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Mango manages to reduce loss by 45 percent in 2017

By Prachi Singh

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Business

Mango Holding has said that the company closed fiscal year 2017 with sales of 2.194 billion euros (2.526 billion dollars) and an EBITDA of 115 million euros (132 million dollars), 50 percent more than the previous year. The company added that in the first half, the EBITDA recorded a significant improvement compared to the previous year, while the second half recorded more moderate growth, affected by the high temperatures in the majority of the company’s main markets. Due to this rise in the EBITDA, the group result increased by 45 percent, from a loss of 61 million euros (70 million dollars) to 33 million euros (38 million dollars.

Commenting on the company’s annual trading, Executive Vice-Chairman of Mango, Daniel López said in a statement: “In 2017, we have seen that our business model based on omnichannel selling and fast fashion is the right path to follow. With a sales performance in the second half similar to the first half of the year, the group has returned to profit. We expect to continue improving in 2018.”

Highlights of Mango’s annual results

Throughout 2017, Mango said that the company has conducted a major restructuring of its balance sheet, which has resulted in significant reductions to its bank liabilities and a reduction in its net financial debt. At December 31, 2017, net financial debt fell by 33 percent from 617 million euros (710 million dollars) to 415 million euros (477.8 million dollars), which has substantially improved the equity of the group.

The company further added that 77 percent of Mango turnover is contributed by the international markets and the remaining 23 percent is driven by the domestic market. By business lines, Man, Kids and Violeta were key performers, responsible for 18.3 percent of total turnover, exceeding the 17.6 percent figure of the previous financial year.

In 2017, the turnover of online channel rose by 15.4 percent to reach 339.2 million euros (390.5 million dollars), and it now represents 15.5 percent of total turnover. Given the excellent start of the first half of 2018, the company expects that online sales will reach 20 percent of total turnover during 2019, a target initially established for the close of 2020. Mango sells online in 83 countries and in 2018, it plans to extend this selling channel to Iran and Ukraine.

Mango creates Customer Department, hires Jordi Álex Moreno as information and communication technology director

As a part of its process of transformation aimed at converting the company into a customer centric, it created the Customer Department at the end of 2017, under Guillermo Corominas, former communication director of the company.

Mango’s investments in 2017 totalled 45 million euros and a substantial part of this figure was allocated to the improvement of the company’s technological systems, in order to accelerate its digital transformation. The company added that it will continue to work in the same direction during 2018, by investing an additional 30 million euros. To accelerate this digital transformation, the company has recruited Jordi Álex Moreno as the new Information and Communication Technology Director, who will be responsible for strengthening and managing this area. Moreno has joined the steering committee and the executive committee of Mango, which the company added, will allow him to contribute directly at the highest level.

The company closed the financial year with 211 megastores, 20 of which opened last year including flagships of SoHo in New York, Serrano in Madrid and Restauradores in Lisbon. At the close of 2017, the group had 2,190 stores in 110 countries and selling space grew by 1.8 percent. At the close of last year, franchises represented 55 percent of the chain's retail outlets. During the 2018 financial year, it is forecast that the group will continue to grow via this model and open 45,000 m2 of new franchise space worldwide.

Picture:Mango press room

Mango