Spanish retailer Mango is embarking on a bold expansion plan in the U.S. as it looks to shed its fast-fashion image and position itself as a premium brand.
The privately held company, headquartered in Barcelona, plans to open 42 new storefronts in the U.S. by the end of the year and aims to launch 20 more in 2025, primarily in the Sun Belt and Northeast, Mango CEO Toni Ruiz told CNBC in an interview.
The $70 million expansion plan includes a new logistics center outside of Los Angeles and about 600 new jobs, bringing the company’s U.S. headcount to about 1,200 employees by next year.
“This is a long-term commitment,” Ruiz said. “We have also the opportunity to have bigger stores in the U.S.,” he noted, adding Mango will open some multiline stores that feature men’s and kids’ items.
Mango’s sales grew more than 10% in the U.S. this year and the company expects to see double-digit growth again next year.
Currently, Mango’s largest market is its home base in Spain. While the U.S. is among its top five markets, the company is aiming to grow sales in the region so it can breach the top three. The goal is part of a larger strategic plan at Mango focused on growing sales from about 3.1 billion euros annually to 4 billion euros by 2026.
Mango, known for its European chic basics, is looking to reposition itself as a premium brand and signal to consumers that it is not a fast-fashion label. Its design process takes between seven and eight months, and everything is designed in-house in Barcelona, Ruiz said.
“Internally we have all the design, all the patterns, all the fittings — this is very important for us so 100% is done here. We also have 500 people taking care of the product from end to end,” said Ruiz. “We are trying to elevate. What does it mean, elevate? We think that our customer appreciates a lot this creativity, this design, this own style. So this is why we are pushing a lot, not only in terms of quality, design and also, why not prices? Because our proposal is getting better.”
Ruiz said Mango’s U.S. growth plans are focused on stores because a physical presence will allow the company to get closer to its consumer and tell its story in a new way.
The company follows a string of other international competitors such as Sweden’s H&M, Spain’s Zara and Japan’s Uniqlo that have turned to the U.S. market for growth. They are all competing to win over the average American household, which spends on average about $2,000 annually on clothes, according to a Lending Tree study.
Mango has opened stores in Pennsylvania; Washington, D.C.; and Massachusetts, but has turned its sights to the Sun Belt for its next phase of growth, driven by insights from e-commerce.
Mango’s website now represents about 33% of overall sales and helps the retailer determine where its customers are shopping from and what they are buying, said Ruiz.
“It’s a big challenge for us, because we have understood that every state in the U.S. is like a country in Europe, so because of the customer, because of the way of dressing,” said Ruiz. “It’s very important to understand the difference between the states. … So this is why we try to go step by step.”