The other economic effects of COVID-19: Mango reduces network by 19% and bets on proximity - Mango Spain reduces supplier network 19 percent covid effects - Mango ended the year of the pandemic working with a total of 892 factories worldwide, representing a reduction of 19.35% compared to the previous year. Thus, the Catalan group follows the trend marked in the sector to concentrate more its supply network, as stated by Modaes.

However, despite this commitment to proximity, China remains the main sourcing hub of the group, with 29.82% of the total factories (266 plants compared to
293 in 2019), followed by Turkey. When the pandemic broke out, it significantly affected the supply structure of the fashion industry. Many of them were forced to change the country of origin of their items overnight.

"We have greatly reduced the number of suppliers that we had, we explained where we want to go, we are starting to work in 3D... this or to do it with people with whom you establish partnerships important or it won't work,” explained Toni Ruiz, ceo of Mango, in a conference at the Esade business school.

Mango Spain reduces supplier network 19 percent covid effects

In this way, the fashion distribution group controlled by Isak Andic closed 2020 with a production of 126.55 million garments and accessories, which represents a reduction of more than 20% compared to the 158.33 million articles of the previous year.

The need to reduce purchases in the face of stock accumulation would be behind the decrease in the number of factories with which Mango worked in 2020. Of the total plants used by Mango, 305 were in proximity compared to 444 a year earlier,representing 34.19% of the total,

Mango Spain reduces supplier network 19 percent covid effects: Mango ended 2020 with a turnover of 1,842 million euros, which meant a fall of 22% compared to the previous year. A year earlier, the company had recorded the highest figure in its history, after growing by 6.3%, to 2,374 million euros.

The company decided a few weeks ago to launch an investment plan to renew about 800 stores in the next three years, which is equivalent to a good part of the group's own establishments. The opposite path followed by other large textile companies that have decided to undertake closures in a large part of their network of stores.

Mango Spain reduces supplier network 19 percent covid effects

However, this commitment to physical commerce will be combined with a growth in the online channel. In fact, while the company closed 2020 with a reduction in sales of 22%, to 1,842 million euros due to the impact of COVID-19, online sales rebounded by 36%, to assume 766 million euros in turnover. Faced with this new context, Ruiz believes that the weight of online will not fall by 40%.

Mango Spain reduces supplier network 19 percent covid effects

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The almost 23,000 startups created in Spain between 2015 and 2020 have lower closing and liquidity risk than current companies

Startups created in Spain between 2015 and 2020 have challenged the cliché of their conception as risky adventures, achieving in the study carried out by Informa.es lower percentages of risk due to closing or lack of liquidity than other companies analyzed.

The study on startup companies carried out by Informa D&B, which provides commercial information on 7 million commercial agents, has concluded that a total of 22,771 startups were created between 2015 and 2020.

The study has integrated into the group of startups "newly created independent companies that develop a technological or innovative activity", and emphasizes that these almost 23,000 startups represent 5% of the 420,144 companies created during the five years analyzed and that continue to have activity.

"Although the idea of startup is traditionally associated with risk project, we have observed that these companies have a higher survival rate than the control group," the report highlights.

When analyzing the dangers faced by start-ups, the report uses 3 assessment methods that establish the probability that a company will close in the next year, that a company will be late in its payments and the ability of entities to cope with exceptional situations.

Startups emerge from the data sieve in comparison with the rest of companies created between 2015 and 2020, obtaining a survival rate of 81% compared to 74% of the rest.

In this regard, it stands out that only 3.89% of startups have a high risk of closing in the next 12 months, compared to 6.07% of the rest of companies.

As for the possibility of startups being delayed in their payments, "only 16% have high or moderate risk," the report notes. The rest of companies, on the other hand, raise their hazard index to 28% of the rest.

The analysis carried out on startups indicates that about 95% of the almost 23,000 total are micro —enterprises, entities with less than 10 employees, while about 2.68% of them pass that barrier to be considered "small"—companies between 10 and 50 employees -.

Only 1.10% has managed to make the leap to become a medium-sized company with between 50 and 250 employees, something similar to the 0.87% that has managed to sit at the table of large companies.

Regardless of the size, the group of startups has seen how its social capital has grown considerably since its constitution.

The 230 million share capital held by all startups during their incorporation in 2015 has increased by 191% to the almost 700 million euros with which they closed 2020.

Nathalie Gianese, director of research, Informa D&B, to undertake the study on startups says that: “by Analyzing the published accounts by the companies created the last five years, the average turnover of that enter the definition of start-up is a 21% higher”.

To make this statement, the study looks at the 20.21% of startups created in the last 6 years that published their annual accounts in 2019, on whose data it states that"the profitability on sales of start-ups reaches 4.68%".

The rest of the companies analyzed by the report remain at 3.93% in the same comparison.

The total sales of the accounts of the startups that opened their accounting books was 5,220 million, a sales figure that the study relative to the number of companies to determine that startups have a turnover of 921,874 euros per company.

The distribution of startups around the Spanish territory is unequal, with 3 communities agglutinating more than 60% of the total.

Up to 27% of startups are based in Madrid, with Catalonia following the capital closely with 23%. Andalusia, meanwhile, has 12.27% of all national startups. The Valencian Community is left on the podium with 10.17% of the total thanks to its 2,316 startups.