Worries about inflation and its impact on apparel prices appear to be working in fast fashion’s favor.
Zara and Pull & Bear parent Inditex saw significant revenue growth of 36 percent to $7.2 billion in the second quarter on $822.6 million in net profit, even as its Russian and Ukrainian operations remains on pause. Chief rival H&M also shrugged off these market closures to reel in $5.3 billion in sales, a 17 percent jump on the prior-year figures on $360 million in profit. And Uniqlo parent Fast Retailing came in at $3.9 billion in sales, a 10 percent increase on operating income of $588.2 million.
Now another global fast-fashion giant’s results illustrate that consumers are still willing to spend on apparel, especially if the price is right.
Mango ended the first six months of the year with sales of 1.21 billion euros ($1.22 billion), a 24.8 percent increase over the 973 million euros ($981 million) generated in the same period of the previous year.
The retailer also surpassed first half sales for 2019, which was the final first half prior to the Covid-19 pandemic. At the time, Mango didn’t release first-half numbers, but sales for the 2019 full year reached 2.37 billion euros ($2.39 billion)—still the company’s record total.
Pending macro developments in the second half of the year, the company expects it will end 2022 with sales surpassing pre-pandemic levels.
Mango’s online sales declined 3.9 percent, partly due to 2021’s strong comps, when major European markets still maintained restrictions on physical retail amid widespread lockdowns.
During the 2022 first half, Mango also highlighted “a return of social normality” as a tailwind to sales, particularly as special occasion wear regained popularity amid a return to social events.
The Spanish fashion retailer, which recently brought its home goods line to the U.S., also ended the first half of the year with gross operating profit up compared to the same period in 2021. Mango did not break out profit totals.
At the end of the first half, the company had a network of 2,508 points of sale worldwide, after a total of 61 net store openings since December 2021.
“The progress of the first half of the year is another sign of the new stage of growth which Mango is in,” said Toni Ruiz, Mango CEO. “Our customers appreciate and value our product and we have accelerated our expansion and made our operations more efficient.”
The first six months were marked by strong performance in key markets such as Spain, France, the U.S., the U.K., Italy and India.
Mango is angling for significant brick-and-mortar expansion in some of these markets, including the U.S., where it is building out its own store fleet for the first time. The company opened a flagship store on Fifth Avenue in New York City in May, and plans to reach a network of 40 U.S. stores by 2024.
Meanwhile, in India, Mango has advanced its development with fashion retailer Myntra to bring outlets to 50 stores, with an estimated 15 to 20 more openings in the second half of the year. The company is also expanding its Canadian operations with its first six freestanding stores in 2022 and 2023, and expects to open a minimum of 20 new stores over the next 10 years. Mango already sells clothing in nearly 50 Hudson’s Bay stores in the country.
International expansion isn’t the only growth area for Mango, which is also accelerating the rollout of its Mango Kids business line. The line has been a strong sales driver, with its sales increasing by 60 percent last year compared to 2019. Mango is forecasting record sales figures for the kids’ division this year, with sales expected to exceed an estimated 200 million euros ($203 million).
To achieve this, the group said in June it plans to open more than 40 new Mango Kids stores worldwide before the year end, bringing the children’s business line to 450 stores in 80 countries.
Mango will also implement Kids Lab, a total refurbishment to the stores’ furniture and layout displaying products to better serve customers. This transformation will also redesign fitting rooms and create more open spaces.
The fast-fashion firm is also banking on a totally new market: teens. The company launched its first Mango Teen store concept, dedicated exclusively to adolescents, in Barcelona last month. The company forecasts to close 2022 with up to 11 Mango Teen stores in Spain.
The Mango Teen collection includes 800 products, including accessories, 85 percent of which are aimed at the female market. Mango Teen will launch a new collection every two weeks.
Beyond its store and merchandising formats, Mango continued to make progress on its sustainable roadmap in the first half of the year. The Science Based Targets initiative (SBTi), an entity driven by the United Nations Global Compact, validated last June that the group’s greenhouse gas (GHG) emissions reduction targets are aligned with the level of ambition defined in the Paris Agreement.
The retailer also took another significant step to link its debt to ESG criteria (environmental, social and corporate governance). Mango’s cost of debt will be reduced if by 2025 it’s able to achieve 100 percent use of sustainable cotton, recycled polyester and cellulosic fibers of controlled origin, as well as a 10 percent reduction in Scope 1 and 2 CO2 emissions.
Mango expects 100 percent of the polyester used to be recycled by 2025, doubling the initial target set for the same year. Similarly, the company also envisages that by 2025, 100 percent of the cellulosic fibers used will be of controlled and traceable origin, which means reaching the commitment five years ahead of schedule. The company also maintains its goal to use 100 percent sustainably sourced cotton by 2025.
By 2021, Mango already achieved 91 percent use of more sustainable cotton and 59 percent use of cellulosic fibers of controlled origin. In addition, 54 percent of the polyester used was recycled, reaching the initial target four years ahead of schedule.
Mango makes its commitment to sustainable fashion visible through the Committed label, which includes all Mango garments sold with a lower environmental impact. Last year, garments with Committed features already accounted for 80 percent of total production, up from 45 percent in 2020. Mango aims for 100 percent of its garments to be part of Committed by 2022.