Mango bounces back from a decade of tough times

By

Sandra Halliday

Published
Mar 10, 2022

Spanish giant Mango has announced a €67 million profit for 2021, tripling its pre-pandemic €21 million earnings as it closed its year “in the best financial situation of the last decade”.

It also said turnover rose 21.3%, to €2.234 billion, close to its record figure achieved in 2019. And the online sales channel accounted for 42% of total turnover, reflecting growth of 23%, to reach €942 million.

The year’s profit on an EBITDA basis rose to €423 million from €193 million in 2020, the highest figure since 2014 and was well above initial forecasts.

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Meanwhile, pre-tax profit was €82 million, “correcting the evolution of 2020 and doubling the figure of €41 million posted in 2019, before the pandemic”. 

The company also slashed it debt load and its gross profit rose by 0.6 basis points compared to 2019, to reach 58.2%. The improvement in the margin was caused by a higher percentage of full-price sales and a reduction in discounts. But it was hurt by the impact of increased import and transport costs in the final period of the year.

Looking at last year's performance by region, the international activity of the group accounted for 79% of the total, while the Spanish market represented 21%. 

And in terms of business lines, following the integration of Violeta, Woman increased its share to 82%, while Man, Kids, Teen and Home accounted for the remaining 18%. Kids performed “particularly well”, with an almost 60% increase in sales compared to 2019. 

The company said it closed the financial year with 226 net store openings, taking it to a huge 2,447 stores in over 110 markets, and it increased its investment by 64%, to €45 million, with a focus on its digital transformation as well as the store network.

The group is one of Europe’s largest fashion businesses and was hit hard during the first four months of the year by restrictions linked to the pandemic in key markets for the company, such as France, Germany and the UK. But sales gradually improved during the 12 months and by Q4, the company managed to beat its pre-pandemic fourth-quarter sales figure.

It added that the strong growth in online sales happened as the company took its online activity to new markets, such as Thailand, bringing the total number of online markets to 85. 

At the same time, the stores performed well and, despite being closed an average of 48 days during 2021, their sales improved by 21.4% compared to the 2020 financial year. 

CEO Toni Ruiz said that “although Mango has a high penetration of the online channel in its business, this demonstrated the strength and importance of our stores network”. 

Key store openings during the 2021 financial year included the flagship stores in London (Oxford Street), Düsseldorf and Berlin.

During the year, it also “accelerated its expansion in the United States, a strategic market for the company”, with the opening of four new stores in the Menlo Park and American Dream shopping centres, in New Jersey, in the Roosevelt Field shopping centre in New York and in the Dadeland shopping centre in Miami.  

Mango is currently analysing the impact the crisis in Ukraine and Russia will have on its business during 2022. The company has temporarily suspended its operations in Russia, while “guaranteeing its employees maximum coverage”.