SPAIN: Mango ups expansion target despite profit drop
Mango is planning 250 openings this year
Spanish fashion chain Mango may continue to expand around the world, but it has not been immune to the fall-out in consumer spending brought on by last year's deep global recession.
The chain's international expansion director Isak Halfon conceded in an interview with just-style that profits fell "slightly" last year, after a 3% rise in revenues to EUR1.48bn was unable to offset high operating expenses in some developed markets.
The result is much lower than arch-rival Inditex, which posted a 5% profit jump last year, though it's much better than many other Spanish retailers including Adolfo Dominguez which has been clobbered by the downturn.
To adapt to the crisis, Mango engaged in a significant cost-cutting round in which it managed to slash some store-rental expenses by 20% and sharply lowered administrative and corporate travel costs.
"We didn't need to close stores or fire anybody," Halfon added.
Mango met last year's 60,000 square-metre shop expansion target, Halfon continued, by opening fewer flagship outlets (and reducing investment in the category) and installing more department-store corners, particularly in high-rent markets such as the UK, Germany, Holland, Belgium and the US.
"We realised we could open many corners there so we decided to do this to optimise costs," Halfon explained.
Indeed, privately-owned Mango plans to up the ante on its "shop-in-shop" expansion strategy in coming years.
While it had earmarked 150 openings this year, it will now inaugurate 250 by rolling out 100 new corners, mainly in the US where it recently struck a joint venture with department-store giant JC Penney.
Mango will continue to set its expansion sights on Asia, Europe and Eastern Europe in coming years, Halfon added.
With this week's global openings, Mango boasts 1,457 stores in 100 countries.
The following is a general roundup of US apparel and shoe chains' October 2010 sales results. The list will be updated as new results become available. ...
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