Mango Profits Decline Performance Concerns

After reviewing the new product line performance in 2014, the group revised the medium-term revenue target downward. As part of the ten year development plan, Mango 2013 launched children's clothing and shipped to and Underwear product line And Violeta, a big clothing brand, introduced a series of clothing for teenagers and mature women last year.

Spanish fashion brands Mango Yesterday, the company's annual profit dropped by 11 percentage points last year after large-scale expansion of international men's clothing, middle-aged and elderly women's wear and children's wear shops. Annual revenue exceeded 2 billion 17 million euros, an annual growth of 9.3%, and 82% of its revenue came from overseas markets. In 2014, Mango shop entered 12 new markets. Online sales Covering 76 countries, the proportion of online sales increased to 9.1%.

Mango has been widely known to many consumers for engaging Hollywood actress Scarlet Johansson and French football star Zinedine Zidane.

It is understood that in July last year, Mango adjusted the plan for the next four years, reducing its estimated revenue by 1/3, and said that the company needed more time to expand its new sales chain.

Last year, the group continued to implement the concept of "super store", which was established in fiscal year 2013, and opened 43 large stores throughout the year. In 2015, it plans to further increase 75, plus the renovation of stores, logistics and IT system. The group's investment budget this year is 300 million euros, which is flat with the 2014 fiscal year.

Mango chief executive, Enric Casi Casi, told Reuters that the new brand needs to grow longer than expected. "It will take several years to reach the unit area sales level of the traditional product line". It also acknowledged that the past 2014-17 year revenue expectations were too optimistic. "Now decided to adopt a more conservative standard to set performance targets." So the group lowered its 2017 revenue target to 3 billion 270 million euros, down about 1/3 from its previous target of 4 billion 970 million euros.

Mango has more than 100 stores in the world. Last year, its profits, taxes, depreciation and amortization dropped by 3 percentage points to 223 million euros. Mango online sales account for 9% of total sales and opened 12 new overseas online markets in 2014. In 2015, Mango will expand the Internet market to South Asia, Asia and Africa. Mango said in a statement that it will invest 300 million euros this year in the expansion of logistics and new markets.

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