Fast-fashion retail chain Mango has been making a greater push on the sustainability and digital transformation fronts, and its 2019 financial results show that these initiatives are making a bottom-line difference.
In a Nutshell: The Spanish retailer is accelerating its commitment toward creating more sustainable fashion. In 2019, it joined the Fashion Pact, a global coalition representing 300 companies and brands with the goal of promoting environmental sustainability in the textile and fashion sectors. A few weeks ago, Mango became a member of the Sustainable Apparel Coalition, which encourages responsible textile practices in the supply chain while measures their environmental impact.
The vertical retailer plans to increase the proportion of sustainable fibers in its collections and use 100 percent sustainably sourced cotton by 2025.
On the company website, Mango said all of its denim pieces are made from sustainable cotton and some have been washed using Jeanologia’s technology, which helps Mango save 45 liters of water per pair. “These practices minimize the environmental impact of denim fabric, since the use of chemical substances, water and energy is reduced in its production,” the company said.
Founded in 1984, the Barcelona-based fashion retailer employs 15,000 and maintains 2,188 stores in 110 countries, including franchised locations. Forty-four percent of Mango’s fibers are from natural origin, and the company designs 18,000 apparel styles annually.
Net Sales: Mango ended 2019 with sales of 2.37 billion euros ($2.65 billion), up 6.3 percent from 2.23 billion euros ($2.50 billion) in 2018. At its retail doors, comparable sales growth for the year was up 5.5 percent.
Online sales rose 26.7 percent to 564 million euros ($631.3 million). Going forward in the “coming financial years, Mango expects to obtain growth rates in excess of 20 percent,” the company said. Helping to build out its online platform, Mango operates 10 logistics warehouses around the world, and last November had enlarged and updated its logistics center in Lliçà in Barcelona to anticipation of e-commerce growth.
Mango attracted more than 600 million visits last year, with 80 percent coming from mobile devices. “The company has continued to invest in improving the browser experience and user-friendliness of platforms–desktop, apps and mobile,” Mango said.
By segment, international represented 77 percent of total sales. The Spanish market, its main selling region, represented 23 percent of total sales. By business category, men’s, kids and the Violeta by Mango women’s plus-size collection represented 18 percent of total sales. The balance represents its women’s categories.
Gross profit for 2019 was 41 million euros ($45.9 million).
Earnings: Mango’s earnings before interest, taxes, depreciation, and amortization grew 43.7 percent to 194 million euros ($217.2 million) from 135 million euros ($151.1 million) in 2018.
During the year, the company continued to reduce bank debt. In 2019, the debt was reduced by 131 million euros ($146.6 million) and over the course of a two-year period, Mango cut its net debt to 184 million euros ($209.3 million) from 415 million euros ($464.5 million).
“Our financial situation is better than it has been for many years. Today, we are able to repay all the debt the company generates in a single year. Our goal is to continue reducing it, but without renouncing projects that will increase our profitability,” CEO Toni Ruiz said.
CEO’s Take: “2019 has been an extraordinarily satisfactory year, in which we achieved the highest sales figure in our history and we have obtained the largest increase in profit in a single financial year. These excellent figures are the result of the effort and the great work of all of us who form part of Mango and will allow us to continue to build the company we want to be in the future,” Ruiz said.