Spain's Mango Clothing Chain Ramps Up Global Expansion

After a slowdown sparked by the Covid-19 pandemic, Mango has in recent months inaugurated several large stores around the globe. Angela Weiss / AFP/File
After a slowdown sparked by the Covid-19 pandemic, Mango has in recent months inaugurated several large stores around the globe. Angela Weiss / AFP/File
TT

Spain's Mango Clothing Chain Ramps Up Global Expansion

After a slowdown sparked by the Covid-19 pandemic, Mango has in recent months inaugurated several large stores around the globe. Angela Weiss / AFP/File
After a slowdown sparked by the Covid-19 pandemic, Mango has in recent months inaugurated several large stores around the globe. Angela Weiss / AFP/File

Spanish fashion retailer Mango, founded 40 years ago in Barcelona, is ramping its global expansion despite economic uncertainties that have shaken some other global mass-market apparel giants.
After a slowdown sparked by the Covid-19 pandemic, the family-owned company has in recent months inaugurated several large stores around the globe, said AFP.
They include a 400-square-meter (1,300-square-foot) space in Los Angeles, a similar-sized one in Manchester, England, and a flagship store in India's tech hub of Bengaluru.
Mango has opened a total of 115 stores over the past year, mainly in the United States where its sales outlets have tripled, the company's global retail director, Cesar de Vicente, said in an interview with AFP.
It has more than 2,700 stores in over 115 countries, compared to nearly 6,000 worldwide for Zara-owner Inditex, Spain's other clothing retail success story.
The expansion has helped boost turnover with Mango expecting to post over three billion euros ($3.3 billion) in sales in 2023 -- a record -- when it announces its yearly results on Monday, De Vicente told AFP as he stood in front of prototypes of new garments at the company's sprawling headquarters in a Barcelona suburb.
It is at this building -- dubbed the "campus" -- that the textile group which employs 500 stylists designs and tests its future collections.
The company sells nearly 160 million items of clothing and accessories a year.
Star ambassadors
Mango traces its origins to 1984 when a young man of Turkish origin, Isak Andic, opened his first shop on the Paseo de Gracia, Barcelona's famous shopping street, with the help of his older brother Nahman which was hugely successful.
Spain had just emerged from a decades-long dictatorship which ended with the death of General Francisco Franco in 1975 and consumers were hungry for more modern clothes.
"He saw that we needed color, style," said De Vicente.
Andic quickly opened dozens of more stores in Spain and then abroad, starting in neighboring Portugal and France, all under the name Mango.
To help boost sales the company has hired big stars such as British model Kate Moss, Spanish actress Penelope Cruz, and French footballer Antoine Griezmann for its marketing campaigns.
Like its main domestic rival Inditex, the world's biggest fashion retailer whose other store brands include Bershka and Pull&Bear, Mango strives to quickly adjust its production to the latest fashion trends while offering affordable prices.
The two groups "have many similarities" because they "developed at the same time" but there are some significant differences, said Marcel Planellas, a strategy professor at Barcelona business school Esade.
Mango has just a single brand and it does not own any factory, outsourcing its production mainly to lower-cost Türkiye and Asia, he added.
500 new stores
The company, which employs some 14,000 people and aims to differentiate itself from low-cost brands such as Shein and Primark by accelerating its move upmarket, will present its new strategic plan on Monday along with its annual results.
It is expected to confirm its international ambitions, with 500 new stores planned by 2026.
These openings will mostly take place in the United States, the UK and France, the group's second-largest market after Spain, said De Vicente.
This dynamism contrasts with the sluggishness seen elsewhere in the sector in Europe where US retailer Gap has closed shops and French retail clothing company Camaieu, which made and sold its own collections of women's fashion, closed down at the end of 2022.
Mango enjoys a "solid situation" unlike some of its competitors, said Planellas, who predicts the company will list on the stock market in the coming years as Inditex did in 2001.



Birkin Bag Maker Hermes End of Year Sales Jump

A Mimosa Matte Mississippiensis Alligator Birkin handbag by Hermes is pictured during an auction preview at Sotheby's in Geneva, Switzerland, November 7, 2024. (Reuters)
A Mimosa Matte Mississippiensis Alligator Birkin handbag by Hermes is pictured during an auction preview at Sotheby's in Geneva, Switzerland, November 7, 2024. (Reuters)
TT

Birkin Bag Maker Hermes End of Year Sales Jump

A Mimosa Matte Mississippiensis Alligator Birkin handbag by Hermes is pictured during an auction preview at Sotheby's in Geneva, Switzerland, November 7, 2024. (Reuters)
A Mimosa Matte Mississippiensis Alligator Birkin handbag by Hermes is pictured during an auction preview at Sotheby's in Geneva, Switzerland, November 7, 2024. (Reuters)

French luxury group Hermes reported an 18% rise in fourth quarter sales on Friday, showing robust appetite from wealthy shoppers for the most expensive luxury items like its Birkin bags, which cost upwards of $10,000.

Hermes continues to outshine rivals like LVMH and Kering-owned Gucci thanks to its wealthier customers as the industry suffers its slowest sales in years. Global luxury sales fell around 2% last year, hurt by a property crisis crimping spending in China and inflation-weary shoppers elsewhere.

"We are celebrating an excellent year, in a tougher environment," Axel Dumas, executive chairman, told journalists on a call.

Sales for the fourth quarter came to 3.96 billion euros ($4.14 billion), an 18% rise at constant exchange rates, accelerating in the important end of year period, with the fastest growth in the Americas and Japan.

The growth beat analyst expectations for a 10% rise, according to a Visible Alpha consensus cited by UBS.

The Hermes leather goods and saddlery division, which accounts for nearly half of group revenue, grew the fastest, up 21.5%. Analysts had expected a rise of 13%.

The double-digit growth at Hermes contrasts with LVMH's 1% rise over the last three months of the year.

Hermes also reported 9% growth in sales in the Asia region excluding Japan, the label's biggest market, despite the downturn in traffic in Greater China seen since the end of the first quarter of 2024.

Dumas added, however, that it was "too early to see an inflection" in the industry, despite some positive signs.

Hermes is known for its tight grip on production, sticking to an annual increase of around 6-7% a year, with order backlogs cushioning it from falling demand while holding up the label's exclusive aura.

Sales in the Americas region clocked 22.3% growth, matching growth in Japan.

Asked about the impact from potential US tariffs on European goods, Dumas said the company would not adjust its production.

"We are attached to keeping our production where it is," he said, citing France for leather goods, Switzerland for watches and Italy for shoes.

"We'll adapt to tariffs, and raise prices accordingly," he added.

The company is raising prices 6-7% this year to reflect higher production costs and exchange rates, Dumas added.