In February, President Donald Trump announced he would implement a 25% additional tariff on all goods imported into the U.S. from Canada and Mexico, a 10% tariff on China, and a 10% levy just announced a few weeks ago.
Many companies are concerned about the negative financial repercussions the potential implementation of these tariffs could have on their businesses since some are highly dependent on imported goods from these select countries.
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To mitigate the damages, some companies have been strategizing and reorganizing their businesses in preparation for the Trump tariffs since before knowing he would win the presidential election to soften or prevent the potential blow they might have on their finances.
Mango announces it will not be raising its prices despite tariff increases
The Spanish fashion retail brand Mango announced it is not raising its prices despite the Trump administration’s recently imposed tariffs. However, there’s a catch to this claim.
Like all fast-fashion brands, Mango obtains most of its products from China due to its low production costs and lenient regulations, which allow it to keep up with trends and high consumer demands.
The U.S. is Mango’s fifth-largest market, and around 30% of all its products sold in the region are manufactured in China, making it challenging to comprehend how the retailer will maintain the same prices without denting its margins.
If this seems too good to be true, it’s because it is.
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Over the last few years, Mango has launched multiple higher-end collections, which has caused its prices to have an incredibly wide range that breaks out of the fast fashion standard, with its products retailing for as low as $10 and as high as $2,000 or more.
In response to the tariffs, Mango said it is considering increasing its higher-quality product offerings in the U.S. since more costly products generate greater profits.
Although the fashion brand is technically not raising the prices of its lower-end products, it would still be increasing the selection of pricier items in its U.S. stores, which lowers the selection of more affordable options.
Mango plans to expand its business in the U.S.
Mango opened its first store in the U.S. in 2006. Since then, it has opened over 60 stores and plans to expand even further in the upcoming years.
Last year, Mango unveiled a multi-year growth plan in which it will invest $70 million in developing new stores, including multiple in the U.S., as it plans for this region to become its third-largest market by 2026.
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Although the fashion brand doesn’t manufacture any of its products in the U.S. and currently has no intentions to do so, it does plan to expand its business by building a second logistics center in the U.S.
According to Mango’s financial results for 2024, revenues increased by nearly 8% compared to last year, with its international business accounting for 78% of it.
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