Benetton plans to reorganize its operations in an attempt to make itself more efficient and competitive after unveiling poor results for its clothing business.

A reorganization, which must be approved at a one-off general meeting of shareholders, may means areas such as IT or operations being hived off into separate companies to make them more responsive.

The company has set up an executive committee, led by chairman Luciano Benetton and includes managing director Silvano Cassano and Alessandro Benetton and Gianni Mion.

Last week, Benetton announced group-operating income down slightly at EUR130m compared with EUR135m last year, with revenues down 3.2 per cent. The forecasts for Benetton are for tough conditions to continue for the rest of the year.

It is believed that Benetton has begun to suffer as other clothing specialists like Zara and H&M start to eat further into the European market. Both retailers have recently opened stores in Milan.