Mango closed 2023 with the best results in its history, which allows it to activate a new strategic plan that will lead it to invest 600 million euros in the next three years, a period in which it contemplates opening 500 new stores and reaching sales of 4,000 million euros. This "sweet moment," in the words of CEO Toni Ruiz, is based not only on the 15% sales growth recorded last year, but also on the fact that the family company chaired by Isak Andic has managed to double its profits and erase debt from its balance sheet.
"After closing a historic and exceptional year, we find ourselves with a totally healthy financial position that allows us to launch an ambitious and exciting strategic plan for the 2024-2026 period, in which we want to consolidate ourselves as a very relevant player in the global fashion sector," Ruiz expressed this Monday during the presentation of the annual results. In 2023, Mango exceeded 3,000 million euros for the first time, reaching a turnover of 3,104 million, a 15% increase, above market growth. At constant exchange rates, the increase was 20%. 77% of sales come from the international market, where growth has been particularly strong in countries such as France, Germany, Turkey, and the United States, a market that has already entered the group's Top 5.
The company increased its investment rate by 74%, with 187 million, 80 million more than in the previous year. During the year, the group opened 130 new stores and renovated another 80, reaffirming its strong commitment to the physical channel. "We are the fashion company that has opened the most stores in the world since 2018," Ruiz asserted. Currently, Mango has more than 2,700 establishments in 115 countries.
These 210 openings and renovations absorbed the bulk of the investment made in 2023, which was also allocated to technological improvement ---with a clear commitment to data management and artificial intelligence---, to strengthening the logistics capacity of the Lliçà d'Amunt center, and to the expansion of the corporate headquarters in Palau-solità i Plegamans, where a new building has been constructed and will be inaugurated in 2025.
Another of the milestones of 2023 is the fact of having invoiced for the first time more than one billion euros (1,037 million) through the online channel, which already reaches a weight of 33% of global turnover, one of the highest rates in the sector. The women's clothing division continues to be the company's flagship, generating 81% of sales (2,500 million, up 15%). Mango Man now has a weight of 11%, after having recorded an 18% growth, with 340 million. Finally, the Mango Kids and Mango Teens chains advanced 19%, with revenues of 246 million, 8% of the total.
The increase in sales, together with the improvement in margins derived from the strategic decision to raise the brand's positioning with higher quality products, has been the main lever for the strong increase in the company's profitability, which has doubled its earnings. Specifically, in 2023, net profit climbed to 172 million (112% more than the 81 million in 2022) and EBITDA improved by 22%, with a total of 533 million. According to Mango's CFO, Margarita Salvans, the group has one of the best profitabilities in the sector, with a gross margin on sales close to 60%.
Net debt reduced to zero
The executive, who has just joined the board of directors, stated that the increase in cash generation volume has allowed the company to close the year without net debt, which will allow it to comfortably face the challenges of the strategic plan. Mango's liabilities reached their peak in 2016, when more than 600 million were owed to banks. "We are very happy with the evolution of the debt, as there was a time when we had a lot," Ruiz highlighted, after pointing out that now the company "has a great lung" and a good capacity for cash generation to undertake the 600 million investments planned in the new plan."It is wonderful news not to have debt", the CEO elaborated, after pointing out that only three Ibex companies currently present a positive net cash situation.The 2024-2026 plan, which this year coincides with the 40th anniversary of the opening of the first Mango store on Paseo de Gracia in Barcelona, will require an investment of 600 million euros and aims to increase turnover by 1,000 million in three years, to exceed revenues of 4,000 million by the end of 2026. In parallel, during these three years, the net profit is also expected to double ---placing it above 300 million--- and reach one million square meters of commercial space thanks to the opening of 500 new stores and the renovation of another 150.
Mango estimates that by 2026 its workforce, now made up of 15,500 people ---80% women--- will grow by 30%. Another objective of the plan is to accelerate the development of the Man, Kids, Teen, and Mango Home lines, according to César de Vicente, global retail director. The executive points out that the countries that will concentrate these new openings will be Spain, France, Italy, Germany, United Kingdom, Poland, India, Canada, Mexico, and the United States, where they have stepped on the accelerator with the challenge of it becoming one of their three main markets. In the last year, the chain has gone from having 7 to 21 stores in the US and the goal is to open more than 30 in 2024.
The Catalan textile group has named the new plan 4E, in reference to four English words that they consider will be the main levers to achieve the objectives: Elevate, Expand, Earn and Empower. Elevate refers to Mango's desire to continue betting on a differential value proposition that elevates its market positioning, increasing the quality, durability, customer service, and sustainability and circularity of its garments. "We don't sell clothes, we design fashion," Ruiz likes to say.
The second pillar, Expand, translates into the plan to open 500 new stores in its strategic markets. For its part, Earn refers to the goal of doubling profitability and ensuring sustainable growth, prioritizing indicators such as like-for-like sales and sales per square meter. Finally, Empower are the set of measures that will be promoted to "empower and develop its teams, fostering a sense of belonging and having the best talent." "Companies are the people who form them," stressed the CEO.
Stock market listing is not on the table
In December, as a preliminary step to the concretization of the new strategic plan announced this Monday,Mango proceeded to remodel its board of directorsand announced the decision to reward the good performance of its CEO, Toni Ruiz, by ceding him 5% of the group's capital. This package of shares has been delivered to him through a capital increase against reserves. In addition, the company has reinforced its corporate governance with the signing offour independent directors: Marc Puig, Jordi Constans, Jordi Canals, and Jorge Lucaya. The board chaired by Andic, which has expanded from 4 to 9 members, has also incorporated the financial director, Margarita Salvans.These changes and the profile of the new board members have led to speculation that Mango ---like the Puig group--- is preparing for an IPO, an option that Ruiz has emphatically ruled out. "I have been denying for nine years that Mango is going public, and today I do it again. It is not a topic on the table. Mango has a spectacular growth opportunity ahead of it, and we have enough resources to do it," he asserted, adding that the group is not considering the entry of new shareholders either.