Mango bears the fruit of Zara's business model

Photo credit: the Random Noise

Photo credit: the Random Noise

Photo credit: the Styleless Diaries

Photo credit: the Styleless Diaries

Spanish-based retailer Mango recently out-competed Inditex, the parent company of Zara, in percent increase for home-country revenues.  Mango's domestic sales increased by 20 percent, while Inditex's fell by 5 percent.  The company is applying various aspects of Inditex's now-standard best practises, including:  

  • FOCUS ON CASUAL WEAR: Two years ago, 70 percent of Mango's revenue came from party-wear.  Now, the company has flipped its blend and is seeing strong results with it's assortment grounded in casual wear.  
  • LOWER RETAILS: Mango has cut is prices to nearly 20%, significantly narrowing the price gap between comparable products at other fast fashion retailers.  
  • BRAND DIVERSIFICATION: Mango has recently launched stand-alone brands for mens and accessories with further plans for teens and specialty sizing.  
  • GLOBAL EXPANSION: Mango intends to open 300 new stores this year, compared to Inditex's 450.   

The fast-fashion sphere continues to be highly competitive, and although Mango is far from achieving Zara's top-line or productivity results, they are certainly seeing promising signals with gains in Spain where unemployment is at over 25%. 

Courtesy of GUIDANCE & CONSULT

Courtesy of GUIDANCE & CONSULT