The Italian textile group Benetton has decided to close its production plant and the Benetton Tekstil company in the eastern Croatian city of Osijek after 25 years of operation. According to a trade union, more than 260 workers will be made redundant after their notice periods expire.

This information could not be verified directly with the company on Thursday, but the news about the closure of the factory was confirmed by the regional trade union of employees Klas, which operates within the Croatian Trade Union Confederation and represented the workers at Benetton Tekstil.

Financial difficulties and rising costs

The president of the Klas union, Dario Puljic, told the Croatian news agency Hina that the decision to close the plant and stop production was made in December because outstanding orders had to be completed. Currently, only the employees dismantling the machines and members of the HR and legal departments are still at the factory to finalise the procedures related to the notice periods.

He pointed out that more than 260 employees will be out of work as a result of the production shutdown and contract cancellations. He also recalled that Benetton once employed over 300 workers in Osijek.

The union explained that the management has cited financial difficulties and rising costs, especially due to rising wages and inflation, as reasons for the closure of the production plant, which make the operation unsustainable.

Klas Union has no official information on whether Benetton plans to move its production facility from Osijek to another country, but noted that the Italian company has a large production facility in Serbia.

Tense negotiations

Puljic added that the management has not given any information about the future of the premises on Vukovarska Street in Osijek.

All employees have been promised severance payments for each year of service.

“The negotiations were tense, but in the end the management kept all promises,” emphasised Puljic.

Benetton began production in Osijek in 2000 and initially operated in the Osijek free zone. In recent years, the company has been based in Vukovarska Street. In the course of its activity, the company changed its name several times and previously operated under names such as Benetton Croatia, Olimpias Tekstil and Benetton Tekstil.

According to the Financial Agency (FINA), the number of employees based on hours worked in 2023 was 241, a decrease of 29.12% compared to the previous year. Total revenue in 2023 amounted to €39.54 million, the same as the previous year. In 2023, the company reported a net loss of €66,571, a decrease of 90.77% compared to the previous year.