Spain's Mango fashion house defies recession

Beating the odds in Spain's deep recession, the Mango fashion powerhouse in Catalonia says sales are booming worldwide, and even at home. Owned by media-shy billionaire Isak Andic, Mango typifies an export-led business savvy that is the pride of many Catalans, who will hold snap regional elections November 25 over a pro-independence push. Mango's budget-minded clothing is sold as far afield as Pakistan and Myanmar. But perhaps a greater achievement is its success back home in Spain, where a year-long recession is expected to extend into 2013, bad loan-ridden banks are being rescued and one in four workers is unemployed. "It doesn't affect us at all. In Spain we have sold 20 percent more this year than last," said Enric Casi, its general director, at the company's base near Barcelona in northeastern Spain. Mango has nevertheless had to react to the crisis, dropping its prices by a fifth this year, and absorbing the cost of a recent rise in sales tax so as not to scare off customers. Though prices have been lowered overall, there are no special discounts and profit margins will be maintained in 2012 at the same level as last year, Casi said. "Last year we sold 1.4 billion euros' worth of clothes and this year it will be about 1.7 billion or thereabouts." At Mango's base, known as the "Hangar", 600 sharply-dressed designers from various countries, most under 30, produce designs for the clothes later to be modelled by the likes of Kate Moss and Barcelona footballer Gerard Pique. Near the Hangar, two logistical centres work round the clock dispatching 5,000 samples a year to be stitched by subcontractors in China, Vietnam, Morocco, Turkey and India, and redistributing the clothes once they are made to stores worldwide. Like its rival Inditex -- owner of the Zara chain, based on the other side of Spain in Galicia -- the Catalan firm designs its clothes at home, but it differs in contracting out all production, while Inditex has its own factories. Spain's two richest men are the founder of sector-leader Inditex, Amancio Ortega, and Mango's Andic. Neither of the two men gives media interviews. "We have many differences," Casi said of the companies. "They are two models of success, each in its way." Mango in 2010 set itself a target of doubling its sales in four years and Casi says it is on track to do so, while aiming to launch lines for children and teenagers, swimsuits, underwear and sportswear. Troubled Spain remains its biggest market with 18 percent of sales, but is likely to be overtaken as others such as China grow strongly. In 2013 it is due to open new stores in French Guiana and the Caribbean island of Saint Martin. "We are just getting started," said Casi. "There is still a lot for us to do." Despite the success of firms such as Mango, Catalonia is Spain's most indebted region. Catalonia argues that Madrid levies far more in taxes in the region than it returns, and it resented being forced to seek 5.4 billion euros ($6.9 billion) in Spanish rescue funds to service its debt. That resentment is being fed by Spain's crushing economic crisis, which has forced Catalonia, like most of the country's 17 regions, to adopt harsh austerity measures.