A dyed-in-the-wool salesman

It is 11am on a rainy morning in London's Oxford Circus. The attention of passers-by is distracted by the appearance, in this urban-consumerist Mecca, of two sheep - their wool dyed in lurid sweet-shop colours - alighting from a taxi. The ovine fashion-plates, apparently unbothered by their change of pigmentation, hang about like dim C-list starlets under a blaze of paparazzi cameras, outside a shop on the corner. Inside, the business press are poised for action. Outside, PR managers talk urgently into mobile phones. On the street, a long pink Cadillac disgorges another hapless ewe, this one in Cartland pink, accessorised by a pink-clad handler. What next?

At the end of this pastel cavalcade comes a climactic taxi - green this time - from which steps an imposing figure: tall, solid-looking, broad of cheek, broad of smile. His long silvery hair is brushed right back from his face in an ash penumbra. Large round granny glasses make him look like a bolted maths professor. The paparazzi flashbulbs go crazy. The professor yanks a cord to release four banners bearing his family's world-famous name, the doors open and Luciano Benetton steps inside the newest, and biggest, megastore in his global kingdom.

Inside, 10 more coloured sheep are penned in an adorably candy-striped, picket-fenced... but that's quite enough of the nursery whimsy. There's always been something slightly icky about Benetton's procedures: their finger-paint colours, the clear-skinned adolescents that grin from posters in their shop windows, their determination to be good, their conceited logo-worship, their bien-pensant dabbling in politics. If there's a more irritating ad campaign than the Coca-Cola/New Seekers' united-nations dream ("I'd Like to Teach the World to Sing in Perfect Harm-o-nee"), it's Benetton's long-standing desire to Teach the World to Wear the Same T- Shirt With The Company Name On it.

You have to admire their success rate, though, even if through gritted teeth. They've managed to grow every year of their 30-year history (1994 was a flat year; the company responded to static profits by dropping its prices internationally by 13 per cent). The wealth of the empire of 7,000 shops in 120 countries is conservatively estimated as 3,000 billion lire (pounds 1.2b). They're probably one of the 10 most famous brands in the world, up there with Coca-Cola and McDonalds, and have diversified in a dozen different directions: real estate, sporting goods, fast-food joints on the Italian autostrada, optics, banking, rollerblading. Most extraordinarily, they're still a family firm, still run by the siblings that started it all and run with apparently every sign of perfect harm-o-nee.

"Coloured sheep are nothing new to me," Signor Benetton confided when we met. "Fifteen years ago, in France, American Express asked me to do a testimonial for them and I accepted, because they're a prestigious company. I flew to Poitiers and they shot a number of images of me with coloured sheep. At the time, I was worried in case the colours might be bad for the sheep, but they said it was totally harmless." Oh, good. And did he enjoy stopping the traffic in the middle of London? "It was only for a second. You couldn't do it for longer. It's an important crossroads and you'd be jailed for that."

We are sitting upstairs in the new megastore. Snr Benetton is looking surprisingly drab in unmatching jacket and trousers, but he is humorously sporting a green tie on which yet more sheep jump over stiles. He has been interviewed a lot today by the business press, but is still perfectly courteous; his replies, however, are drained of energy. As his interpreter, Magda, struggles to inject them with life, he turns to the closed-circuit camera on the wall behind him, to monitor the brisk sales of jumpers and sweatshirts on the floor below. I think of Ben Jonson's Volpone blasphemously regarding his gold-chest with the words, "Open the shrine that I may see my saint". In Luciano's case, it's: "Turn on the box, that I may see my saint."

As with Volpone, the great manufacturer is visited every few moments by supplicants; our talk was interrupted several times by the arrival of an American football star (whose name escaped me), and a brace of designer- ish coves with the bald heads and round spectacles that's the current comme il faut in fashion circles, from Milan to Benetton's HQ in Treviso.

Last week, Gianni Versace and Georgio Armani, the Gog and Magog of Italian haute couture, announced that catwalk culture was over - that nobody was going to be told by designers any more what they would be wearing next season. Was Benetton a retailer rather than a designer, bothered by the vagaries of fashion? "Ah yes, that `Fashion is dead' thing..." said Benetton with a smile. "Well, if a designer comes up with something really exciting then I'll go for it, but otherwise I stick to what I know." So if Galliano or Rocha designed a gorgeous skirt that everyone was wearing, you might be tempted? "I don't accept anything just because it's trendy."

It's true. For all its kids-from-Fame image, the Benetton range is surprisingly safe and conservative, sticking mostly to jumpers, T-shirts, coats and scarves. But then it's understandable that you play it safe when every single design that hits your warehouse is mass-produced on a grand scale. Last year, the company opened its vast new factory, turning out 40 million garments a year, near Treviso where they have always lived.

Did clothing run in the family? "My father was involved in road haulage and car rentals," said Benetton. "I don't know if he had people working for him - I think he was probably the one driving the lorry. But he died very young, at 34, when I was nine, and I have few memories of him." This was in 1944. Did he remember the war? "Of course, I had memories - there was a terrible bombing raid on Travois in 1944 with thousands of casualties - but I was too young to know what was going on. I remember it was difficult to find food, but - if you were living in the countryside like us - you had a greater chance of finding it." It depended on a system of barter. "Maybe if you had some fabric to make suits, they would give you some flour in return to bake bread."

