Mango'S Parent Company Suffered A Steep Decline Of 96% Due To Strong US Dollar And Increased Investment.

Mango main retail store concept Megastore

Spain

Mango's parent company Mango MNG Holding SL 2015 profit in the fiscal year was affected by a strong US dollar and a 96% drop in investment.

The group's net profit of only 4 million euros has been declining for two consecutive years, with net profit of 104 million euros in fiscal 2014, 11.2% less than in 2013.

In 2015, the negative impact of investment strategy was 30 million euros, while the negative impact of exchange rate floating was 70 million euros.

Core profit EBTIDA also fell to 170 million euros from 223 million euros in the previous year.

Over the past three years, Mango MNG Holding SL has invested 1 billion 200 million euros in changing business models, spending huge sums of money on expanding the super store network, adding 63 (12 less) super stores last year to the total number of super stores at the end of the year to 163, and all 2730 types of stores in 109 countries and regions.

Last year, the group also opened a new logistics centre in Barcelona, Spain, which invested 360 million euros and could handle 75 thousand goods per hour, three times the original logistics center.

However, in 2015, sales per unit area increased slightly by 1%, but decreased sharply compared with two years ago. In 2015, sales per square meter were 2892 euros, while 2013 was 3658 euros, a decrease of 20%, mainly because the large sales area of tea shops increased the data.

Mango MNG Holding SL executive vice president, Daniel L PEZ, pointed out in the earnings report that the group is committed to promoting growth, even at the expense of short-term interests, and plans to increase profitability in the next few years.

Since the 2014 fiscal year broke through 2 billion euros to 2 billion 17 million euros, the group's revenue increased further from 15.4% to 2 billion 327 million euros in the 2015 fiscal year, faster than the group's expected 13% and 9.3% in the previous year.

Online sales contributed 234 million euros to revenue, up 27% from the same period last year, accounting for 10.7%. Currently, 83 countries and regions in five continents of the world have set up e-commerce business.

The international market accounted for 81% of the revenue, while the remaining 19% came from the Spanish mainland, where the revenue grew by 20.1% and the number of domestic super stores (25) was the main driving force.

The group will further set up 45 super stores in the current fiscal year 2016, and will also sharply reduce the scope of us business by ending 450 stores in J.C.Penney (NYSE:JCP) Penny department store.

When Mango MNG Holding SL and J.C.Penney announced their cooperation in 2009, they had great expectations for the project. However, the group pointed out that the sales of hundreds of MNG by Mango stores in J.C.Penney J.C.Penney accounted for only 0.5% of the group's annual revenue.

By the end of 2015, the group decided to withdraw J.C.Penney Penny department store before the end of the five year's cooperation in February this year. Now the group will have only 7 independent stores in the United States, mainly distributed in big cities such as New York, Miami, San Francisco and Orlando, and the future group will expand in these key cities.

In fact, the department stores and counters have been excluded from the key development strategy by Mango MNG Holding SL. Since 2013, super stores have been the main expansion strategy of the group.

The group launched a new survey in mid 2014.

The line industry has revised the medium-term revenue target downward.

As part of the ten year development plan, Mango MNG Holding SL, which has been dominated by women's clothing, launched its children's clothing, underwear products line and big size clothing brand Violeta in 2013. In 2014, it introduced a series of clothing specially designed for teenagers and mature women. This year, it decided to reduce the price of the young product series and enhance its competitiveness.

In the past 2012-15 years, in the face of fierce competition from Zara, H&M and other fast fashion brands and cheap brands such as Primark, the group has cut prices for two times, and its operation is gradually speeding up towards fast fashion.

Mango MNG Holding SL former CEO Enric Casi has said that new brands need to grow longer than expected. "It will take several years to reach the unit area sales level of traditional product lines", and admitted that the past 2014-17 years' 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.

As part of the management restructure, Enric Casi no longer served as CEO of Mango MNG Holding SL in 2015. After leaving the group board in April 2016, it was completely divorced from the group that had served for 20 years.

Now Mango brand founder Isak Andic and Nahman Andic brothers are respectively chairman and CEO and executive vice president, Isak Andic son Jonathan Andic is executive vice president.