Spain’s LLICA D’AMUNT — Every garment that is shipped to Mango’s 2,100 stores, which are located in 110 different countries, first travels via the company’s new logistics facility in Llicà d’Amunt, a charming hamlet outside of Barcelona. The highly automated business, where over 400 processes are machine-driven, employs about 600 individuals six days a week to process goods for retail deliveries.
The facility, which is 186,000 square meters and has a storage capacity of up to 7 million hung garments and 20 million folded clothing and accessories, has received a total investment of €232 million from the corporation. Although it was finished in 2016, it just completely operationalized last summer. The center can process 75,000 garments an hour thanks to the incorporation of cutting-edge automation technologies, which triples the retailer’s previous capacity.
When hung clothing is delivered to Llicà d’Amunt, it is immediately emptied onto one of nine mechanized loading bays, which can handle 27,000 garments per hour. The clothing is divided by size and style in each bay using a classifier. After that, they move down a 24-kilometer train before being transported to stores or kept in the warehouse. One of the most automated hanging clothing installations in Europe, according to Mango, is found there.
The automated loading docks on the other side of the logistics center can load 1,000 boxes of folded clothing and accessories each hour. The boxes are moved through a weighing and labeling section, where they are weighed and given a tracking ID to enable real-time tracking.
We are a fashion company with access to data and a digital transition, and we want to make significant changes. We can accomplish this if we manage our operations, claims Toni Ruiz, general manager of Mango, who has promised to set aside an additional €35 million to add 295,000 square meters to the space over the next four years.
EFFICIENCY OF FAST MOVING FASHION STYLES :
By sourcing production near to their headquarters to save lead times, fast fashion retailers like Inditex have set the standard for agile supply chains. The current turnaround time for a new item to reach the store floor for its Zara brand is 10 to 15 days. When compared to Mango, the British online retailer Asos, which has numerous factories in continental Europe, requires four to six weeks.
Mango, like Zara, does not restock sold-out items but rather swaps them out for fresh ones. As a result, there are fewer markdowns and higher profit margins since customers know to buy an item when they see it because they might not have the chance to do so again. Every day, over 70 trucks and 35,000 boxes of clothing depart the logistics centre.
Ruiz anticipates that Mango will be better able to compete globally as a result of its emphasis on streamlining logistics and automating its warehouse technology. Greater online fashion consumption is being caused by the quick rise of online competitors, including established giants like Amazon and e-commerce veterans like Boohoo and Nasty Gal. Businesses like Mango have been forced to react.
Antonio Pascual, supply chain director for Mango, notes that the retailer has increased the average surface of its stores by almost 50%, from 500,000 square metres of floor space in 2012 to over 800,000 square metres today. “Mango’s store network has undergone a very quick and important transformation,” he says. The bigger, updated stores give customers a more seamless online-offline experience, including click-and-collect and simpler returns.
UPDATED LOGICSTICS :
Mango, whose operations were previously handled out of smaller warehouses dispersed across several sites, has opened its first worldwide distribution centre at the Llicà d’Amunt facility. Mango can continue to get its newest fashions onto the sales floor, satisfying consumers’ need for novelty, by coordinating production and utilising cutting-edge technologies like automation and tracking IDs. Mango’s clothing, made in one of its 1,200 factories, is prepared for shipment in less than four hours if necessary in the new centralised logistics centre.
Pascual affirms, “It ensures we can accomplish everything in the same place. Maintaining a high level of service is more important than packing more trucks and clothing.
Sales increased in 2018 following three years of flat growth: Revenues for Mango were €2.23 billion, an increase of 1.8% from the prior fiscal year. Despite recording a €35 million net loss for the year, it was profitable enough to break even in operating profit. EBITDA jumped 17% to €135 million, and gross profit rose 36% year over year.
According to Ruiz, this was fueled by the popularity of Mango’s new collections and its online sales, which increased 31% annually to €445 million. He opted not to predict sales numbers for 2019, but he did say that the upcoming holiday season would be “very crucial.”
Sales increased in 2018 after three years of declining revenues: An rise of 1.8% from the 2017 fiscal year, Mango recorded revenues of €2.23 billion. Despite a net loss of €35 million for the year, it achieved breakeven operating profit. EBITDA rose 17% to €135 million, a 36% year-over-year rise, while the gross profit increased by 36%.
The success of Mango’s new collections and online sales, which increased 31% year over year to €445 million, according to Ruiz, were the main factors in this. Although he declined to provide a sales prediction for 2019, he did say that the upcoming holiday season would be “very crucial.”
HAVING TO COMPETETE :
The effectiveness of Mango’s new logistics facility has helped to slow the decline, but Pascual says there is still much to be done. The business is developing new strategies to address problems like returns, which “push us to constantly alter our reverse logistics,” he says. To be closer to its consumers and provide the finest service, the business has also created a flexible network of eight satellite distribution centres, with one just recently launching in Mexico.
With Mango’s new approach, it will become more modern and lively. However, keeping up with Zara is difficult because the brand releases 500 new designs on average every week and refreshes its inventory twice a week.
According to Pascual, Mango doesn’t make it a top priority to take on Zara. He claims that mango gives a fantastic product at a reasonable price. Pascual emphasises that rather than emulating trends from the runway, the brand prefers to embrace relevant moods each season. This is a key point of differentiation from our rivals, a wager for our customers’ value, and the secret to our success over the past 35 years.