Which is where the entrepreneurial Luciano, now head of the family with three younger siblings, got started. He was a sporty teenager rather than a tearaway ("from 16 I started canoeing in the mornings and playing basketball in the afternoons") with an acquisitive streak: even when he learned to play the accordion and joined a band, "it was fun but it was a business as well".

Though far from obsessed with clothes, he would choose material with discrimination. "The earliest shirts I got people to make for me were from pyjama fabric," he says with a faint shudder, as we silently ponder the ghastly idea of wearing Viyella next to the skin.

The breakthrough came when he was 21. His sister Giuliana, two years his junior, used to knit, "and she made me a sleeveless yellow jumper. Some of my friends loved it and said, `Where'd you get that? How much was it?' And I thought, maybe I could produce these and sell them." He sold his accordion, brought in his brother Carlo (who sold his bike), bought a loom and began to sell the jumpers to local shops. In 1965, the siblings formed the company they jointly run today: Luciano as president, Giuliana in charge of design, Carlo running production and a third brother, Gilberto, as finance director.

Given the disappointing record of other businesslike siblings - the Guccis, the Saatchis, the Gallaghers - what was the secret of getting on with your family in the boardroom? "We've found a formula which still works, and it's quite simple. Each of us is in charge of a specific sector, in which the others have no say. It's hard to have clashes when you deal in completely different matters. If you deal in finance, it's hard to hand out advice about distribution."

And marketing? To most people, the word "Benetton" stopped meaning an acid-green T-shirt some years ago and meant a series of controversial images, masterminded by the visionary Oliviero Toscani. "United Colours of Benetton" became cognate with dying Aids victims, randy clerics, blood- boltered babies, cannibalistic mercenaries and other gory exhibits from the atrocity museum. They have landed Benetton in hot water several times over: irate customers, censorship, accusations of tastelessness. Open a copy of the current GQ magazine and you'll find their newest shock advertisement, a stunning spread of two horses mating. Had it caused trouble? "We haven't had a lot of opposition." said Benetton airily, "The horses have only been rejected in three countries - Ireland, the UK, and parts of Belgium, where the poster company refused to put them up."

You can, surprisingly, feel sympathetic towards Luciano about the way his best intentions are criticised and misunderstood. One of his most reviled advertising posters showed a white baby being suckled by a black woman. Instead of greeting such an image of racial harmony, white liberals said it was a damning nod to black-Mammy wet-nurse stereotypes. Another ad showed three children of different races sticking out their tongues (geddit? skins different colour, tongues the same) and that was banned in the Middle East where the tongue is classified as an "internal organ", not for display. With the copulating horses, it's Catch-22: if the white one is shown on top, it's a sop to white supremacists; if the black one's on top, it's a Negro-stud stereotype. Benetton laughs delightedly. "You see?" he says, "You can say anything about these images."

I recalled the time when I edited the Independent magazine, whose readers sent in ripped-up pages bearing the United Colours of a bloodstained Bosnian soldier's jacket. Would he accept he'd made a few errors of judgement over the years? Not a chance. "I can tell you we worked in Sarajevo, and we were extremely popular with the people there - they thanked us for reminding people about the conflict, because in this way they were not forgotten."

But look, one says with a certain irritation, what's it got to do with you? Is it the place of a clothing company to wring its hands about world events? "Well, of course, we try to keep the two roles separate - the company making a profit and the company doing its bit to start a discussion or raise an awareness."

Signor B operates on a closed-circuit when defending his company. It's all about communication, you see, not advertising. He objects to the banning of the horses, not (of course) because it keeps the company name off the hoardings but because "ideally, I would like all our campaigns to be released everywhere, to enable people to discuss opinions in an objective way. I'd like everyone to see these images before they're banned." Can this shrewd and intelligent businessman really believe that the world needs his company's pictures before they'll start to "debate" racial issues? It seems so. Benetton is a sucker for his own propaganda.

Ironically, he was much less successful at stirring things up when he went into politics as a senator in the early 1990s. "I thought I could do something about all the waste in public spending. If you become a member of the Italian parliament, you soon realise there's no ceiling to the amount of money they can spend - and people would be voted in to squander money in their voters' interests... It was a vicious circle."

Was it frustrating to find he couldn't change things? "I'm very sceptical about whether somebody with a different background can come in and change the system. The system paralyses any efforts." You mean, only people who've studied politics and the law should be politicians? "In Italy, yes."

My time is up. Mr Benetton has lots more people to see (all of us identical to him, I expect), to whom he will give much the same politely aloof replies, in between sly glances at the TV monitor screen to watch his revenues piling up. Before going, I asked him about the new technological process his company had invested in, which can create a garment, complete and perfect, without ever coming into contact with a human hand. It seemed a far cry from Giuliana's jumper. Would he consider devoting a corner of his giant plant to hand-knitting one-off cardigans to remind him of how he started out?

"It's a very romantic notion," said Benetton, possibly the least romantic man in Italy, "But it makes about as much sense as making one-off cars." And then he left, to pose with some zappy T-shirts in the bright, homogenised halls of his new megastore