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Mango’s Risky Business: Spanish Chain Sees Iraq As Fertile Retail Ground

Mango plans to bridge a cultural and psychological divide and open a store in Abril, a city of one million people in Iraq's northern Kurdistan region.

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Iraq isn’t the first place that comes to mind for retail expansion, but at least one fashion company is venturing where none has gone.

Mango plans to bridge a cultural and psychological divide and open a store in Abril, a city of one million people in Iraq’s northern Kurdistan region.

“We’re going to open a shop in Iraq very soon,” said Isak Halfon, Mango’s president of expansion. “The people are starving for something like this.”

But don’t expect the usual array of flirty dresses, tight jeans and sexy bikinis found in most Mango stores.

In an acknowledgement of the cultural realities, the clothing will be designed by Zuhair Murad, a Lebanese designer who has collaborated with the retailer since 2006. About 30 percent of the Mango merchandise sold in the Middle East is designed specifically for the region and Murad’s collections are available only in Arab countries.

The Barcelona-based fast-fashion chain has a thriving business in the Middle East. The region accounted for 13 percent of 2007 revenues of 1.33 billion euros, or $2.08 billion at current exchange.

The retailer, which operates 1,144 stores in 90 countries, entered the Middle East in 1997, opening units in Kuwait and Dubai. It now has 84 stores in the region, in Saudi Arabia, Kuwait, Dubai, Bahrain, Jordan, Lebanon, Oman, Qatar and Israel. The company plans to open 22 stores there this year. “We’re number one in these countries,” Halfon said. “Sales are booming.”

Abril has experienced sporadic violence since the overthrow of Saddam Hussein. In May 2007, a suicide truck bomb killed 14 people and wounded 87. But in the last year, the city has seen some development. A new airport terminal is under construction and hotels are being built.

Nonetheless, Mango executives did not travel to Iraq because of safety concerns. “We didn’t go there to see the location, but we have a good partner there,” Halfon said. “This is the only store we accepted without seeing it.”

Mango’s vulnerability to Middle East violence isn’t limited to Iraq. The company in July 2006 temporarily closed five stores, four in Beirut and one in Tripoli, Lebanon, after Israel bombed Lebanon during its war with Hezbollah.

Asked why Mango was opening a store in Iraq, Halfon said, “We like to have a challenge.”

And a challenge it will be. Traditional Islamic attire for women covers most of their bodies and often consists of a jilbab, or overgarment; hijab, or headscarf, and aniqab, or face veil.

“The Koran says that both men and women must dress modestly,” said Katherine Lang, associate professor and chairman of the history department at the University of Wisconsin Eau Claire. “That’s been interpreted in a lot of different ways in a lot of different places. Women have to cover themselves in Iran and Saudi Arabia, but not in Iraq. The biggest issue would be the economics of this. The challenge is who can afford the clothes right now. Still, there are going to be women interested in high fashion.”

Lang said some Mango garments may be worn underneath a jilbab, hidden until the wearer arrives at a private function.

“In Iraq, we have a much more conservative society,” said Rend Al-Rahim, director of the Iraq Foundation, a nonprofit focused on women’s issues and human rights. “Amman and Cairo [where Mango operates stores] are much more open environments and more modern societies. A lot of designs that may sell well in Lebanon couldn’t be sold in Iraq, things that are sleeveless, that show the midriff, short skirts, tight pants and tops that show a lot of bosom. Some women may buy them to wear at women’s-only parties, but they don’t have many parties right now because of security concerns.”

Mango will still have to be careful “not to show anything provocative in their windows,” he said. “Abril is not Lebanon or London or Madrid.”

In addition to his collection for the Middle East, Murad designs a signature collection that’s as sexy and glitzy as anything a Hollywood starlet might wear. His couture spring-summer 2008 line, themed Diamonds Are Forever, features models with blonde Marilyn Monroe curls and silver halter gowns slit high up the thigh. Nor is prêt-à-porter any more demure. A long black gown has sheer inserts on the bodice and a pink and turquoise gown exposes the midriff.

But Zuhair Murad Limited Edition for Mango is in line with Middle Eastern norms. Long silhouettes — tunics worn with ruffle-hemmed skirts and billowy dresses — come in floaty fabrics and silks. The issue of coverage is dealt with through layers. Soft pastel colors such as teal, beige, cream, lavender and peach abound.

“They like to have long-sleeve blouses,” Halfon said of consumers in the region. “Being Lebanese, [Murad] does long dresses and is very good on this kind of issue.”

Mango is active on fronts around the world.

The retailer is launching a men’s wear concept called Mango He after testing the concept in its stores.

“The test was quite positive,” Halfon said. “We opened the first Mango He in Ankara [Turkey].”

The men’s collection will also launch in some existing Mango units. Halfon said it takes up 5 to 8 percent of a store’s space and will be introduced into larger stores.

Mango is building its retail presence. There’s an emphasis on Russia and Eastern Europe. The company opened its third Romanian store in Bucharest in April. Three additional stores will open in Cluj-Napoca and Constanta, former capitals of the Transylvania and Dobruja regions in Romania, respectively.

In Russia, where Mango operates 48 stores, business is robust, Halfon said. Mango this year opened 13 stores there. Russia represents 4 or 5 percent of Mango’s total sales volume, Halfon said, adding that the retailer will continue to open 10 to 20 stores a year in the area. “People there love to spend money,” he said. “They’re coming out of 70 years of oppression. They love to consume and wear sexy garments.”

Halfon characterized China, which Mango entered in 2002, as “a good market, but not as good as the Russian market.” The company has 45 units in China and will open 28 stores by the beginning of next year.

In emerging markets, Mango will add five stores to the nine it already has in India. Several challenges exist in India: Sixty percent of the population wear traditional saris and the Indian standard of living is below that of China. “India is a difficult market so far,” Halfon said. “It’s not easy to import to India.”

Mango has touched down on the African continent, as well, opening stores in Johannesburg and Cape Town. Halfon views Senegal and the Ivory Coast as emerging markets that “will be good in a couple of years.”

The U.S. is one market that still seems to be in development in terms of store count. Mango has unveiled only 20 units, while competitor Hennes & Mauritz has launched more than 100. Mango will open five to six stores a year in the U.S., Halfon said.

“I’d love to open 10 to 15 stores a year,” he said. “The difficult thing in the U.S. is the location. We want to make a cluster of stores in the New York area. We’re trying to make some deals and [have] critical mass like we have in Los Angeles….We’d like to have more stores in New York City.”

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