Spanish Mango opens stores around the world

Iraq might not seem an obvious destination for a European clothing store. The image of the country remains that of a dangerous place, where fanaticism easily trumps fashion, and it has been enough to persuade many an ambitious chain to look elsewhere for room to expand.

Not so Mango. Here, the Spanish clothes retailer reasoned, was a large, untapped market, one, moreover, that it understood. It already had a store in neighbouring Iran, where demand for its designs, known for being both trendy and affordable, was high. There was potential in Iraq.

It considered setting up in the capital, but “we concluded Baghdad has too many security problems”, Isak Halfon, the company's director of expansion, said. So it decided to open in Irbil in the Kurdish region to the north. When the store opens in September, it will join more than 3,000 Mango shops in 92 countries, two numbers that are destined to get bigger. “We are going to open up a number of new stores around the world this year, probably between 120 and 130,” Mr Halfon said.

The retailer has not been immune to the recession. Mango, which is not listed, does not disclose its profits and, although turnover increased from €1.33 billion (£1.16 billion) in 2007 to €1.44 billion (£1.25 billion) last year, Mr Halfon conceded that Mango's business had been hit in the UK and Spain, two of its biggest markets.

“Spain is our biggest market,” he said. “We do 22 per cent of our business there. The UK is about our fifth-biggest. These two marketshave been the worst hit. There is a recession on and clothes are not essential items.” In contrast, France and Germany had not been badly affected by the downturn in consumer confidence, he said.

Even with the downturn, Mango plans to open five new outlets in House of Fraser stores in Britain this year — in Sheffield, Guildford, Edinburgh, Belfast and London. Leading the sales pitch for the Barcelona-based multinational will be Scarlett Johansson, the actress, who has signed to be the face of the company for two years. She replaces Penelope Cruz, the Spanish actress, who, with her sister Monica, had also designed a range of clothes for the retailer.

Mr Halfon, along with Isak Andic, the chairman, and his brother Nahman Andic, the vice-chairman, are the three most powerful figures in the company. They are a close bunch: their families moved from Turkey to Spain in the Fifties and they grew up together. The retailer has resisted the temptation to become a listed company because, Mr Halfon said, it would mean that the company's bosses would “lose the freedom to do what they wanted”.

It also gives each country's operations a fair degree of autonomy. “Each country we open in is different. The local agents we work with know their market better than us. We don't want to make decisions just to please the shareholders,” Mr Halfon said.

When Mango opened its first store in Tehran in March, it was stocked with longer, less revealing skirts, designed to cater to Muslim tastes.

Yet it found that higher hemlines sold best. “What we found was that Iranian women really wanted our normal range of clothes, with shorter skirts or garments which did not cover them up like the Arabic ones,” Mr Halfon said.

Part of the reason it opened in Iran was with cheap imitators. Now it has hired lawyers to defend the brand and stop the pirates in Iran.