Following death of founder: Challenges Mango now faces in leadership succession and future direction

Business

Mango store Nice (retail concept New Med) Credits: Mango

The sudden passing of Isak Andic, founder and non-executive chairman of Mango, presents the greatest and most profound challenge the Spanish fashion multinational has faced since Andic himself, along with his brother Nahman Andic, founded the company in 1984. This challenge arrives fraught with uncertainty, as it remains unclear not only who will succeed him as chairman of the company and its board of directors, but also who will guide the company through this new chapter following his departure.

2024 was expected to be, and indeed was proving to be, another successful year for Mango. After closing 2023 with record turnover, totalling 3.1 billion euros (+15.45 percent compared to the previous year's accounts) and net profit doubling to 172.1 million euros (+112.2 percent), the company kicked off its 40th anniversary celebrations propelled by what CEO Toni Ruiz described at the time as "the best results in the company's history". These record figures, reflecting the successes achieved in recent years, particularly following the pandemic, set the stage for the management's objective to further stimulate growth through the implementation of a new Strategic Plan for 2024 to 2026. This roadmap aimed to drive Mango's international expansion, revenue growth, and increased profitability and influence in the global fashion market, while also celebrating its first 40 years, laying the foundation for a new period of exponential growth, and for the medium term, for its business model. These ambitions were underpinned not only by the application of the plan's four guiding principles, "Elevate," "Expand," "Earn," and "Empower," but also by the increased professionalisation that Andic himself decided to implement within a new, expanded Mango board of directors.

From March 2024, this new corporate governance structure expanded from four to nine members, incorporating four independent directors. Simultaneously, Andic decided to divest 5 percent of the company's shares through a capital increase, placing this stake in the hands of Toni Ruiz. This decision was interpreted as both an endorsement and a gesture of gratitude for Ruiz's services, and a commitment to a near future with Ruiz continuing at the helm of the company's executive management.

With the combination of these decisions, taken at administrative and capital levels, Andic's intentions seemed clear, and he had expressed them in recent months: to firmly commit to a professionalised model for Mango in which the executive management, now in the hands of Ruiz, and in the future in those of another CEO, would not necessarily be tied to holding a majority of the multinational's share capital. Andic still retained the remaining 95 percent through the holding company Punta Na Holding. This percentage will now, following his death, be distributed among his heirs according to the stipulations of Andic's will, after his sudden passing on 14 December.

It is expected, barring any surprises, that the majority of his assets, including Mango shares, will be divided among the three children he had with his first wife, Neus Raig: Jonathan, Judith, and Sara. Of these, Jonathan is the only one who currently holds a position on the company's board of directors and is also in charge of the development of Mango Man, the menswear line. Therefore, it is presumed that Jonathan Andic will initially take over his father's role as the new non-executive chairman of Mango, following a necessary restructuring of the board. It is not ruled out that other members of the Andic family may eventually join, exercising more active, but non-executive, oversight of the company.

An uncertain succession

Based on these observations, everything appears, at least initially and pending the reading of the will, to be well-positioned for Mango to have a corporate governance structure similar to that of other large fashion multinationals, especially listed companies. This structure typically involves a majority of the share capital held by a main investment group and owner of a majority stake in the company, while its executive management remains professionalised and in the hands of a highly competent executive.

In Mango's current situation, these roles would be filled by the Andic family, presumably led by Jonathan Andic, and Toni Ruiz as CEO and minority shareholder, respectively. This seemingly dispels any doubts or uncertainties about the fashion multinational's future… were it not for two significant circumstances. Firstly, Andic, even in his role as non-executive chairman, continued to shape decisions and steer the company's direction, identifying new challenges that Ruiz subsequently worked to achieve. Secondly, Jonathan Andic, who was groomed to take over the executive management of Mango, just as his father had done, previously held the reins of the company, with rather disappointing results.

Toni Ruiz accepting this year’s ‘Business Leader of the Year’ award from the Spain – US Chamber of Commerce Credits: Mango

Delving into each of these two crucial issues, which represent the major uncertainties surrounding Mango's potential performance in the short and medium term following Isak Andic's tragic death, Ruiz himself acknowledged just a few weeks ago, upon receiving the ‘Business Leader of the Year’ award from the Spain-US Chamber of Commerce, that "Mango is the story of the vision of Isak Andic, our founder and non-executive chairman”. "The vision of creating a global brand that brought fashion to the world began with the opening of the first Mango store on Paseo de Gracia in Barcelona in 1984," Ruiz recounted. It was Andic's "entrepreneurial mindset, international vision, and open spirit" that "inspired his vision”. "These principles, deeply connected to our values, have been the guiding light throughout Mango's history and have helped us achieve record milestones," such as when "last year we surpassed 3.1 billion euros in sales for the first time in our history, entering a new era of growth”.

This momentum, like the award granted to Ruiz, was once again fuelled by the same entrepreneurial mindset and strategic vision that Isak Andic always displayed. It was this vision, coupled with the pursuit of one of the entrepreneur's long-held ambitions—to have a store on Fifth Avenue in New York—that led Mango to embark on what remains one of its major strategic commitments: expanding and consolidating its presence in the US. This demonstrates how, until now, Andic's vision and guidance have charted the course for Mango.

