Mango cuts revenue forecast on slow sales of new lines

Spanish fashion retailer Mango has cut its revenue forecasts for the next four years because it will take longer than previously thought to meet sales targets for its last launched new clothing lines. Zara's direct competitor Mango launched childrens' and lingerie ranges in 2013

and has introduced lines for teenagers and mature women this year, as part of a 10-year expansion strategy.

However, the new clothing lines have proved to be slower-than-expected when time came to hit objectives, prompti

ng the company to review at low its revenue forecast for the coming four years.

"In the past, we've been a little bit optimistic and now we've decided to apply more conservative criteria (to sales targets)," CEO Enric Casi told Reuters in an interview. "The new lines will take a couple of years to reach sales per square metre ratios similar to those of our traditional offerings," added Casi.

Mango's former forecasts “too optimistic”

Mango's CEO also admitted that the fashion group's previous revenues forecasts for 2014-2017 were too optimistic, particularly for 2017.

In a report issued earlier this month, the family-owned fashion retailer reduced its revenue forecast for 2017 by nearly a third to 3.27 billion euros, from the 4.97 billion forecast in the previous year's report.

"Business is going fine, but the new brands will take longer to get a following," CEO said when commenting this humbler forecast.

Mango saw slower sales growth in 2013 after branching out into new lines like sportswear and lingerie, as well as childrens' wear. Revenue increased to 1.85 billion euros in 2013, falling short of the company's 1.98 billion euro forecast.

The retailer has implemented an aggressive expansion plan, targeting four new stores a week. Key to this 10-year strategy is developing a portfolio of brands for men, children and older women.

On a separate note, Mango has reinstated its plans to continue growing in Germany. The fashion chain is currently running 126 stores in the country and plans to open 10 more until the end of the year.

 Angela González Rodríguez