Economy

Mango to triple mainland stores

(China Daily)
Updated: 2010-10-07 09:36

MILAN, Italy - Mango, the closely held Spanish clothing retailer, will add as many as 220 stores in China in 2011 as it seeks to more than triple the proportion of sales it gets from the country in the next three years.

The company will aim to add one outlet about every day-and-a-half to its existing 100 stores in the country, said Isak Halfon, Mango's expansion director. About 10 percent of sales will come from China by 2013, up from 3 percent now, he said.

"China is growing incredibly fast and has the most potential for store openings," Halfon said, adding that at least 200 Mango outlets will open there next year.

China's economy has expanded more than 90-fold in the past three decades, luring international retailers such as Wal-Mart Stores Inc, Carrefour SA and Inditex SA's Zara. Mango, whose clothing is modeled by actress Scarlett Johansson, opened its first store in the country in 2002 and created a distribution hub in Shanghai in 2006, helping promote expansion.

Halfon said it is now easier to open stores in China than when the retailer first entered the country, helped by the rebranding of its MNG outlets there as Mango in 2005. Stores in Hong Kong and Macao also helped familiarity with the brand, he said.

The Spanish retailer, which opened its first store in Barcelona in 1984, has 15 outlets in Singapore and 12 in India and plans to open more in both countries, Halfon said.

About 60 percent of Mango's 1,600 stores are franchises and it owns the remainder. Franchisees can return goods that aren't sold and Mango puts those items on sale at its stores.

The company purchases about 45 percent of goods from China and can move production to countries including Indonesia, Turkey, Vietnam and Morocco should raw material and labor costs increase, Halfon said. Mango, which sells trench coats for less than 100 euros ($138) and leather coats for 879 euros, says its customers have been willing to pay more for higher quality.

Mango, which started selling clothing on the Internet in 2000, aims to increase revenue from that channel to 7 percent of total sales from about 1 percent by 2013, Halfon said.

The retailer aims to boost sales to 1.8 billion euros by 2013 from 1.48 billion last year, when 78 percent of revenue was from its international stores, according to the company.

Bloomberg News