While it has not yet been confirmed, although all signs point to it, that Jonathan Andic will take over his father's position as the next non-executive chairman of Mango, following the model currently prevalent in multinationals like Inditex, the invaluable human, emotional, and business loss of Isak Andic is compounded by uncertainties about how the younger Andic's entry into the company's senior management might unfold.

After joining Mango in 2005, he was appointed deputy chairman alongside his father in 2012, and in 2014, he began serving as CEO with the ambition of ushering in a new chapter for the Spanish fashion multinational. For this new era, he felt the need to assemble his own trusted team, which led to the dismissal and departure of some of Isak Andic's key executives and confidants. Isak Andic, confident that the company's future was in good hands, embarked on a long-awaited "golden retirement"—he had attempted to retire in 2009, setting out to circumnavigate the globe on his sailboat, but had to hasten his return due to a rapid decline in profits—stepping away from day-to-day decision-making. In Jonathan Andic's first year as CEO in 2014, Mango closed with sales of 2.017 billion euros (+9.3 percent), but profits fell to 107 million euros (-11 percent). 2015 was much worse: despite sales growth to 2.327 billion euros (+15.3 percent), the company saw its net profits plummet to a mere four million euros (-96 percent). In 2016, the damage to the company's accounts worsened, with sales entering negative territory, falling to 2.260 billion euros (-2.87 percent), and profits not just falling but plunging into the red, with losses of 61 million euros.

Faced with this rapid deterioration in the company's operations, Andic decided to professionalise the company's management, returning Jonathan Andic to the management of Mango Man, a position he had previously held before being appointed to the executive management of the fashion group. During these turbulent times within the company, Toni Ruiz emerged and consolidated his position as a key figure within Mango's executive management. Ruiz joined the company in 2015 as CFO, coming from Leroy Merlin, initially to help control the company's already faltering accounts. In April 2016, the company restructured its board of directors, resulting in Jonathan Andic's official departure as CEO and Ruiz's appointment as the company's new strongman, not only as CFO but also as a new member of the board, filling the vacancy left by Enric Casi, Mango's executive director before Jonathan Andic's appointment, in March. From this position as director and CFO, Ruiz was promoted to general manager in 2018, before finally assuming his current responsibilities as CEO in March 2020. This position was reinforced by Isak Andic's decision to grant him 5 percent of Mango's share capital, and it is expected that he will be confirmed in this role following Isak Andic's death, should his heirs decide to continue with the strategy of professionalising the management bodies chosen by Mango's founder.

New challenges and objectives for 2026

Regardless of the decision made by his heirs, Isak Andic's departure marks a turning point for Mango. Whether opting for a dual management structure, with a non-executive chairmanship held by the Andic family and professionalised executive management, or for a single management structure, with a member of the Andic family holding both the chairmanship and executive management—it should be noted that Jonathan Andic today is not the same as the one who assumed executive management 10 years ago—the company must continue to address the current challenges and strategies it has in progress. For these goals, they will no longer have the strategic vision of the company's founder, nor will they have it when shaping Mango's next strategic plan, which the company will have to begin outlining in the coming years, based on its own evolution, for implementation from 2026 onwards.

By then, if all the goals and objectives set by the Spanish fashion multinational are achieved, Mango's turnover should increase from 3.1 billion euros to over four billion euros (+28.87 percent). This represents nearly one billion euros more in sales, an increase in turnover that they hope to achieve through both physical and digital sales channels, supported by greater diversification of their revenue streams, reducing dependence on womenswear, which accounted for 81 percent of the company's total turnover at the end of 2023, and increasing turnover from the Man line (11 percent of the total) and the Kids and Teen lines (8 percent of Mango's total turnover). To drive both this sales growth and greater diversification, the chain will rely on the four pillars of the strategic plan presented at the beginning of last March, particularly its "Expand" lever, which envisages the opening of more than 500 new stores, especially for new lines like Teen, between 2024 and 2026. By 2026, the company should have a retail network of over 3,000 stores, up from over 2,700 at the end of 2023.

Continuing on this point, Mango’s retail expansion strategies in the key strategic markets identified as "targets" for this expansion policy, aimed at "intensifying" its presence in countries such as Spain, France, Italy, Germany, the UK, Poland, India, Canada, and the US, have been and continue to be noteworthy. Among these countries, the UK stands out, where Mango committed to opening up to 20 new points of sale in 2024; Italy, where it will close 2024 with nearly 15 new stores, both owned and franchised, exceeding 100 points of sale by the end of the year; and the US, where, following the decision made by Isak Andic, Mango remains focused, with the aim of positioning it among the top three markets in terms of turnover by the end of 2026, having already established it among its top five largest markets.

To achieve this goal, the company will continue to expand its US retail network, marking a turning point with the inauguration of its flagship store on Fifth Avenue in New York in May 2022. This was a "dream come true" that Andic witnessed in his lifetime and launched Mango's offensive in the US market. Intermediate goals include opening up to 20 new stores in the country in 2025, reaching 65 physical stores by the end of next year, thus setting the course to position the US, in line with Andic's vision and wishes, among Mango's top three markets in terms of turnover by the end of 2026.

This article originally appeared on FashionUnited.DE. It was translated to English using an AI tool called Genesis and edited by Rachel Douglass..

Isak Andic

Mango