Mango continues to get a big lift from digital sales, which could reach 1 billion euros ($1.18 billion) this year.
The Spanish fast-fashion retailer revised its forecasts for the year after ending the first half, and now sees profit topping 2019 levels. For the first six months of the year, the Barcelona-based company said revenue jumped 21 percent over 2020 and approached pre-Covid 2019 levels. May and June sales were “constantly above those of two years ago,” Mango said.
Growth is by and large coming from online, which accounts for 46 percent of Mango’s total revenue, closed the first half up 37 percent from a year ago, and was up 85 percent above 2019. Because online growth “remains on an upward trajectory,” Mango projects online sales volume of 1 billion euros ($1.18 billion). The continued increase in online growth comes at a time when much of its European store network—including Germany, France, the U.K., Portugal and Turkey—were closed on average of almost 50 days during the first half. Spanish stores operated with capacity caps and and modified store hours.
“The results obtained so far this year makes us optimistic about the second half of the year, in which we expect a recovery in sales above the 2019 figures. We expect to return to profit this financial year,” said Mango CEO Toni Ruiz. “The strategy implemented by the company in the last few years, together with the major decisions we took within a very difficult context like the one last year, are now bearing fruit. Mango is moving in the right direction and we are ready to face the future with more guarantees.”
For the first half, improved collections, proactive stock management and scaled-back sales promotions bolstered margins. A close eye on expenditures plus as rise in profitability improved profit before tax by more than 20 million euros ($23.6 million) on a two-year basis and by almost 100 million euros ($118.1 million) versus 2020.
In June, Mango kicked off a 35 million euros ($42.43 million) expansion of its Barcelona logistics center, which is expected to help reduce online order fulfillment costs by 25 percent. And earlier this year, the company produced a new collection of denim that uses laser or ozone to provide more sustainable solutions for the washing and finishing of each garment. According to the fashion retailer, the finishing technologies reduce the collection’s water consumption by 30 million liters.