Spanish retailer Mango is embarking on a bold expansion plan in the United States, hoping to shed its fast fashion image and position itself as a high-end brand.
Mango CEO Toni Ruiz told CNBC that the privately held Barcelona-based company plans to open 42 new stores in the United States by the end of this year and plans to open 20 more stores in 2025, mainly in the Sun Belt and Northeastern region.
The $70 million expansion, which includes a new logistics center outside Los Angeles and about 600 new jobs, will bring the company’s U.S. workforce to about 1,200 by next year.
“This is a long-term commitment,” Ruiz said. “We also have opportunities to open larger stores in the U.S.,” he noted, adding that Mango would open a number of multi-line stores focusing on men’s and children’s products.
Mango’s U.S. sales have grown more than 10% this year, and the company expects double-digit growth again next year.
Currently, Mango’s largest market is Spain, where it is based. While the United States is one of its top five markets, the company aims to increase sales in the region in order to break out of the top three. The target is part of Mango’s larger strategic plan, which focuses on increasing sales from about 3.1 billion euros per year to 4 billion euros by 2026.
Mango, known for its European fashion basics, is looking to reposition itself as a premium brand and show consumers it is not a fast-fashion brand. Ruiz said the design process took seven to eight months and everything was designed in-house in Barcelona.
“We have all the design, all the graphics, all the accessories in-house — that’s very important to us, so 100 percent is done here. We also have 500 employees who look after the product from start to finish,” Ruiz said. “We’re trying to improve. What does promotion mean? We think our customers really appreciate this creativity, this design, this own style. So that’s why we’re pushing hard, not only in terms of quality, design but also, Why not price it?
Ruiz said Mango’s U.S. growth plans are focused on stores because brick-and-mortar locations will allow the company to get closer to consumers and tell its story in new ways.
The company follows in the footsteps of a host of other international rivals, including Sweden’s H&M, Spain’s Zara and Japan’s Uniqlo, in turning to the U.S. market for growth. They are all vying to win over the average American family, which spends about $2,000 a year on clothes, according to one company. Lending tree research.
Mango has opened stores in Pennsylvania; Washington, D.C.; and Massachusetts, but fueled by e-commerce insights, it has set its sights on the Sunbelt for its next phase of growth.
Ruiz said Mango’s website, which now accounts for about 33% of total sales, helps retailers determine where customers are shopping from and what they are buying.
“This is a big challenge for us because we know that every state in the United States is like a country in Europe, so because of the customers, because of the way they dress,” Ruiz said. “It’s important to understand the differences between states…so that’s why we’re trying to move forward one step at a time.”
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