Rapid expansion bears fruit for Mango
Spanish retailer Mango is winning over shoppers around the world with its combination of high fashion and low prices. At its current growth rate a new Mango store opens every two to three days, and the company is showing no signs of slowing down - as José M Alarcón reports.
With 655 stores in 68 countries, the Mango fashion chain is the second largest exporter in the Spanish textile sector after Inditex, the company behind the phenomenally successful Zara label.
Not content with being the perpetual runner-up, Mango has an ambitious expansion policy of its own. Last month it revealed plans to invest 12 million euros in opening new stores across the European Union and in Asia in 2003, maintaining the growth rate of 100 new stores a year - one every two or three days - that it has achieved since 1998.
The strategy kicked off in February with the launch of Mango's first shop in Rome - one of the few European capitals in which it did not already have a presence.
The chain has come a long way since it was founded in 1984 by two Turkish brothers, Isak and Nahman Andic. Mango's first shop was on the Paseo de Gracia in Barcelona. A year later it had five outlets in the city, and today it has built a multinational reputation for the design, manufacture and marketing of clothes for women aged between 18 and 35. The firm's capital remains totally Spanish however.
Its international presence began to take shape in 1992. By this time Mango already had over 100 stores in Spain, so it looked across the border to Portugal for its first foray into new markets. Two years later it introduced the business management system which is still in place today, based on specialised and co-ordinated teams; and in 1997 the volume of international business overtook domestic sales for the first time.
In 2002 the company reported a turnover of 979.7 million euros for the Mango chain and 757 million euros for the consolidated group Mango/MNH Holding. Its international sales accounted for 72 per cent of turnover (705 million euros) and investments were 36 million euros - 30 million of which were devoted to construction works and refurbishments and the remaining 6 million to logistics and information systems equipment.
Mango's 102,000 square metre headquarters are located in Palau-Solità i Plegamans, near Barcelona. Its facilities are structured into five main areas: design, production control and point of sale distribution, architecture and interior design, image and advertising, administration and logistics. Its employs 5,000 staff, with an average age of around 25 years old, 925 of whom work at the head office.
In 2004 Mango plans to move and expand its headquarters to a 600,000 square metre facility situated in Lliçà d'Amunt, another location in the Barcelona industrial area.
A young, modern, and urban offer
The retailer's formula for success is to offer fashion-forward women's clothes at affordable quality. All aspects of the concept, from design to quality and brand image are controlled by this formula and have been analysed and adapted to each country in which the business operates. This is one of the main reasons behind its commercial success and the international prestige that this company has built up over the past 19 years.
The stores are either directly owned or franchised, situated in big commercial centres or in the heart of cities such as Regent Street and Oxford Street in London, Kärnestrasse in Vienna, Rue Rennes or Rue Rivoli in Paris. But brand image is the same wherever the location, with the look of the stores enforced by a team of architects, engineers and industrial designers.
All points of sale have the same management programme. 80 per cent of the hardware and software is common to all outlets, whilst the remaining 20 per cent is specific to the needs of each country. The stores also have a help desk at their disposal where 12 people are responsible for following up queries from headquarters or from the network of stores.
The Mango logistics system
At the cornerstone of Mango's commercial strategy is a logistics system that it has been progressively developing since its first shop opened. Called the SLM, or Mango Logistics System, it was recently upgraded and is now able to classify and distribute 30,000 garments per hour.
The target of Mango's logistic system is to ensure that stores receive frequent deliveries of each new collection and that each sales outlet always has the stock it requires to meet turnaround speed and sales forecasts. In this way, the group can guarantee a continuous renewal of the volume and range of styles in its merchandise.
Mango on the Internet
For over two years now Mango has also traded via an online store. Internet sales have reached a monthly turnover of 129,500 euros. The web-store has more than 20,000 registered customers and receives nearly 190,000 visits per month.
The main countries using this formula are Germany, the UK and France and the two first represent more than half of Mangoshop's sales. The customer profile is the same as for the physical stores, with each spending around 94.5 euros. Female consumers spend more money on their purchases in Sweden and Finland.
An outstanding detail is that only 11 per cent of the garments bought online are returned, a figure that is well below the Internet average for the textile sector.
According to Elena Carrasco, director of this area of business at Mango, it is due to "the high level of knowledge that the purchaser has of our brand, both the quality standard, pattern and size, as well as the option of being able to return the garment to any of our physical stores."
by José M Alarcón
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