CEO Mango on the brand’s new strategy for the future after the record-breaking fiscal year 2022

CEO of MangoesToni Ruiz, as he begins to present the company’s financial results on Thursday, March 9. The Spanish company is in a celebratory mood after increasing sales to the highest figure to date (2 .69 billion euros) and recorded a net profit of 81 million euros, more than four times the pre-pandemic figure.

“After many difficult years, Mango has had to work hard on its stores and products, and after having to take a break due to the pandemic, we feel very proud of the transformation it has made. Now we are reaping the well-deserved fruits of many years of hard work,” admitted the head of the Barcelona-based company, noting that “Mango now has a distinctive business model. defined by its key assets: its own high-quality workers and design, far superior to the models of other companies in the industry.”

“We’ve accomplished the most difficult task: transforming the company. We’ve laid the foundation needed for further growth in the future. We want this growth to be accompanied by job creation. directly and indirectly,” continued the CEO. The Spanish brand currently has 14,000 employees.

This shift towards a more modern and financially stable Mango also implies some changes in its strategy. Mango’s first major change was the divestment of all its stores in Russia to local franchisees, which had a negative impact of 20 million euros on the company’s financial accounts. “That was the most likely solution we found to deal with the situation,” admits Ruiz. Before the war, Mango employed 800 workers in Russia, 120 in Ukraine and about 60 workers from both countries at its headquarters.

In response to rising global inflation and in line with its strategy of repositioning its apparel in a more attractive and quality segment, similar to recent measures taken by its competitors zaraMango garments are a bit more expensive now.

“We’ve raised prices, but not in a linear fashion. This is due to increased raw material costs, but mainly because our products keep improving,” the CEO explained. The brand recently launched a premium ‘Selection’ collection and is focused on launching strategic collaborations with renowned designers or influencers such as Camille Charrière and Simon Miller.

However, these changes do not seem to affect Mango’s financial statements, quite the contrary. The company’s chief financial officer, Margarita Salvans, said: “We ended the year really well. We ended the year with a net financial debt of €82 million, one of the healthy ones. best in the field”.

Online sales accounted for 36% of Mango’s record-breaking sales. However, while this 960 million in online sales is higher than the 942 million recorded in the previous year, it still falls short of the 1 billion online sales target that Mango has set for 2021. .

“Conditions have changed, but revenue continues to grow. Online accounts for 42% of our sales, but we still have a market share higher than the Spanish average of 21%,” said César. de Vicente, the company’s chief retail officer, argues. . Mango plans to bring its e-commerce to 20 new markets in the first half of 2023, especially Africa and countries like Brazil, where it has just signed an agreement with a local online retailer. dafiti.

International expansion and significant investment

Contrary to what might be expected due to the explosion of e-commerce during the Covid-19 pandemic, one of Mango’s main priorities is to grow its brick-and-mortar retail network. “In 2022, the world is back to normal, and we want to capitalize on this by investing in our stores,” said the company’s CEO, adding that 2022 will see more. 119 stores opened compared to 2021. Mango currently operates a network of 2,566 points of sale. Sold in over 115 markets on five continents. In 2022, the brand added Cameroon and Morocco to the list of countries where the brand has a physical presence.

“Over the past year, the company has expanded significantly,” said Ruiz, highlighting the company’s major milestone of opening a store on the streets of New York. Fifth Avenuethe refurbishment of its store on Boulevard Haussmann in Paris and the signing of significant agreements with Fox, for the expansion of Canada, and Myntra, for deployment in India. “This year we celebrate the 30th anniversary of Mango’s internationalization, starting with the opening of our first store in Portugal. In 2023, we will accelerate the pace of store openings and refurbishments. Obviously we do. I believe in the importance of physical stores as they are where we come into contact with our customers,” said de Vicente, emphasizing the importance of expanding Mango’s business. in the United States, which will soon reach 100 million euros in sales.

“We are accompanying our growth with significant investments in technology, logistics, facilities and stores,” Salvans said of Mango’s latest projects. The company is based in Barcelona, ​​owned by Isak Andic, invested 107 million euros over the course of the year, double the 45 million euros it invested the previous year. According to Mango, this is the first time since 2014 that investments exceed 60 million euros.

“We have to keep investing. We want to continue to expand and grow significantly. Investment is going to be very important over the next few years,” Ruiz said, explaining that part of the money is being used towards completion. the expansion of the distribution center at Liçà d’Amunt, in Barcelona, ​​with the aim of “co-managing all the warehouse operations of the physical stores and the online stores.” In addition to this latest project, which will be launched within the first six months of the year, Mango Campus will also be built. The new headquarters will require an investment of 42 million euros and will have 2,200 workers.

The CEO concluded: “We have such a spectacular value proposition that we believe in the company’s potential for expansion. We want to make a qualitative leap in many different places.”