Mango activates an investment plan to renovate nearly 800 stores in three years

Mango raises its commitment to the physical store at a time when the retail trade, and more especially the textile, has turned to the online channel to support its sales in times of pandemic. Among closure plans of some of its competitors, the Catalan company has decided to launch an investment plan to renew about 800 stores, which is equivalent to a good part of the own establishments that make up its network.

The initial step will be taken this year. Mango will allocate 10 million euros to renovate 42 points of sale, 18 of them in Spain, adapting them to its new store concept model, which opens today in Spain at its flagship on Paseo de Gracia in Barcelona, ​​with 1,500 m2 of surface. “The objective is to test and see what works or not. It is more flexible, the changing rooms are wider, more comfortable, with regulation of the intensity of the light; it has click and collect areas, more warehouse and is more sustainable, with 30% lower consumption ”, describes Toni Ruiz, Mango’s CEO, in an interview with Five days, which details: “The interior design breathes a lot of Mediterranean, with more natural light. For customers, it is a store that places a high value on the product ”. In addition, it incorporates RFID technology or heat maps to capture traffic flows in the store and further personalize the offer.

This new store model, which has been fully developed by Mango teams, has been launched in Dusseldorf (Germany), London (United Kingdom) and from today in Barcelona.
Mango’s plan is for the renewal of the network to revolve around this design, both in larger and smaller stores, which for reasons of space would do without, for example, click & collect. But this is the idea with which the textile he founded Isak Andic see your physical sell bet now. “First we test the model to understand how to extrapolate it to the rest of the formats. For us, the store continues to be an essential pillar to connect with customers and to express our commercial proposal ”, says Toni Ruiz.

The reform of the flagship of Paseo de Gracia has required a investment of 1.8 million. Ruiz prefers to keep the figure of what the proposed renovation will mean for the next three years, which will include both comprehensive reforms and more cosmetic actions. “We have a significant investment that can be made with our own resources in that period.”

Growth margin

Mango does not give up continue to expand its network of stores, that will already open with their new concept. Nor in Spain, where Inditex or H&M are following contrary processes. “Without a doubt, the idea in Spain is to grow in stores, and there are opportunities in many places. We review town by town, there is a lot of travel, for example, around Barcelona. Spain is our main market and we have a 2% market share. There is space, ”says Ruiz. In that sense, he explains that the company’s staff can be “absolutely calm.”

On the other hand, Mango will combine its commitment to physical commerce with growth in the online channel. Last year the percentage of income generated by this channel reached 42%, in exceptional circumstances such as the pandemic, and for this year it has the challenge of reaching 1,000 million.

Looking ahead, Ruiz believes that the weight of online will not drop below 40%. “We also have many opportunities here. In the end it is a mix between many markets. In the US we have 3 or 4 physical stores so the online one weighs more. In mature markets such as Spain, Portugal, France, we would be more than 30%. There are opportunities on both channels.

“In some stores in Spain we have seen 2019 sales in recent days”

Mango’s CEO, Toni Ruiz, celebrates that 100% of its global store network has been open for just a few days, something that had not happened in months. “In some countries we see a return to the stores with a beastly desire. It happened for example in France. There when they opened the terraces people were even raining ”, explains the executive.

During fiscal year 2020, Mango stores were closed for an average of 70 days. And when October and early November were passing, Ruiz acknowledges that they did not think that the start of 2021 would be as bad as it has been. But although the effect of the restrictions on stores has continued until a few days ago, online has continued to respond, says the CEO of the textile.

“Now we see confidence. We are reopening and stores are reclaiming stores. We have always said that the year in which we will recover the sales of 2019 will be 2022, and we maintain it, but I believe that if there are no new restrictions in 2021 we will be closer than we thought ”, predicts Toni Ruiz.
Also in Spain, where it says that “we have seen billings for the year 2019 in some stores. With the information we have today, we are quite optimistic ”.

What does continue to curb the pandemic are the growth plans for the store park. Ruiz estimates that Mango will grow this year around 40, when in the exercises prior to the pandemic they did between 100 and 120 per year. “The important thing is that we are going to close few stores and the desire is to grow steadily. In the last four or five months we have had key countries closed. And now we see a recovery in sales as they open ”.

Currently, about 6% of Mango stores are more than 800 square meters. Ruiz confirms that future openings will not vary that proportion too much. “We have opportunities to grow, for example, in shopping centers, where the size is smaller. That is why I calculate that the percentage will be between 6% and 10% in the future ”.

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