Benetton achieved at its height was really quite remarkable.
- [41:52]
Simon Jack
And also it's just a really interesting tale of post war Italy as well. I think, you know, it's sort of going from desperate poverty after the second World War, moving from agriculture into the dolce vita and everyone wearing lovely scarves and looking like Sophia Loren and driving around and Ciao Bella and the Vespers and all this kind of stuff right up to the modern day through the controversy of the AIDS period. It's a breathless story, I would say.
- [42:16]
Sing Sing
Yeah, you can imagine the 12 part HBO drama, can't you?
- [42:20]
Simon Jack
You certainly can. We're gonna have to ask you though, whether he is good, bad or just another billionaire. What do you think? Email goodbadbillionairebc.com or drop us a text or WhatsApp to 001-917-686-1176. If you missed that, just rewind on your podcast and you'll get it again and tell us what you think.
- [42:40]
Sing Sing
We've had some listeners get in touch about our episode on Michael o', Leary, the CEO of Ryanair Dexter wrote. Dear Zing Simon and team, thank you very much for making my trip to the gym this morning so enjoyable as I listened to your podcast on Michael o'. Leary. Hope you smashed out some PBS while in the gym. Dexter, I cannot add much more to the accurate way you scored this. Thank you. He was born into privilege. So not my favorite kind of billionaire. Though a feisty character, I admire his skills, particularly with negotiating, but he appears not to be a pleasant person. Maybe that's a prerequisite of being being a billionaire, but give me Richard Branson any day.
- [43:14]
Simon Jack
Yeah, interesting. Thanks for that, Dexter. Yes, Are billionaires pleasant or not on on the whole? Well, have a listen to all of them. Make your own decision. A listener got in touch on WhatsApp who didn't give their name says the episode on Michael o' Leary was another banger. Thank you. He has to be one of the good ones. Given his legacy and how he has changed lifestyles in Europe. The app for checking in is a game changer. A happy Ryanair customer.
- [43:38]
Sing Sing
I think Michael o' Leary is going to be quite pleased.
- [43:40]
Simon Jack
He'll be chuffed to bits with that.
- [43:41]
Sing Sing
Well, David from Pamplona says hello from Northern Spain. I enjoyed your podcast on Mr. O' Leary and declare myself a fan of the man and the airline. I've flown with Ryanair more than a hundred times and have never had a problem. The product on offer is good value for money. If people read the terms and conditions properly, their expectations might be a bit more realistic.
- [44:00]
Simon Jack
And Steve from Florida who has got in touch before, so thank you for being a friend of the program. Steve, as someone who has never flown with Ryanair and hopes never to have to, I do still have respect for Michael o' Leary and and what he's achieved, it does show that hard work, determination and a clear purpose can pay off for both the billionaire and all the consumers who have benefited, not to mention shareholders. On the basis of your program, I would rate Michael as a good and colorful billionaire. Colorful for sure. Good bad billionaire is a BBC world service podcast produced by hannah hufford with additional production by louise morris. The editor is paul smith and it's a BBC studio studio's production for the BBC world service. The commissioning editor is john manell.
- [44:55]
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