day, Mango has ditched the glitz in favor of more casual attire like that from Spanish rival Inditex SA, the world’s biggest seller of apparel and owner of the Zara brand. The change has helped Mango outpace Inditex in Spain’s 16.2 billion-euro ($21 billion) clothing market.
“We had gone way too far with our focus on clothes for parties and events,” said Enric Casi, general manager of the Barcelona-based retailer. “Not even our employees wore Mango.”
The casual push wasn’t the only lesson Mango took from Arteixo, Spain-based Inditex as it sought to address a decline in profit of almost 60 percent in the two years through 2011. That year, Isak Andic, the founder, chairman, and owner of almost 100 percent of the company, stepped back into a stronger day-to-day management role to help reformulate strategy.
Since then, Mango says, the chain has cut prices by about 20 percent across the board, bringing them closer to Zara’s. And the company has stepped up expansion outside of crisis-weary Spain and placed more emphasis on the fast-fashion model that has helped Inditex prosper.
“Mango is emulating Zara as much as it can,” said Luis Benguerel, an equity trader at Interbrokers in Barcelona. “It needs to follow a successful business in order to fix its mounting problems and achieve the type of growth Inditex has seen.”
Fourth-Richest
Two years ago, about 70 percent of Mango’s revenue came from party and event clothing and 30 percent from casual wear. Now, it’s the other way round, Casi, 57, said in an interview.
Mango’s changes are bearing fruit just as the growth that made Inditex founder Amancio Ortega the world’s fourth-richest man shows signs of faltering. Inditex’s profit rose 12 percent in the three months through January, the slowest pace in five quarters and below analyst estimates.