From Toronto to Tbilisi, photos of Scarlett Johansson seem to be dotted around advertising hoardings. The reason the American actress, known for her roles in movies such as ‘Lost in Translation’ and ‘Vicky Cristina Barcelona’, is plastered over everything from buses to billboards is not for a campaign for her latest film role, but because she is promoting her new partnership with Mango.
Earlier this year Ms Johansson became the face of Barcelona-based retail chain Mango, taking over from fellow actress Penelope Cruz, who was the face of the brand for four seasons and who, along with her sister Monica, designed a limited edition collection for the fashion retailer. Mango says Ms Johansson was ideal for the brand because she embodies a chic, independent and cosmopolitan image. “[Ms] Johansson exudes a confident demeanour while remaining youthful and playful,” said a statement by Mango when it was announced she would be modelling for the brand.
That youthful and playful image is something Mango has been successfully marketing internationally since it began expanding outside of Spain in 1992. Mango was founded in 1984 and now has more than 1311 stores – 540 corporate and 771 franchises – in 93 countries.
“We have always dreamed about having a store in each country in the world so I think we want to match the United Nations,” jokes Isak Halfon, expansion director and associate partner at Mango. “But we are no longer just satisfied to have one store in a country, so our main goal now is to be opening several stores.”
That plan seems to be working well for the company; last year Mango/MNG Consolidated Group made a profit of €1.1bn, which was an increase of 7.8% on 2007. Given the company’s major global presence, 77% of the turnover in 2008 corresponded with foreign markets, while 23% were Spanish sales. In 2008 the company opened 130 stores across the globe and entered into new markets including Algeria and Georgia.
In spite of the ailing global economy, by the end of October, Mango – which now includes a menswear collection – had opened about 90 more stores across the globe this year, in new markets including Iran, Iraq, Guatemala and the South Pacific island of New Caledonia. The forecast investment for this year was €100m earmarked for store openings; the same amount is expected to be spent next year on further new openings in possible new markets such as Nigeria and Senegal. “I have seen crises many times over since I began working in this business,” says Mr Halfon. “But during a time of crisis you can get better deals with landlords and money is cheap if you want a loan so there can be opportunities.”
Mr Halfon says that countries such as China and Kazakhstan, where the company has been expanding its business, do not seem to have been as badly affected by what is happening in world markets. “Kazakhstan is a potentially huge market and the crisis has not made a difference in that market at all,” says Mr Halfon. “In China we have not seen any problems with the crisis so far, so though growth has dropped from 8% to 6% we don’t see that as a big deal.”
Mr Halfon believes that the Asian market could have even bigger potential than Europe and the US. Mango already has several branches across the region – including 12 stores in Singapore and 50 in China – with plans to expand into markets such as Cambodia.
Moving into the Chinese market in 2002 proved tough at first, mainly because the name Mango was already registered by another company so it was decided to trade under MNG, which, because it sounded like Ming, meant consumers assumed it was a local brand. After those initial hiccups it can now trade under the name Mango and the retail chain has been showing impressive growth. “The Chinese government does not want China to be the factory of the world anymore,” says Mr Halfon. “It wants to have middle-class consumers like in Europe and the US so it is quite keen for change.” That change means the opening of lots of shopping malls and Mr Halfon hopes that Mango will be a predominant fixture across the Chinese retail landscape.
Another region that Mango has been making serious inroads into is the Middle East and north Africa (MENA), where the chain has more than 100 stores. Since 1997 the company has been working in countries such as Syria, Tunisia and Egypt, and this year the retailer opened
up branches in both Iraq and Iran.
The store in Iraq will be housed in a Kuwaiti-funded shopping mall in the Kurdistan city of Erbil and it is the first franchise in the world where the location was approved without a representative of Mango checking out the location beforehand. “It was one of our franchise partners who had lots of experience in the region who recommended [the site] so we figured why not, let’s go ahead,” says Mr Halfon.
MENA is the only world region where Mango designs a specific collection for cultural reasons. About 40% of the collection – created by Lebanese designer Zuhair Murad – sold in MENA is specific to that region, which includes long-sleeved versions of short-sleeved shirts and skirts that have longer hemlines than those sold in other parts of the world.
Interestingly, when Mango opened its first shop in Iran earlier this year, it sent the Middle Eastern collection, assuming that because of strict dress rules in Iran, those clothes would be the most appropriate. “But shoppers refused the collection, saying they liked the Western collection better,” says Mr Halfon. “Even our local franchise was surprised because it expected to sell the longer dresses, but customers were saying, ‘No, we want the mini skirts’.”
Feeling the pinch
Though the Spanish retailer has now expanded into markets further afield, it is Europe that continues to be its main market, providing 60% of sales. In Spain, Mango has more than 300 stores and in countries such as Italy, the UK and Germany, where it has only one-third as many shops, the company expects there to be much room for expansion.
The Russian market – Mango’s fourth largest – is “booming”, says Mr Halfon, and though sales in eastern European markets such as Hungary and Poland have taken a small dip during the recession, overall they have continued to do well. Mr Halfon admits that Mango has not performed as positively in the US as it hoped. “It is a tough, very challenging market,” he says. “A lot of European brands fail maybe because of different sizes; it is such a big country and a lot of money and resources have to be spent on public relations.” He adds that Mango’s plans in the US are now to adopt a slower approach and see how things develop.
The retailer has fared better in central and South America, where it can be found in countries including Colombia, Cuba and Mexico. Ms Johansson had better have her passport ready – there is a lot more promoting to be done.
1311 stores in 93 countries located on five continents