Online sales in 2020 helped Mango weather the impact of lower turnover at its physical stores due to the pandemic that saw either temporary store closures or limited operating hours for much of last year.
In a Nutshell: The Spanish specialty chain said it grew online income by 36 percent to reach 766 million euros ($908.2 million), representing 42 percent of total company sales versus just 24 percent in 2019. Last year was the 20th anniversary of Mango’s launch of its e-commerce platform.
Mango is targeting an online turnover of 1 billion euros ($118.6 billion) in 2021. Projects such as hyper-personalization of the browsing and shopping experience on all devices and use of new technologies such as AI to improve after-sales service are part of its strategy to hit its goal. It also plans to include franchises in its omnichannel retail outreach.
Mango said it is accelerating its digital strategy by investing 27 million euros in priority projects connected to digital transformation and a customer-centric focus. In 2020, the fashion retailer improved product design using 3D technology, used chatbot and AI robots to improve customer service, RFID to track stocks from manufacturer to the store, and set up a virtual reality platform where franchises can access a showroom with all of the Mango collections.
The Mango loyalty club was launched in six new markets last year: Germany, Belgium, Luxembourg, Portugal, the Netherlands and the United Kingdom. They join Spain and France, where the club has been operating since 2019. It now totals over 5.5 million active users. The retailer plans to double the number of countries where it will be present by the end of 2021.
Even with the issues connected with its store base due to Covid, Mango ended 2020 with 43 more stores than it had in 2019, totaling 2,221 locations across more than 100 countries. The total store network includes 140 megastores and 10 new stores in India in partnership with local partner Myntra.
For 2021, Mango plans a new homeware line, available online in the second quarter. Its online site will also integrate the assortment of third-party brands. By the fall, the company expects its plus-size Violeta line will be integrated with its general women’s collection.
Net Sales: The company ended 2020 with sales of 1.84 billion euros ($2.18 billion). Due to Covid, online sales grew to 42 percent of overall revenue, up from 24 percent in 2019.
The fashion chain divided the year into four parts, representing the stages of the Covid-19 impact and recovery. Store sales rose 8 percent in January and February, but the first wave of the pandemic from March through June saw the online channel account for up to 93 percent of company sales as most stores were either closed or were open for limited hours. During July through October, the recovery period, Mango said the store network began returning to normal and that it was able to recover 2019 sales levels. Covid’s second wave in November and December saw some store closures but the online channel again saw increases in sales for Black Friday and the holiday season.
Earnings: Earnings before interest, taxes, depreciation and amortization were 193 million euros ($228.8 million). After financial expenses and other accounting adjustments, the company ended the year with a loss of 110 million euros ($11.9 million), against a profit of 41 million euros ($48.6) million in 2019.
The company also reduced its net bank debt by 20 percent to 156 million euros ($185 million).
CEO’s Take: “We have experienced an absolutely exceptional and unpredictable year for everybody. Thanks to the major commitment Mango has made to its online channel over the last 20 years, we have succeeded in it representing 42 percent of our total turnover in 2020, which is an extraordinary figure in our sector and a huge competitive advantage for our company,” Toni Ruiz, Mango’s CEO, said.