Mango losses lessened
Retail & leisureThe Barcelona-based company’s increased EBITDA meant that its overall loss improved by 45 pct from EUR 61 mln to EUR 33 mln.
“In 2017 we confirmed that our fast fashion and omnichannel based business model is the route that we should follow,” commented Daniel López, the deputy CEO of Mango. “If the H2 sales level is similar to that of H1 of the year, the company would be heading back towards profitability,” he added.
Throughout 2017, Mango attempted to address its balance sheet issues, resulting in a significant reduction in bank liabilities and a reduction in its net financial debt. At the end of the last year, its net financial debt had decreased by 33 pct, from EUR 617 mln to EUR 415 mln.
Around 77 pct of the turnover was attributable to its international operations and 23 pct to its domestic market. In terms of its business lines, the Man, Kids and Violeta brands stand out, being responsible for 18.3 pct of total turnover compared to 17.6 pct turnover from last year. Online sales have accelerated and thus taken on added importance across the group. In 2017 sales from this channel increased by 15.4 pct reaching EUR 339.2 mln, making up 15.5 pct of the total turnover. The company expects that online sales will reach 20 pct of the total turnover in 2019, a level it had originally aimed to achieve in 2020.
Mango operates online stores in 83 countries offering online shopping integrated with brick-and-mortar retail. This year it has plans to enter the Iranian and Ukrainian markets. Apart from the various delivery options, such as picking goods up in stores or home delivery, the company also offers home delivery the very next day in major European cities as well as in all Spanish provinces. In 2017 the Mango website was visited by more 450 mln users, an increase of more 50 mln on the previous year. Furthermore, purchases via mobile devices and tablets for the first time exceeded those made on computers (52 pct, compared to more than 44 pct in 2016). Similarly, 67 pct of visits to websites took place using mobile devices i.e. 4 pp more than a year earlier. The company has 21.5 mln followers on its profiles on social networks.
The company’s investment in 2017 increased to EUR 45 mln, a significant part of which has been allocated to the improvement of its digital systems. The company will continue in this direction this year, allocating another EUR 30 mln to this area. Its total investment in 2018 should increase to EUR 50 mln. Last year Mango continued the development of a new retail model based on megastores with an average area of 1,100 sqm and the closing of smaller stores at the same time. The company ended the year with 211 megastores, twenty of which opened over the last year. New openings and the extensive redevelopment of other stores (in order to adapt them to its new ‘The Line’ format) consumed a significant portion of the investment last year. The most significant openings were flagship stores SoHo in New York, Serrano in Madrid and Restauradores in Lisbon.
At the end of 2017 the group had 2,190 stores in 110 countries, while its sales area increased by 1.8 pct from 798,000 sqm to 812,000 sqm. Since Mango started upgrading its chains in 2012, the area has increased by more than 300,000 sqm and the average store size by 54 pct. At the end of last year, franchise stores accounted for 55 pct of the company’s total. In 2018 it is expected to maintain its growth and open another 45,000 sqm of franchised stores across the world.
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