A business relationship that started out with so much hope has obviously not worked out as the Spanish fast fashion retailer, Mango, announced plans to close all of its 450 shops currently operating inside of J.C. Penney stores by next February.
Back in 2009, when the two retailers first announced plans for the MNG by Mango store-within-a-store concept at Penney, executives of both chains were bullish on its prospects.
Former Mango CEO Enric Casi said, "Every time we bring Mango to a new international market, it has driven immediate, strong demand, and we have only begun to capitalize on the great desire for Mango in the U.S. J.C. Penney is the perfect match for us to take advantage of the opportunity we see for the MNG by Mango brand in this market."
Myron (Mike) Ullman, III, Penney's former CEO, said, "Fast fashion for the young, modern woman is our highest-potential business opportunity."
Photo: JCPenney
When the MNG by Mango concept launched, the plan was for the in-store boutique to change its inventory every two weeks, roughly twice as fast as the rest of Penney's other fashion brands. The original goal was to have the concept operating within 600 Penney stores.
If there was rift between the two companies, it was well hid. As recently as February, Mr. Ullman spoke of MNG by Mango as one of the lines that "differentiate us from our peers."
With the planned closings, Mango will be left with seven standalone stores operating in the U.S., including locations in New York and Miami. The company plans to open an unspecified number of new stores in key cities, according to Reuters.
The closing of the 450 Penney locations is not expected to have a material impact on Mango's top line results. According to Reuters, the Penney business only accounted for 0.5 percent of the company's total global sales. With stores in 100 countries, Mango has invested heavily as it expands across the globe. That rapid expansion was given as the main cause for a 11 percent annual drop in profits last year.