Alessandro Benetton's kiss of life for youth

After that ad with the Pope giving an imam a smacker, fashion boss tells Margareta Pagano he is speaking up for young jobless

Stop the press: Benetton's latest ad campaign exposing the tragedy of the world's 100 million young unemployed is not shocking enough. " It's crazy, isn't it," says Alessandro Benetton, with a little shrug of his shoulders. "People are already complaining to me that the campaign isn't provocative enough. In many ways the issue of youth unemployment is even more shocking than the kissing one because of the implications of a wasted generation without work. We wanted to do something different to the kissing campaign, one with a modern twist: Benetton 2.0."

One that doesn't pit him against the Vatican perhaps, as the kissing picture did? "When I was told the Pope objected I was surprised," he says. "We never thought that kiss would be interpreted as a sexual kiss; for us it was about love. I don't regret it but am sorry we upset people. But it was the Arab Spring, people were bombing each other. For us, the images were about bringing people together".

But the Vatican didn't think so, threatening to sue Benetton over the faked picture showing the Pope planting a smacker on the lips of an Egyptian imam. The ad was pulled and Benetton made a small donation to the Church. He doesn't say how much. By contrast the latest campaign – The Unemployee of the Year – looks tame. It features seven attractive and well-dressed youngsters like Valentina, a non-lawyer from Italy, and James, a non-sound engineer from the UK, who are real people without jobs. It's to make the point, says Benetton, that most of today's unemployed are talented youngsters desperate for work and not lazy good-for-nothings.

But the campaign is also smart, giving as well as selling. It centres on a competition inviting the unemployed between 18 and 30 to come up with a "socially useful" idea to be voted on. Instead of just shocking, Benetton is putting its money where its mouth is by giving €500,000 (£400,000) to the winners – the 100 youngsters chosen will each get €5,000 to make their projects work. Yet the world-wide campaign, said to be costing €20m, is being slammed for being boring and exploiting controversial issues for commercial gain.

Benetton, it seems, just can't win. We meet at the Lanesborough Hotel in London, the morning after the official launch of the campaign. The new head of Benetton seems a little tired but is as charming, and as impossibly good-looking, as they say. If he is disappointed by the muted reaction, he's far too cool to let on. Privately, he must be hoping that this new campaign – which was his idea – takes off. It's Benetton's first big initiative since the 48-year-old took charge of the family-owned company, delisting it in the summer.

But if he cares so much about unemployment, I ask, why didn't his company, which has 30,000 staff around the world in 120 countries, take on another 100 new apprentices? Wouldn't that have made more of a statement? "No," he says, "this is more symbolic. We want to cause a debate, encourage other companies to take part too. Unemployment is a huge problem. We have to show the young are not lazy or anarchists or don't want a job. It's an important age –Michelangelo was less than 30 when he sculpted the Pieta and Einstein just 26 when he came up with the theory of relativity."

Do the Einsteins of the future care about such campaigns? Do they buy more jumpers and jeans because of it? "Being socially aware and taking a world view is part of our DNA, part of our brand and always will be. We want our customers to know they are part of a community – we had more than 500 million online responses to the kissing campaign," he says, firmly.

Joining the family firm, set up by his father Luciano and his three siblings in the 1960s, wasn't an easy decision. But it helped that Benetton the younger had established an independent career before, first at Goldman Sachs and then at his own private equity boutique, 21 Investimenti. "After much struggle, I knew it was the responsible thing to do for the business and the family," he says. And, I suspect, to save the family reputation.

By the 1980s Benetton had become one of the brightest brand names on the high street, revolutionizing the way we shopped with its witty and colourful knitwear and shocking with Toscani's infamous ad campaigns. But the brand lost its way, sales slipped, shares slid and high-fashion upstarts such as Zara and H&M stole a march.

Now the challenge for Benetton is to get new customers into stores and old ones away from rivals. Who does he consider his main competitors? "We don't consider we have any", he says. "Yes, we lost our way but we have learnt to adapt – faster fashion, new technologies and new fabrics. "

Last year Benetton hired You Nguyen from Levi Strauss to take charge of the 300-strong design team at the Treviso HQ and revamp the brand. Latest projects include Pin-Up, a new range of jeans aimed at fitting ladies' bottoms rather than the other way round, at a fraction of the price of designer ones. There's also been big investment in state-of-the art knitwear machinery allowing Benetton – which manufactures largely in Europe – to produce catwalk quality jumpers at a tenth of the price.

Being private means Benetton no longer has to give away numbers – sales have been stagnant at €2bn for the last few years. But he says sales are growing fast in countries such as India, Russia, Turkey and Mexico. Italy, where Benetton has 2,500 of its 6,500 stores, has suffered the most. It's also where youth unemployment is soaring – more than a third of Italy's youth are without jobs.

"We are on the edge of a cliff. We can only hope the structural reforms introduced there will help. But if any politician – or economist – tells you they know the truth, they are lying. All the theories of the last 30 years are not functioning any more; no one knows what will happen," he says.

When Benetton is not working, he takes leisure to the extreme. Look at him on his blog kite-surfing around the world. Skiing is another favourite pastime with wife Deborah, an Olympic gold medallist.

He also writes on philosophy and the arts – rather refreshing to the Anglo-Saxon eye where our industrialists keep personal views separate from their business life. Who knows, maybe this latest campaign from this renaissance man will help fund another young entrepreneur as successful as Benetton itself. Whether he can coax us to buy more of his jumpers or jeans is another matter.

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