Zara’s has two small fast fashion retailers nipping at their heels in their home market – Mango and Desigual. Although these guys are still pretty small (Mango has one-fifth of Zara’s turnover at €1.9 million), it actually has a larger footprint than Zara in Spain (107 v. 88 stores). What’s more this brand plans on growing to €5 billion turn over in the next 3 years – pretty ambitious, non?
But what we think is interesting are Desigual’s plans.
This is a brand which feels like it has a real aesthetic difference to any of the other fast fashion players. It’s Chief Executive, Manel Jadraque says they are using this to target a slightly higher-end of the market than Zara or Mango. Maybe this is best exemplified in the fact that they debuted their menswear his season at Barcelona Fashion Week (below) – something a little strange for a fast fashion player…that’s not doing a designer collaboration. On top of that it’s distribution model isn’t limited to it’s own stores, it sells through wholesalers and departments store (giving it an extra 3,000 outlets).
So why are we harping on about Desigual?
It maybe smaller than Zara, H&M etc (€828m in sales with 109 stores around the world) but it’s a brand that seemingly know what it’s doing. It’s found a unique position in the over-crowded fashion market. Instead of copying the latest catwalk fashions (á la Zara, H&M and Mango) it has created it’s own design aesthetic and used this to command a premium. For example, the average Desigual t-shirt is priced is around €10 more than Zara. This has translated to a margin (EBITDA) 29% higher thanInditex (Zara’s parent company) and double that of Mango; and a business that has doubled turnover in the last 4 years.
Although this infant of the fast fashion set is not in Australia yet, it’s one to watch.