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VIDEOUp-and-Coming Retailers: Mango
The Spanish fashion store has designs on the US market.
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Now comes a second Spanish retailer playing the same game, and nipping at Zara’s high-fashion heels.
The Barcelona-based retailer Mango is well-known around the globe -- it has 1220 stores in 91 countries -- but stateside, the store has some catching up to do. The first Mango store only opened in 2006. Since then, the company has opened 12 shops across the country. That's a far cry from Zara, which arrived in the US in 1989 and has opened 45 stores here.
So what’s a competitor to do? Pair up with an established all-American retail giant, that’s what.
Mango -- which sells under the name MNG by Mango in the States due to trademark issues -- has just completed a deal with J.C. Penney (JCP) to open distinct "shops" within 75 of the department store's locations. They’ll have dedicated floor space and design input, following the store-within-a-store concept. By the fall of 2010, Mango's products will be available through J.C. Penney’s website and by 2011 the plan is to expand to 600 stores.
It’s a good deal for both parties: Mango gets quick and thorough coverage of the US market and J.C. Penney gets to seriously up its fashion quotient with edgy, Euro-style Mango designs. According to a J.C. Penney press release, the deal was “planned to be the largest rollout ever of any fast fashion concept”.
J. C. Penney is already an old hand at this kind of agreement: cosmetics retail giant Sephora, owned by French luxury purveyor LVMH, set up shop in over 90 J.C. Penney stores after a similar deal was struck in 2006.
And J.C. Penney can do large: the company has 1,109 stores across the country. Like many retailers, it has felt the effects of the recession. It reported sales of $12 billion through the first three quarters of 2009, down 5.7% from $12.7 billion for the same period the year before. But with the arrival of Mango, its fashion power is on an upswing.
Executives at both Zara and Mango are skilled at creating demand for their products. As outlined in a Harvard Business School case study, one of Zara's retailing tricks is to create a sense of exclusivity -- and urgency. It only produces a limited number of clothes in any one size, making a shopper feel that if they like something, they'd better buy it right away. Zara does cool sophistication and Mango does edgy disco fashion, but both work on the same principal: get it while the style is hot, get it in the store fast, and keep the prime shopping target -- young women -- wanting more.
In Europe, Mango has found an especially loyal audience, as CEO Enric Casi once told Universia-Knowledge@Wharton, a business journal published by the Wharton Business School. “Our women don’t go shopping; they go to Mango," he said, adding, “Although we are a chain, we want each of our shops to be a fashion boutique where everything is coordinated.” The strategy involves striking a balance between two variables: price and exclusivity, so that “just because something is cheap, that doesn’t mean that it is something ordinary.”
According to Mango company documents, the chain’s 2008 sales totaled euro1.4 billion.
There’s also some serious star power boosting the Mango label. Actor Penélope Cruz and her sister Mónica have been designing and modeling their collection for the brand since 2007. Now ubiquitous American starlet Scarlett Johansson has stepped in as the brand's spokesmodel. As described by People magazine, "the sultry star, sheds her ’50s glam for a punky ’80s feel" in the ads, which were photographed by famed Italian photographer Mario Sorrenti.
Among J.C. Penney's more conservative customers, the images are sure to get some chins wagging.
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