Spanish clothing group Mango‘s 2015 turnover grew to 2.327 billion euro, mainly thanks to several new megastores and improved online sales. In the end, it managed to beat the growth forecast, which stood at + 13 %.
Emphasis on megastores and online
Last year, Mango mainly invested in its turnover growth: its sales area grew more than 100,000 smq, to 804,500 sqm with an additional 63 megastores. This particular store formula, launched in 2013, now has 164 stores.
Its online sales also grew a lot, up 27 % compared to the year before. With its 234 million euro, online sales now contribute 10.7 % to the Spanish brand’s sales total. Many of the company’s online efforts last year were focused on South America, Asia and Africa, while Mango now has an online presence in 83 countries.
The company has also integrated its online sales into its store sales as well: nearly 600,000 customers picked up their online sales in a physical Mango store. More than 540,000 orders were also placed in a physical Mango store, using an iPad.
Overall, the company invested 1.2 billion euro over the past three years, to create a new distribution strategy, with an emphasis on megastores (including room for experience) and online platforms.
Investments eat away profit
There are short-term disadvantages to the company’s huge new store investment strategy. Alongside currency fluctuations, its 100 million euro profit dropped to a mere 4 million euro. 70 million euro was lost because of exchange rate fluctuations and another 30 million euro evaporated because of devaluations. Nevertheless, the group feels its increased sales will help its profitability recover.
Mango points to its home territory of Spain for those who wish to see the success of its new strategy. 19 % of all Mango sales still come from Spain, where it has 25 megastores and where turnover grew 20.1 % in the past year.
Mango, present in 109 countries, seeks to open 45 new stores in 2016, on top of the 2,730 stores it already had when it ended 2015.
