Isak Halfon, Mango

Isak Halfon is a Board Member and Executive VP of International Expansion at MANGO. MANGO is an internationally famous multinational company which designs, manufactures and markets women’s and men’s clothing and accessories. At present, MANGO has over 11,200 employees, 1,800 of whom work at the Hangar Design Centre and at its headquarters in Barcelona. Real Estate Publishers interviewed Isak Halfon to find out the secret of Mango’s success and where it is planning to expand in the future.

Can you tell us a few things about Mango and your role as an Expansion Director?

I am responsible of expansion for the franchise business worldwide. Our business is two-fold; we have corporate stores, which are 40% of our business, and franchise, which amounts to 60%. In the European community countries, which are under a solid currency, we usually have a corporate store.

If it’s a further away country, such as South America or Southern Asia, we prefer to have a franchise, with the exception of countries that have a big potential, like China or Russia, where we have both systems.

Which markets are interesting today for Mango?

We have already developed very aggressively in 107 countries, so there are many markets. Of course the most important ones for us are the European Union countries, where we have a very big business, in Spain, France Germany, UK, etc. We also want to have strong presence in the ex-Soviet countries, like Russia, Kazakhstan, Uzbekistan, even Kyrgyzstan, but we only have corporate stores in Russia and Poland. We are very focused on China; we have sent our own team there to deal with the franchise and corporate stores, so China does not depend on Spain anymore. In Southern Asia we are also doing pretty well, in countries as Singapore, Malaysia, Thailand, the Philippines, Indonesia. We have been there already for more than nine years, so the business is quite steady and growing.

How do you select your locations?

Our expansion team in Spain is the one that selects the locations. We are 30 people specialized in different markets, so we are the ones who approve the countries. First we go to capitals of course, such as Manila, Kuala Lumpur, Singapore City. We send a small team from Spain and we also have our supervisors based there, so we get the feedback of our own people who live there, who are always in contact with the stores. They visit the stores at least once per month to check the merchandise and make sure everything is OK.

What is the usual process when you enter a new market?

To give you an example, two years ago we went to Pakistan and we stayed there for four-five days. We visited a couple of cities, we went to a shopping center and we realized that the market is more virgin. In Pakistan we opened a store in a shopping mall in the capital and a stand-alone shop in the second city and we found out that the stand-alone is actually doing better than the shopping mall store. It all depends on the market, because when something is new, it’s like a test, once we open the shop we realize how good or how bad is the location. Usually we have no problems as our stores’ performance varies from very good to excellent.

In terms of new opportunities, are you still looking at Asian markets for franchisees?

The good thing about Mango is that the investment is shared between the company and the franchisee; in 90% of the countries we don’t sell them the merchandise. It’s on consignment basis, so all the merchandise belongs to us and the franchisee invests in the shop decoration. If it doesn’t work, he might have to wait a bit longer to get his money back, but also we are going to have a lot of leftover, so in a way we are sharing the risk.

We are focusing now in South America, where we are growing pretty fast in a number of countries. Another market that is booming for us is the Middle East; we are very happy and proud of our business there. Even in Iran we have already eight stores. So we have expanded worldwide, especially in the northern hemisphere, except for a few small markets that we haven’t decided on yet.

How many stores do you have at the moment?
We have 2,522 stores today and we are opening 350-400 stores per year. Until now we were opening a lot of corners and stand-alones, but we want to focus more on big stores from now on. Starting next year, we are going to create some new Mango brands, so we want to enlarge the size of the stores and make them more like megastores, thus developing a good presence in each country.

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