Mango, the Spanish clothing brand whose ads feature Penelope Cruz, says its jeans and T-shirts are a hit with veiled shoppers at a new store in Iran, where laws forbid women from wearing revealing clothes in public.
The nation’s first Mango opened a month ago in central Tehran, and three visits to the store since then found the aisles crowded. The shop may “quickly” become profitable, said Jose Gomez, the retailer’s head of business development.
“It’s like the promised land for retail,” Gomez said in an interview. He said Mango’s same-store Middle East sales growth has risen more than 10 percent for the past five years.
Mango joins Benetton SpA as one of few European clothiers in Iran, attracted by a youthful, growing population of 70 million. The Iranian market offers particular risks. Besides low oil prices, which may weigh on the economy, one of Benetton’s stores was damaged in a protest last year, and wearing a Mango mini-skirt in public is grounds for being arrested.
The privately held retailer adapted to the local market by making alternatives to chadors. Knee-length tunics with closed necklines sell for as little as $59, and can be worn in public.
That’s an unlikely look for photo shoots with Cruz, the Academy Award-winning actress who designs a Mango range with her sister Monica. Still, the Barcelona-based chain’s local offering appeals to shoppers like 18-year-old Assal Tavakoli, who became a Mango fan on a visit to Los Angeles.
Hip Clothes
“It has hip clothes and good cuts,” she said, while locally based retailers’ offerings “aren’t as tasty.” She said she can’t yet afford to shop at Mango frequently.
About nine other Mango stores are planned over five years in Iran, whose economy grew almost 7 percent in the year to March 2008. That adds to the company’s tally of more than 1,200 outlets in 97 countries. “We always carry the flag of retail into difficult areas,” Mango’s Gomez says.
Mango “minimized the risk” by franchising the store to Beirut-based Azadea Group to gain expertise with Muslim markets, spokeswoman Georgina Pratginestos said.
The Spanish retailer has 80 stores across the region, and almost all are franchises, Gomez said. The executive, who is in charge of the Middle East expansion, said Mango has operated in the region for more than a decade.
Mango gets about 140 million euros ($188 million) of revenue from the region, a tenth of its total. Azadea also runs Mango shops in Dubai and Lebanon.
Mango may have to ensure it doesn’t get too tasty for local politicians’ liking. Some members of Iran’s Parliament started a campaign against Benetton in 2007, two years after it entered the market, saying its clothes are a bad influence on women and urging the government to block the chain’s growth.
Benetton Critics
A year later, a Benetton store was damaged by unidentified assailants during a protest against the West’s alleged support for Israel’s military incursion into the Gaza Strip. Burning material was thrown at the shop’s window. The protesters were demonstrating against all Western brands, according to Benetton spokesman Federico Sartor.
The criticism hasn’t resulted in any problems from lawmakers so far, and Benetton is committed to staying, Sartor said. He said sales are growing at Benetton’s 18 stores, declining to give a percentage.
Like Benetton, Mango will “have to tone down advertising and may face political tension,” said Greg Hodge, an analyst at Planet Retail in London. “The attraction of Iran will be its huge population, rising affluence and growing retail market.”
Women in Iran are required to cover their hair and body curves with a headscarf and a long coat in public, though many dress in Western-style clothes at home or in private.
Store Staff
A visit to Tehran’s Mango showed female staff complying with the law, with heads fully covered. They wore knee-length Mango dresses on top of white long-sleeve shirts and blue jeans.
All Mango stores in the Middle East offer the full collection, and they also include special collections adapted for the region, Gomez said. Mango has 40 stores in Saudi Arabia, one of the most restrictive countries in terms of women’s dress, according to the executive.
“We don’t intervene in the political scene. We are there to observe the laws of the land and to do business and to bring women what’s available in the rest of the world,” Gomez said.
Images of Cruz or other celebrities are nowhere to be seen in the store, a departure from the European outlets. However, much of the clothing on offer wasn’t particularly conservative. T-shirts start at about $22 and jeans cost around $70, and the shop also offered summer dresses, high heels and tight tops.
Only for Parties
“Most of the clothes here are only suited for parties or gatherings at home,” said Homa Razaghi, 41, a painter wearing a black-and-white headscarf and a long black coat, who was walking out of the shop with her daughter. She had previously bought Mango clothes on trips across the Persian Gulf to Dubai.
“Prices are more expensive than Dubai and there’s less choice, but I’m glad this shop opened,” she said, since she suspected other Mango fashions she had seen in Tehran were fake.
Mango’s spokeswoman, Pratginestos, also said Mango plans to have a store in Erbil, the capital of Iraq’s Kurdish region, by next winter. The retailer entered the Middle East in 1997 with stores in Kuwait and Dubai. Its Lebanese franchisee, Azadea, which runs stores in Gulf nations such as Saudi Arabia and Qatar, said the Mango outlet is its first franchise in Iran.
To be sure, the decline in oil prices over the past year may put a dent in Mango’s growth prospects across the energy- rich Middle East. Gomez said the company has seen a slowdown in Dubai as oil and local real estate prices decline.
Still, the Iran shop could become profitable “very quickly,” Gomez said, and Mango is seeking another location in Tehran. “I wish the rest of the world would be like the Middle East,” he said.
Source: www.bloomberg.com
