BUDGET clothing store Primark has announced plans to open another branch in Madrid next month – the chain's 61st retail outlet in Spain.
Strapped high-street chain Mango now back in profit after a year
13/03/2020
ONCE-STRUGGLING Spanish clothing chain Mango has clawed itself back from the brink – from being €35 million in the red at the end of 2018, the company reported figures at the end of 2019 which showed it was €21m in the black.
Sales went up by 6.3% - which sounds relatively small, but in fact meant an annual total of nearly €2.4 billion – the highest figure the company has ever recorded in its history.
Its gross turnover for 2019 came to €194m, or 43.7% more than the previous year, giving gross profits of €41m.
Chief executive Toni Ruiz says the cut-price fashion chain enjoyed 'good financial health' last year, and is now 'better prepared for competing in the future' with its main rivals, which include Swedish chainstore H&M and several of the Inditex brands, including Zara, Bershka, Stradivarius and Pull&Bear.
This has largely been helped by what Ruiz calls a 'digital transformation', which the firm has been immersed in for several years but which has only just started to bear fruit after a long and very difficult period.
Owned by Isak Andic, the company had been working hard on cutting its debts, ending on a gross €184m at the close of 2019, being €131m less than the previous year.
“Our financial situation is better than it's been for many, many years,” Ruiz says.
“We're now in a position to pay back our entire debts with what the company generates in a year.”
Although Mango plans to continue along the same lines, it does not intend to give up on projects it has open at the moment which are aimed at increasing profits long-term.
In fact, it invested €58m last year alone – a gamble which paid off as it led to increased sales in all lines, especially menswear which broke the €200m barrier in turnover for the first time ever, representing growth of over 20%.
The Spanish market accounts for 23% of Mango's turnover, and Spain, along with France, Germany, Russia and Turkey are its main national markets for sales volumes.
Last year, online sales also increased by 26.7%, reaching €564m, and now at 23.7% slightly exceeds the entire Spanish physical store sales and makes up nearly a quarter of the firm's turnover.
The company hopes to achieve growth of over 20% annually during the next few years.
Mango trades in 110 countries worldwide, has 10 logistics warehouses and its website clocked up over 600 million hits last year alone.
The first two months of 2020 were also positive from a sales point of view, and Toni Ruiz says he is 'very optimistic' about the company's annual results overall.
This said, the management team is only quietly confident at the moment, since it is closely monitoring the development of the Coronavirus pandemic, which could lead to a reduction in in-store sales.
As an example, Mango had to shut its 20 or so stores in China temporarily due to the Covid-19 outbreak, although in practice the gigantic Asian country only represents 1% of the firm's turnover.
As at the end of 2019, the company had 15,000 employees on its books and 2,188 shops worldwide – five more than in 2019.
All this, and the company is not even on the stock market – it does not, as yet, want to float its shares and open ownership of part of its capital to third parties.
But last year saw growth in physical stores – its plans to continue expanding on the African continent led to the first branch opening in the former Portuguese colony of Angola.
The south-west African coastal nation's capital, Luanda, is officially one of the most expensive cities on earth to live in, and the new Mango store is based on its Avenida Morro Bento, one of the metropolitan area's busiest shopping districts, with menswear and womenswear lines included.
The firm, originally from Catalunya, is already present in 13 countries in Africa – which include Cameroon, Egypt, Libya, Namibia, Kenya, South Africa and the island of Réunion, among others - with 51 points of sale, after setting up there for the first time in late 2001.
This year is hoped to see Mango reinforce its presence on the continent, with South Africa being one of the main nations expected to be targeted – a new store will open in one of its three capitals, Pretoria, later in 2020.
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ONCE-STRUGGLING Spanish clothing chain Mango has clawed itself back from the brink – from being €35 million in the red at the end of 2018, the company reported figures at the end of 2019 which showed it was €21m in the black.
Sales went up by 6.3% - which sounds relatively small, but in fact meant an annual total of nearly €2.4 billion – the highest figure the company has ever recorded in its history.
Its gross turnover for 2019 came to €194m, or 43.7% more than the previous year, giving gross profits of €41m.
Chief executive Toni Ruiz says the cut-price fashion chain enjoyed 'good financial health' last year, and is now 'better prepared for competing in the future' with its main rivals, which include Swedish chainstore H&M and several of the Inditex brands, including Zara, Bershka, Stradivarius and Pull&Bear.
This has largely been helped by what Ruiz calls a 'digital transformation', which the firm has been immersed in for several years but which has only just started to bear fruit after a long and very difficult period.
Owned by Isak Andic, the company had been working hard on cutting its debts, ending on a gross €184m at the close of 2019, being €131m less than the previous year.
“Our financial situation is better than it's been for many, many years,” Ruiz says.
“We're now in a position to pay back our entire debts with what the company generates in a year.”
Although Mango plans to continue along the same lines, it does not intend to give up on projects it has open at the moment which are aimed at increasing profits long-term.
In fact, it invested €58m last year alone – a gamble which paid off as it led to increased sales in all lines, especially menswear which broke the €200m barrier in turnover for the first time ever, representing growth of over 20%.
The Spanish market accounts for 23% of Mango's turnover, and Spain, along with France, Germany, Russia and Turkey are its main national markets for sales volumes.
Last year, online sales also increased by 26.7%, reaching €564m, and now at 23.7% slightly exceeds the entire Spanish physical store sales and makes up nearly a quarter of the firm's turnover.
The company hopes to achieve growth of over 20% annually during the next few years.
Mango trades in 110 countries worldwide, has 10 logistics warehouses and its website clocked up over 600 million hits last year alone.
The first two months of 2020 were also positive from a sales point of view, and Toni Ruiz says he is 'very optimistic' about the company's annual results overall.
This said, the management team is only quietly confident at the moment, since it is closely monitoring the development of the Coronavirus pandemic, which could lead to a reduction in in-store sales.
As an example, Mango had to shut its 20 or so stores in China temporarily due to the Covid-19 outbreak, although in practice the gigantic Asian country only represents 1% of the firm's turnover.
As at the end of 2019, the company had 15,000 employees on its books and 2,188 shops worldwide – five more than in 2019.
All this, and the company is not even on the stock market – it does not, as yet, want to float its shares and open ownership of part of its capital to third parties.
But last year saw growth in physical stores – its plans to continue expanding on the African continent led to the first branch opening in the former Portuguese colony of Angola.
The south-west African coastal nation's capital, Luanda, is officially one of the most expensive cities on earth to live in, and the new Mango store is based on its Avenida Morro Bento, one of the metropolitan area's busiest shopping districts, with menswear and womenswear lines included.
The firm, originally from Catalunya, is already present in 13 countries in Africa – which include Cameroon, Egypt, Libya, Namibia, Kenya, South Africa and the island of Réunion, among others - with 51 points of sale, after setting up there for the first time in late 2001.
This year is hoped to see Mango reinforce its presence on the continent, with South Africa being one of the main nations expected to be targeted – a new store will open in one of its three capitals, Pretoria, later in 2020.
Related Topics
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