Entrepreneur Isak Andic usually prefers to stay in the background, away from the media spotlight. But on May 11, he did not hesitate to appear at the opening party for the three-story store that Mango has opened on the emblematic Fifth Avenue in New York, one of the most exclusive shopping areas in the world. And it wasn’t a quick hello. He spent two hours talking to the attendees during a cocktail party and then went to a dinner with a hundred people at a French restaurant in Soho. “Opening on Fifth Avenue is my dream,” assured the owner of the fashion firm to a group of journalists from European media, including EL PAÍS, invited to travel to the United States for the event. “We have the best team in history.”
No wonder the optimism of one of the richest men in Spain, who opened the first Mango store in 1985 in Barcelona. The last six years have seen a great transformation: in 2016, the company went into a loss; in 2021, it obtained the highest profit (67 million euros) since 2014 and the forecasts for this year continue to be positive. The recovery is the result of a strategic plan focused on diversification, entering new segments such as home and improving the quality of the product, which has returned to its origins. The acceleration of the sale on-line and cost containment have also been key. The result of implementing this strategy was evident in 2019, when the company posted record sales and made money again, but was dealt a blow by the pandemic with store closures sending it back into the numbers. reds. In 2021, a reactivation arrived that the firm considers very stable.
Behind the turnaround there is a team —the same one that Andic was referring to this week in New York— led by the CEO, Toni Ruiz, who came to the company as CFO in 2015, after three years he was the CEO and in 2020 was appointed CEO. He is credited with straightening out the crisis situation that arose after the leader of the fashion family clan passed the baton to his son Jonathan to run Mango between 2013 and 2016, years in which the company unsuccessfully tried to lower prices to compete. with leaders of fast fashion like Primark.
Following the losses of 2016, Isak Andic took the helm again, bringing his brother Nahman, also the company’s founder, out of retirement to help him out. The heir is still in the company, as director of Mango Man. But the management of the group now resides in Ruiz, a former executive of Leroy Merlin, an expert in distribution. The presidency (in the hands of Isak Andic) is not executive, a sign of the professionalization of management.
A balance without debt
He knows in depth all the sides of the coin.
Toni Ruiz has turned Mango around. Not only because of the return to profits, but also because of the reduction to zero of the debt: from 617 million in 2016 to a net cash of 7.8 million at the end of last year. With a turnover of 2,234 million in 2021, 21.3% more than in 2020, Mango has multiplied its gross operating profit by five since 2016. Online sales are also the company’s new strength and already exceed 40% of turnover, above rival brands such as Inditex (25%). Worldwide, Mango has 2,447 stores (owned and franchised), up from 2,183 in 2019, the year before the pandemic. It has about 16,000 employees.
Home, clothing for teenagers, cosmetics, sports… are the new segments in which the company has entered, while the Violeta brand has closed, with large sizes and its own stores, and has merged with women. The progress of Mango Kids (the group’s children’s line, which now includes the collection for teenagers) stands out, which grew by 60% last year, to 200 million. But perhaps one of the most interesting novelties is the new Alter Made collection, aimed at customers with greater purchasing power, with prices triple those of the main brand.
International expansion is the next big step. The market outside of Spain accounts for 79% of turnover and the company wants to continue strengthening its global presence. Mango will invest 100 million euros in the United States to make it one of its five most important markets in 2024, with around 40 stores (it now has six) in New York, Florida, Arizona, Georgia, Nevada, Texas and California. It has also been deployed in India, where it has teamed up with a local partner, Myntra. This country has become its great bet for Asia and the company plans to open 10 stores this semester (the opening of a point in the Mumbai Paladium shopping center stands out, where it will occupy a 250-square-meter store). With these openings, it will have 56 stores in the country.
These two will be two of the great new markets, but the company considers that it still has growth potential in Europe, especially in Spain, France, Germany and the United Kingdom. “We think there is a lot of room to gain market share,” Ruiz said this week. International expansion will probably have a very important weight in the new strategic plan that is expected for 2022-2024, but which is pending developments in Russia. This country was very important for Mango: it was among the top five and accounted for 8% of turnover.
Another struggling market is China, a country that still has its borders closed to foreign visitors and restrictions continue due to the pandemic. At the end of 2021, it had only six stores in that market, compared to 12 in 2020 and 26 in 2018.
The uncertainty about the evolution in Russia, the problems in the supply chains and the increase in energy costs, are some of the external challenges that it has to face, according to Ruiz: “We have some very important challenges on the table, but our goal is to grow sustainably and develop expansion”. The year, despite all the geopolitical and economic turbulence, has started well: “We are very happy with the evolution of sales in the first months of the year. We see how the stores are once again a center of reference for our customers. But I think above all that our product is better and makes our offer make a lot of sense”.