Mango Increases Its Presence in Russia
Fort Grup one of the biggest promoters of Russia signed a franchise agreement with Mango, the well-known Spanish fashion brand, a deal that was closed at the end of October last year.
Negotiations began in May 2015 and just a year later the company plans to open the first of five new stores for the years 2016 and 2017. «We have reached this decision, wanting to take our shopping centers major operators of prestigious brands and Mango brand is the most consistent with our potential consumer,» – said Maxim Levchenko, one of the main shareholders of Fort Group.
However, the company will open stores Mango not only shopping centers but also in other unrelated but, under franchise. The first will start on May 12 in Moscow in the «Zelenopark» In the autumn mall will open two stores in St. Petersburg, in the centers «South Pole» and «Port Nakhodka», both belonging to Fort Group.
In St. Petersburg, there are 12 stores, three of them in shopping centers belonging to Fort Group (centers «Europolis», «City Mall» and «London»). In Russia Mango has more than 110 stores, of which more 50% franchisees develop them. The Spanish company offers franchises in cities with population over 100 thousand inhabitants.
The Russian crisis slows growth of Mango
Both companies are interested in benefit from this agreement, under which the manufacturer of Spanish fashion could save on costs of renting premises, which in some cases account for 20% of turnover, while the promoters of Fort Group can benefit from the investment in a prestige brand like Mango. The Spanish company has been affected by the Russian crisis, in the sense that many brands have resorted to dumping, pulling prices to create volume, making Mango in an expensive competitor, in a context of falling real incomes for Russians and collapse of the ruble. The outlook for 2016 for both the Russian economy in general, and its currency is better for 2016, especially if continues rising oil prices.
Very improvable financial results.
Mango Russia turnover was around 6.6 billion rubles in 2014, with losses – 37.7 million rubles. (Five hundred thousand EUR) Throughout the fashion market was particularly affected by the crisis. While sales grew in rubles, rising sales in physical units of 1.7%, but with a fall in real terms of market 21%
However Mango figures globally were different. The consolidated group Mango MNG Holding, which has more than 2,700 stores in 109 countries, ended fiscal year 2014 with total sales of 2017 million euros, 9.3% more than in 2013 year, and a profit of 107 million euros, obtaining an EBITDA of 223 million euros. Not have even anticipated the results of 2015, but is expected a fall of benefit to figures below 100 million euros, which implies a cut in the dividend of the company as well as a delay in the possible withdrawal of their founder Isak Andic.
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